Consumer responses to environmental and ethical issues

Transcription

1 Consumer responses to environmental and ethical issues Durrell Wildlife Conservation Trust Andrew Curry May

2 The three waves of environmental and ethical behaviour Limits Green Globalisation 1962 Source: John Elkington/SustainAbility 2005 Rachel Carson, Silent Spring Limits to Growth published First green Consumer titles No Logo

3 Consumers are taking action to express dissatisfaction with companies % Which of the following have you done in the last year to express your dissatisfaction? Stopped buying from companies who might damage the environment Stopped buying from companies who might act unethically Stopped buying from companies who supply unhealthy goods ITA SPA AUS GER FRA JAP TUR USA UK CH RUS POL IND BRA

4 1 2 3 Underlying ethical/environmental attitudes appear strong I make sure I regularly buy products and services from companies that... Highest ranked Second ranked Third ranked Actively improve the environment AUS USA SPA GER FRA ITA UK JPN Actively treat their workers well Are transparent in their business practices Pay producers a fair price Actively support their local community Pay a proportion of their profits to charity Source: HenleyWorld,

5 12000 The UK ethical market shows steady growth Value of selected UK ethical/green sectors, m, ,027 10,626 Ethical finance ,395 7,679 6,924 6,479 5,284 6,061 5,175 3,469 3,765 4,047 2,570 2,764 2,833 1,984 2,567 1,037 1,299 1,553 1,448 1,098 1,521 1, Personal Food Green home Travel and transport Source: Cooperative Bank Ethical Consumers Report,

6 But there are limits to what consumers can do There is not enough evidence that green consumers on their own are able to change mainstream product markets I will if you will, Sustainable Development Commission (UK),

7 Yet in some categories, green is all but mainstream Unleaded petrol: ~100% Recycled content newspaper: ~75% Free range eggs: 40% Fair trade coffee: 20% (ground coffee) Dolphin friendly tuna: 70% Source: I Will If You Will, SCRT 7

8 So how do markets move? Consumer world Product Awareness Price Performance Influencing factor Hygiene factors 8

9 The industry half of the equation Supplier world Public procurement Retailer leadership Legislation/ regulation Choice editing Product Industry agreement Supply side activity Consumer experience Source: Sustainable Development Commission/HCHLV analysis 9

10 So how do markets move? Supplier world Public procurement Consumer world Retailer leadership Price Legislation/ regulation Industry agreement Choice editing Product Awareness Performance Supply side activity Consumer experience Critical perception factor Hygiene factors Source: Sustainable Development Commission/HCHLV analysis 10

11 Consumer responses to environmental issues: the Henley segmentation 11

12 What is segmentation? The process of splitting customers into different groups within which customers with similar characteristics have similar needs. By doing this, each one can be targeted and reached with a distinct marketing mix. Market Segmentation, Malcolm McDonald and Ian Dunbar,

13 Our approach to segmentation Soft - Insightful - Attitudes, Vales Needs, Lifestyles Hard - Actionable - Database, Behaviours Using intelligence to change or reframe the conceptualisation of the market Tripartite Approach Using advanced analytic techniques to unlock the power of combining customer data with research findings Future Proofed - Grounded in consumer trends Using trends intelligence to ensure the segmentation is forward looking and of lasting value to the business 13

14 Building the environmental and ethical segmentation Attitudinal factors Good consumption Global concern Desire to live ethically Responsibility Transport Behavioural factors Buying from good companies Doing easy things Buying local Complaining Boycotting Support causes Engaged activities 14

15 UK ethical and environmental segmentation LAGGARDS LATE MAJORITY EARLY MAJORITY EARLY ADOPTERS/ INNOVATORS Onlookers 26% Only moderately concerned about ethical and environmental issues Not particularly desiring to live ethically, or doing the easy activities Conveniently Conscious 35% Aware of, and fairly concerned about, environmental change and ethical issues Think that other people should be peanalised for not recycling, and companies for unethical behaviour Doing easy things like reducing water use, but not interested in ethical consumption or local issues Positive Choosers 31% Highly aware, concerned and feel guilty about their lifestyle Desire to live ethically, regularly buy from good companies and boycott bad companies However do not complain vocally Supporting the local community is also very important to this group Vocal Activists 4% Concerned, aware and active Positive Choosers who also vocalise their discontent Principled Pioneers 4% The most committed Positive Choosers installing alternative energy sources and calculating their carbon footprint INCREASING ETHICAL AND ENVIRONMENTAL CONCERN AND ENGAGEMENT Source: HenleyCentre HeadlightVision Planning for Consumer Change

