Consumers Won’t Trade Functionality for Sustainability

Consumers will pay a 10% premium for sustainability, and demand a greater discount for “unsustainability,” but they won’t trade off functionality.

Most of what we know about sustainable consumerism is based on surveys, which are good indicators of attitudes but lousy predictors of behaviours. It appears that on average, consumers will pay a 10 per cent premium for sustainability, and demand a greater discount for “unsustainability.” However, they will not trade off functionality. Managers can design the marketing context and messaging carefully to promote sustainable consumerism. Researchers should cease conducting surveys on consumer attitudes and intentions.

Background

We think we know a lot about socially conscious consumerism. Countless anecdotes and surveys suggest some consumers will purchase sustainable products and services and at great premiums. But anecdotes do not apply widely, and surveys are poor predictors of actual consumer behaviour.

Findings

• There has been very little reliable research that examines the premium for socially conscious production. The findings indicate a wide range, with a typical average premium being about 10 per cent. Some evidence suggests that consumers will demand a discount for “unsustainability” and that it is greater than the premium for sustainability.

• It does not appear consumers will trade off functionality.

• The environment appears to be an important driver of socially conscious consumerism. But really, there is no coherent view of who a socially conscious consumer is.

• Marketers may be able to influence purchase decisions more by prompting consumers, making purchase decisions visible, and making consumers feel that their decisions will make a difference.

Implications for Managers

• Do not chase the conscious consumer, as if there is only one kind. Figure out which elements are important to your various consumers.

• Communicate how one consumer’s purchase actually contributes to the broader social goal.

• Do not compromise service or product quality or functionality.

• Make marketing messages simple, and make the added benefits clear while noting that there is no trade-off. The full report provides a framework for how managers can close the gap between consumer intentions and behaviours.

Implications for Researchers

Researchers must cease conducting surveys on consumer attitudes and intentions, which tell us little about how they will behave. Newer methods—including forced-choice experiments, experiments where consumers believe they will be paying their own money, and field experiments using scanner or other sales data—would be better, moving away from relying on self-reported behaviours.

Methods

The authors systematically reviewed and synthesized more than 90 academic and practitioner papers. The full methodology is described in the full report.