November 19, 2008
Retailers Told to Keep Marketing Green
Jonathan Dodd, evp/director
of strategy at G2, a global marketing services agency, thinks eco-friendly
business practices will survive the recession and retailers that continue
to promote their greenness will benefit once the economy starts growing
again.
Mr. Dodd told Brandweek, "The current economic cycle will
eventually bottom out. The challenges facing the planet will not
recede as quickly or as easily. Sustainability is a long-term commitment.
It’s one thing to focus on other priorities and another thing altogether
to backpedal on commitments made. Times of change also offer opportunities
to change the game. If Wal-Mart, a retailer that is doing relatively well
in these challenging times, can maintain its commitment to sustainability
and price, it could emerge in a far stronger position that by focusing
on price alone."
Among retailers, Mr.
Dodd said Tesco’s Green Clubcard Program, which
provides consumer rewards for buying green products, was most worthy of
emulation. He hadn’t seen anything on par with it, however, in the U.S.
yet.
Creating a similar program
would allow retailers to establish credibility for corporate sustainability
goals while serving as an "easy
way to motivate and reward consumers to pursue greener behaviors," he
said.
Mr. Dodd pointed to
programs such as "BP offering carbon-offsetting opportunities" as
a means to promote a desired behavior on the part of consumers while reinforcing
a positive image in their minds at the same time.
He
pointed to Kroger for an example of how to market eco-friendly attributes
while addressing other concerns more immediately top-of-mind with shoppers.
The grocer, Mr. Dodd told Brandweek, promoted "some of its private label
brands not only as competitively priced, but also as using recyclable paper
in their packaging to add value to the overall proposition."
Discussion Questions:
Should retailers and brands step back from green initiatives considering
the financial challenges faced by shoppers? Is there a way for retailers
to have their green cake and eat it too? What merchants in the U.S. or
abroad are navigating the economic crisis while building on their green
credentials at the same time and doing it successfully?
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The retail environment is such that capital improvements should for the most part be backburnered until things get better. Consumers aren’t rushing out to by hybrid cars–they aren’t out buying anything.
Being a little green isn’t going to save your retail rump. What will save your rump is recognizing the current retail environment and busting your buns to communicate the value you can provide and covering the consumer up with customer service. Put your money in promotions and service and leave the skylight, biodegradable bags, and solar heating for later.
Green options at retail, given a reasonable pricing strategy, give shoppers something more positive to feel while spending. Counteracting the incredible stress with even a momentary bright thought of “doing good” is important, and shoppers build loyalty to things that generate positive emotions.
Most green initiatives are fantasy anyway. Consumers are getting numb to them. Anyone can claim to be doing something green with minimal effort. Generally, just good common-sense business practices are considered green.
In the next 25 years, the most successful economy in the world will be the one with the most efficient per capita energy use. Keep an eye on Brazil, India and China. While these countries may not be terribly efficient now (excepting Brazil) what is notable is that they do not have energy wasting systems and habits institutionalized in their economies as the U.S. does.
In the United States, there has been a most arrogant attitude toward energy usage. “We’ll use what we want because we have it and with no apologies.” The crowds chanting “drill, baby, drill” indicate a real lack of connection to the meaning of this country using 25% of the energy resources yet having only 3% of the energy reserves.
Anecdotally, I imagine it is my generation that leads the “drill, baby, drill” crowd. My thirty-something children certainly don’t. They have been and continue to be very energy and environmentally aware. Perhaps, the view of the future of their generation is much longer than the view from mine.
Investment projections suggest that oil must be at least $100 per barrel for investments in alternative energy to make sense. As the price of oil ran up earlier this year, plenty of money became available for alternative and sustainable energy initiatives. As oil dropped down much of those funds disappeared.
The inertia against energy and environmental activities is huge. It must not be allowed to be turned on and off based on what ever the current economic situation is. If so, the U.S. will be left behind those economies that have a 25-year window of the future rather than “the future is now” as we see it in the U.S.
Stepping back from these important green initiatives just because the market is soft is akin to not going to the gym because you’re feeling tired! You know that getting in shape is just a smart thing to do, so you fight through the fatigue.
The same applies to green initiatives. Ethical, intelligent, differentiating and eventually very profitable, green retailing is here to stay.
Mr. Dodd is right. There is increasing consumer (and business) momentum in this space though it’s not about green for green’s sake.
In addition to Tesco’s program, I’d like to point out another one called EcoUnit — http://www.ecounit.com. They have a very solid platform for green behavior and loyalty.
Hopefully this time around, the United States will get serious about energy independence. This will solve more ills than one can imagine. Assuming this is true; business should continue to invest in green technology. The question is, at what rate? Management should not stop these programs but should consider slowing down the pace.
I would say that any initiative that distracts customers from thinking about the economy is a good initiative. The green campaign is a great focus because it is already on the minds of consumers.
If merchants have already made a green commitment, then they should adhere to it. And for retailers that haven’t done so, the down economy may offer a green opportunity. In either case, green is a differentiator. On the product side and for the darker shade of green consumer, it shifts the “value equals price” equation by including environmentally friendly and sustainable goods. And on the corporate side, it can be a money-saver in the energy space.
The faltering economy may require that some initiatives get reprioritized. But overall, I don’t see green passions ebbing among consumers. Retailers that fail to stay abreast of the green movement because of the economy are really doing themselves more harm in the long term. And going green is still a great way to show that merchants care.