16 Good Consumption Global Concern Important to be able to buy locally produced goods Important to avoid fresh fruit & veg. flown in from another country Important to reduce the packaging on the products you buy I prefer to support my local shops rather than go to the supermarket Climate change is the biggest single problem facing the world today The world is rapidly running out of clean, safe drinking water Increasingly we are facing global food shortages that will affect us all In the last 12 months I have become more environmentally aware I think people who don t recycle should be penalised Companies should be heavily penalised if they act unethically Important to be able to recycle your rubbish Politicians should lead the way on environmental issues The idea of ethical living bores me I feel bad about not living as ethically as l would like to Being able to buy ethically produced goods Because of the impact on the environ t I feel guilty taking short haul flights I would be prepared to pay to use a road Four wheel drive vehicles should be banned in urban areas I feel guilty driving my car when I could use public transport instead Segment attitudes Responsibility Positive Choosers Desire to live ethically Vocal Activists Leisure and transport Principled Pioneers Indices: 100 = UK Average Source: HenleyCentre HeadlightVision Planning for Consumer Change

17 Segment attitudes Good Consumption Global Concern Important to be able to buy locally produced goods Important to avoid fresh fruit & veg. flown in from another country Important to reduce the packaging on the products you buy I prefer to support my local shops rather than go to the supermarket Climate change is the biggest single problem facing the world today The world is rapidly running out of clean, safe drinking water Increasingly we are facing global food shortages that will affect us all In the last 12 months I have become more environmentally aware I think people who don t recycle should be penalised Companies should be heavily penalised if they act unethically Important to be able to recycle your rubbish Politicians should lead the way on environmental issues The idea of ethical does NOT living bore me I feel bad about not living as ethically as l would like to Being able to buy ethically produced goods Because of the impact on the environ t I feel guilty taking short haul flights I would be prepared to pay to use a road Four wheel drive vehicles should be banned in urban areas I feel guilty driving my car when I could use public transport instead Responsibility Onlookers Desire to live Leisure and ethically transport Conveniently Conscious Indices: 100 = UK Average Source: HenleyCentre HeadlightVision Planning for Consumer Change

18 Conveniently Conscious and Positive Choosers are more likely to be women 100 % Female Male 10 0 Total Onlookers Conveniently Conscious Positive Choosers Vocal Activists Principled Pioneers Source: HenleyCentre HeadlightVision Planning for Consumer Change

19 The extreme segments tend to be younger % Total Onlookers Conveniently Conscious Positive Choosers Vocal Activists Principled Pioneers Source: HenleyCentre HeadlightVision Planning for Consumer Change

20 Positive Choosers and Vocal Activists are more likely to be ABC1 100 % DE C2 C AB 0 Total Onlookers Conveniently Conscious Positive Choosers Vocal Activists Principled Pioneers Source: HenleyCentre HeadlightVision Planning for Consumer Change

21 The top 3 segments are far more likely to have actively engaged in ethical/environmental consumerism in the last year % Done in the last year Buy Fairtrade products Buy food from Farmers Markets Buy locally sourced food that uses fewer food miles Buy environmentally friendly products Total Onlookers Conveniently Conscious Positive Choosers Vocal Activists Principled Pioneers Source: HenleyCentre HeadlightVision Planning for Consumer Change

22 The late majority is aware of climate change but less guilty % Agreeing 100 Climate change is the biggest single problem facing the world today Increasingly we are facing global food shortages that will affect us all I feel bad about not living as ethically as l would like to Total Onlookers Conveniently Conscious Positive Choosers Vocal Activists Principled Pioneers Source: HenleyCentre HeadlightVision Planning for Consumer Change

23 But they are up there with the top 3 segments in terms of making the easy changes % Done in the last year Recycle more rubbish Switch off standby buttons Buy energy efficient light bulbs Increase energy efficiency in your home Reduce your water usage Use your car less for short journeys Total Onlookers Conveniently Conscious Positive Choosers Vocal Activists Principled Pioneers Source: HenleyCentre HeadlightVision Planning for Consumer Change

24 All but the laggards aware and willing to take fairly drastic actions % Agreeing 90 Climate change is the biggest single problem facing the world today I think people who don t recycle should be penalised Four wheel drive vehicles should be banned in urban areas Total Onlookers Conveniently Conscious Positive Choosers Vocal Activists Principled Pioneers 24

