Jan Bock, Senior Management, Purchasing International of Lidl Stiftung and Co. KG (Germany) reviewed customer surveys from around the world and noted the following interesting, but sometimes conflicting conclusions regarding consumers willingness to pay more for environmental benefits:
- 81% of Chinese will pay more for energy-saving products. (Greendex 2010)
- 60% of consumers will pay a premium - on average 18% - for goods with a social or environmental benefit. (Prof. Winer, 2013)
- 50% of global consumers will pay more to companies with programs that benefit their society. (Only 36% of consumers in the EU but 75% of those in India - Neilsen, 2013)
On the other hand…
- While 83% of global customers feel its important to improve the environment, only 22% would pay more for eco-friendly products. (Neilsen, 2011)
- Consumers have no interest in reducing climate change by paying more for low-impact products (Canada, 2004)
- 73% of consumers don’t buy products with environmental benefits (IGD, 2008)
Mr Bock thought consumer surveys will generally overestimate the willingness to pay for sustainability. Premiums are more likely for products with tangible benefits which directly affect the purchaser, and so marketing should be specific rather than general: global warming benefits and C-footprint are hard to sell. They’re also more likely to pay extra for non-durable, frequently purchased items than durables, and for “egotistical” rather than “altruistic” products.
Nevertheless, developing sustainable products does make sense because they are good for the environment and do build goodwill for your company and brands.