Customers willing to drop brands on perceived environmental impact
by Ben Poole
A global survey commissioned by ING shows consumer attitudes have reached a tipping point, leading them to avoid brands that don’t prioritise sustainability and environmental issues. Despite demanding change, customers will still engage in the linear ‘convenience economy’ model of ‘take, make and waste’ unless companies offer a more seamless transition towards the ‘circular economy’.
Faced with potential damage to profitability, businesses must offer more convenient sustainable options to consumers in order to create meaningful engagement with the circular principles of ‘reduce, reuse and recycle’.
According to the report, titled ‘Learning from consumers: How shifting demands are shaping companies’ circular economy transition’, the majority of respondents believe their behaviour and choices can have a positive impact on addressing global environmental challenges (83%). Furthermore, 61% say they would be less willing to buy a company’s product if they discovered it was performing poorly on environmental practices.
The findings, which provide a detailed analysis of consumer interactions with fashion, food and electronics brands, highlight where consumers are already engaging in circular activities and their appetite for new product and service models. The report notes the potentially vast gains for businesses that embrace the ‘reduce, reuse, recycle’ principles of the circular economy by aligning with consumers’ changing demands.
To better capture the opportunity of the circular economy and engage with these customers, companies must first understand the barriers to widespread consumer adoption. The barriers include:
- Awareness and education: In the electronics industry, only 21% think companies provide detailed information on the overall environmental impact of products; 41% don’t know where to access repair services; 71% aren’t aware of device-sharing platforms; and 39% can’t distinguish between recyclable and non-recyclable plastics.
- Empowerment and reassurance: The top reason for not repairing clothes is consumers’ belief that, to do so, they need skills they don’t have, with 48% having this sentiment. Meanwhile, concern about data security (42%) is the second-most cited concern around leasing electronic devices.
- Circular infrastructure and convenience: Engagement with more novel circular practices is being held back by the perceived effort required: 41% think renting clothes would require a lot more effort, and 36% say time is a barrier to repairing devices.
- Cost: Price is still a decisive factor for many consumers when buying clothes, food or electronic devices. More than half (54%) of consumers still choose low-cost, fast-fashion items over more expensive, more durable ones.
For companies to address these barriers for all of their customers, they need a deeper understanding of consumer motivation. ING’s analysis identifies three broad groups: ‘Circular Champions’, ‘Circular Sympathisers’, and ‘Non-engagers’. The report identifies within each industry sector the different buying decisions, behaviours, and motivations of each group in embracing - or not - circular economy practices. Through understanding the differences in motivations from each consumer segment, brands can gain insight into how to transition to circular business models while also engaging those whose buying decisions are not based on environmental factors.
In a related report issued last year, ‘Opportunity and Disruption: How Circular Thinking Could Change U.S. Business Models’, nearly four in five US firms had a strategic intent to implement a circular economy framework (62%) or had already put one in place (16%). ING’s two circular economy reports recognise businesses’ and consumers’ progress in transitioning and engaging with the circular economic model.
● Longitude, a division of the Financial Times Group, surveyed 15,001 consumers in 11 countries across Europe, APAC and North America during Q3 and Q4 of 2019.
● A nationally representative sample based upon age, gender and income was targeted within each market.
● Consumers were asked about their attitudes and current interactions with fashion, food and electronics brands, as well as their appetite for emerging product and service models.
Like this item? Get our Weekly Update newsletter. Subscribe today