25 What does this mean for business? 25

26 There are business benefits from engaging with green and ethical markets Increased investor returns Improved brand value Innovation Talent retention Reduced costs Improved strategic awareness Differentiation/ leadership Source: Henley Centre HeadlightVision 26

27 And there are risks in not doing so Thinking of damage to the environment and climate change, who do you think (UK) % is MOST at fault for causing environmental damage/climate change? % is MOST responsible for tackling environmental damage / climate change? % 11% 22% Individuals Industries / companies 10% Central government 2% Local government 3% 3% 0% Non Govt / Non-Profit organisations 6% 16% International bodies and agreements Source: HenleyWorld,

28 So, by way of a conclusion What s happening, unbeknownst to many corporate leaders, is that the goalposts for their businesses license to operate have moved. There are higher expectations and more serious consequences, and the implications go way beyond protecting your reputation or managing costs In the end, that s the holy grail of sustainability investing to seize the opportunities, not just avoid the risks. David Blood, Generation Investment Management Investing in sustainability 28

29 Thank you 29

30 Appendix: Notes on segmentation

31 Common problems with segmentations My segmentation is too complicated too many segments My segmentation is too general age, income, gender etc My segmentation is not replicable no data beyond name or address My segmentation is too theoretical no-one understands what I m talking about My segmentation is too difficult to implement difficult to use for identifying and targeting customers 31

32 HCHLV principles of segmentation 1. Grounded in consumer trends and insight Capable of future proofing 2. Simple and memorable Ensuring that it is usable to all within the business 3. Marries hard data (e.g. value) with interpretative dimensions (e.g. attitudes or needs) Informing both targeting and tailoring of offers 4. Flexible in usage A framework that can be cut in different ways to meet different objectives within the organisation Informs both strategic and tactical decisions 5. Business relevant and Actionable Fit for purpose Can be implemented across systems within the business 6. Owned by the whole organisation, not just marketing 32

33 Attitudinal factors Good consumption Important: Being able to buy locally produced goods Important: Avoiding fresh fruit and vegetables that have been flown in from another country Important: Reducing the packaging on the products you buy I prefer to support my local shops rather than go to the supermarket Global concern Climate change is the biggest single problem facing the world today The world is rapidly running out of clean, safe drinking water Increasingly we are facing global food shortages that will affect us all In the last 12 months I have become more environmentally aware Desire to live ethically The idea of ethical living bores me (disagree) I feel bad about not living as ethically as l would like to Important: Being able to buy ethically produced goods Responsibility I think people who don t recycle should be penalised Companies should be heavily penalised if they act unethically Important: Being able to recycle your rubbish Politicians should lead the way on environmental issues Transport Because of their impact on the environment I feel guilty taking short haul flights I would be prepared to pay to use a road (motorway bypass city centre ) if it meant it would be less busy Four wheel drive vehicles should be banned in urban areas I feel guilty driving my car when I could use public transport instead Source: HenleyCentre HeadlightVision Planning for Consumer Change

34 Behavioural factors Buying from good companies Regularly buy from companies that: Have a responsible waste management and recycling program Treat their workers well Pay producers a fair price Are transparent about their business practices Actively improve the environment Avoid using pesticides in their production processes Doing easy things Which of the following have you done in the last 12 months for ethical or green reasons: Switch off standby buttons Reduce your water usage Increase energy efficiency in your home Recycle more rubbish Use your car less for short journeys Buy energy efficient light bulbs Buying local Regularly buy from companies that: Manufacture or grow their products locally Actively support my local community Which of the following have you done in the last 12 months for ethical or green reasons: Buy food from Farmers Markets Buy locally sourced food that uses fewer food miles Complaining Which of the following have you done in the last 12 months: Complained about companies you feel are damaging the environment Complained about companies you feel are supplying unhealthy products Complained about companies you feel are acting unethically Boycotting Which of the following have you done in the last 12 months: Stopped buying from suppliers you feel are acting unethically Stopped buying from companies you feel are damaging the environment Stopped buying from companies you feel are supplying unhealthy products Support causes Regularly buy from companies that: Actively support developing countries Pay a proportion of their profit to charity Which of the following have you done in the last 12 months for ethical or green reasons: Buy a product because of its charity link Donate money to environmental charities Buy environmentally friendly products e.g environmentally friendly washing up liquid Engaged activities Which of the following have you done in the last 12 months for ethical or green reasons: Install an alternative energy source e.g. solar panels/ wind turbines Calculate your carbon foot print Source: HenleyCentre HeadlightVision Planning for Consumer Change

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