Commentary
Recession's Impact On Eco-Friendly Marketing
- by Maryanne Conlin , June 3, 2009
It's easy, however, to fall into the trap of believing that positioning a product as sustainable and green is some sort of silver bullet that will drive product sales to unimaginable heights. That has never been true and is less true as we experience the worst recession in our lifetimes.
While there is a sizable segment of the population (16%) that will purchase products in the interest of saving the planet, (LOHAS defines these as very progressive on environment and society, looking for ways to do more [and] not too concerned about price) this is only one segment of the green consumer market. It's one that has seemingly expanded in the past few years as consumers across the spectrum felt wealthier, but in tough times, this segment necessarily shrinks.
Marketers should, however, pay attention to two other psychographic segments, Naturalites and Conventionals, that are leading the second wave of green consumption.
The word "green" has, in common usage, come to cover not only that which is good for the planet, but also that which is good for the body. For example, the green movement has been instrumental in campaigning for removal of toxic chemicals in the food supply, which benefits both planet and people.
As our population ages and consumers (especially new mothers) become more aware of the concerns with conventional farming methods, more are driven to look beyond low-fat and heart-healthy products for those grown naturally or organically. This means the Naturalites segment, or those who buy green for health and wellness purposes, is booming. This segment is less likely to give up their favorite organic product due to budgetary concerns -- placing health as a priority -- and will skimp in other areas.
A second key group of green consumers that, in the past, cast into the shadowy back waters of green marketing, is the Conventionals, those practical consumers who shop on price. More and more of us are falling into that category these days!
Conventionals are becoming aware, sometimes to their surprise, that the green choice is often the cheapest. Appliance manufacturers and various energy-related industries have been focusing on this segment for years, but new opportunities have opened up for consumer package goods, especially those seen as commodities. As consumers try their hand at cooking from scratch, making their own cleaning supplies, crafting and retro entertainment, a key repositioning opportunities open up.
So, as aspirational consumers desert high-profile stores like Whole Foods, preferring saving money to being seen, a whole new group of consumers is ripe to take their place.
I'm not so sure that the Conventionals are going to take the place of aspirational customers. We have another force operating in the marketplace...an increase in the green/sustainable/organic offerings by traditional marketers like Kroger and Publix whose average ticket tends to be lower than the Whole Foods type of store. If consumers can get their "green" and non-green goods at the same place, for a perceived better value, the Whole Foods segment (let's call them Urban-Sustainable-Green-Chic) might just shrink relatively permanently to that segment that selects supermarkets at least partly based on self-image.
We'll see. This recession is a whole new ballgame.
Good article, BTW
Wait until the Home self-sufficiency market really breaks!
Nanotech-based photovoltaic spray-on and film coatings, recycled water systems, water capture and treatment, economical wind power for home (Look at pictures of the 1880's-every, I mean every home had a windmill pump to draw water).
Forward-looking developers, builders and contractors have packages ready to go, or in the last stages on the drawing board.
In some people's minds the cost doesn't matter so much; the independence, the self-sufficiency does!
Barry good point- the self sufficiency movement is just emerging in a meaningful way
David,
And that'd be a whole 'nother story... The channel issue is one that has troubled green and organic manufacturers over the past decade as they felt shut out of the traditional grocery channel, Now you see them making inroads with both branded and private label products. To date thought, those offerings are small.
On While Foods though, a bigger worry might be lower cost organic/green supermarkets like Sprouts. I beleive WF's days of skimming the cream are probably over and they and their vendors need to adjust to a new reality. They have some smart people over there though...I'm sure they're already thinking along those lines.
Compliments on this very insightful piece, Maryanne. As our company increasingly publicizes green products and activities marketed to moms, it's helpful to gain a better understanding of the mindset of different categories of consumers.
Thanks Stephanie! As you already know the Mom consumer is a key segment for "healthy green" marketing. Driven by concerns for the health of their children they are some of the first to purchase organic and natural products.
Update: I neglected to mention in my post that the numbers I included on LOHAS segments are from Natural Marketing Institute’s LOHAS Consumer Trends Database®.
Also, the LOHAS updated numbers for the LOHAS segment for 2008 is 17% of the U.S. population (from the 2008 study).