Going green can also mean being economical, being more prudent, more thrifty. Asking consumers to bring their own bags, not wasting energy and materials in repackaging, a bit more clutter to save on space, neighborhood markets and simpler choices to bring supplies closer to consumers, efficient lighting/cooling. All such ‘Green’ steps would also lead to lot of savings in cost which can, in turn, definitely help the consumers.
Retailers and brand marketers who have adopted sustainability initiatives that are better for the planet, shoppers and companies will continue to develop ideas that work for everyone. In the area of sustainable packaging, new designs can lead to better cube efficiencies, material savings, lower shipping costs, damage reduction, shelf impact and more. This isn’t a good idea?
Companies that demonstrate environmental stewardship in their business have been successful when the value equation is improved for the shopper, as well as the bottom line. These companies say, “Sustainability is a way of doing business, not a marketing program.” There is also a lot of “green” hype out there–consumers will make choices based on what they believe to be true and valuable for them.
Whether they should or will are two separate and equally important questions. Those that do–and I think there will be many–are being shortsighted. They will pay a price when the economy picks up again and customers decide to stop shopping with them. Those that stick to their guns–and principles–will see the benefits. That’s my viewpoint, in any case.
Green initiatives are generally poorly-thought-out, politically motivated, and incapable of passing the “duh” test when anyone cares to administer it. But, we are chronically challenged in the area of intellectual inquisitiveness–leaning toward “duh” as gospel–and tend to believe untruths told many times. Those who didn’t do their homework in school continue that practice in real life. “Green credentials” are simply a branch of “pc” credentials.
Here’s a clarification for those who are interested: “Green” is forward-thinking and worthy of support when it involves initiatives such as conservation, less packaging, sustainability, and practice-proven alternative energy sources such as solar. “Green” initiatives such as carbon footprint assessments, the global warming hoax, and disproven alternative fuel sources such as ethanol from biomass that used to feed humans are not worthy of support. Retailers must understand the differences and support the right initiatives.
“Buy my product or the planet will die.” The consumer is a lot more cynical–and rightfully so–about green marketing than you think.
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The retail environment is such that capital improvements should for the most part be backburnered until things get better. Consumers aren’t rushing out to by hybrid cars–they aren’t out buying anything.
Being a little green isn’t going to save your retail rump. What will save your rump is recognizing the current retail environment and busting your buns to communicate the value you can provide and covering the consumer up with customer service. Put your money in promotions and service and leave the skylight, biodegradable bags, and solar heating for later.
Green options at retail, given a reasonable pricing strategy, give shoppers something more positive to feel while spending. Counteracting the incredible stress with even a momentary bright thought of “doing good” is important, and shoppers build loyalty to things that generate positive emotions.
Most green initiatives are fantasy anyway. Consumers are getting numb to them. Anyone can claim to be doing something green with minimal effort. Generally, just good common-sense business practices are considered green.
In the next 25 years, the most successful economy in the world will be the one with the most efficient per capita energy use. Keep an eye on Brazil, India and China. While these countries may not be terribly efficient now (excepting Brazil) what is notable is that they do not have energy wasting systems and habits institutionalized in their economies as the U.S. does.
In the United States, there has been a most arrogant attitude toward energy usage. “We’ll use what we want because we have it and with no apologies.” The crowds chanting “drill, baby, drill” indicate a real lack of connection to the meaning of this country using 25% of the energy resources yet having only 3% of the energy reserves.
Anecdotally, I imagine it is my generation that leads the “drill, baby, drill” crowd. My thirty-something children certainly don’t. They have been and continue to be very energy and environmentally aware. Perhaps, the view of the future of their generation is much longer than the view from mine.
Investment projections suggest that oil must be at least $100 per barrel for investments in alternative energy to make sense. As the price of oil ran up earlier this year, plenty of money became available for alternative and sustainable energy initiatives. As oil dropped down much of those funds disappeared.
The inertia against energy and environmental activities is huge. It must not be allowed to be turned on and off based on what ever the current economic situation is. If so, the U.S. will be left behind those economies that have a 25-year window of the future rather than “the future is now” as we see it in the U.S.
Stepping back from these important green initiatives just because the market is soft is akin to not going to the gym because you’re feeling tired! You know that getting in shape is just a smart thing to do, so you fight through the fatigue.
The same applies to green initiatives. Ethical, intelligent, differentiating and eventually very profitable, green retailing is here to stay.
Mr. Dodd is right. There is increasing consumer (and business) momentum in this space though it’s not about green for green’s sake.
In addition to Tesco’s program, I’d like to point out another one called EcoUnit — http://www.ecounit.com. They have a very solid platform for green behavior and loyalty.
Hopefully this time around, the United States will get serious about energy independence. This will solve more ills than one can imagine. Assuming this is true; business should continue to invest in green technology. The question is, at what rate? Management should not stop these programs but should consider slowing down the pace.
I would say that any initiative that distracts customers from thinking about the economy is a good initiative. The green campaign is a great focus because it is already on the minds of consumers.
If merchants have already made a green commitment, then they should adhere to it. And for retailers that haven’t done so, the down economy may offer a green opportunity. In either case, green is a differentiator. On the product side and for the darker shade of green consumer, it shifts the “value equals price” equation by including environmentally friendly and sustainable goods. And on the corporate side, it can be a money-saver in the energy space.
The faltering economy may require that some initiatives get reprioritized. But overall, I don’t see green passions ebbing among consumers. Retailers that fail to stay abreast of the green movement because of the economy are really doing themselves more harm in the long term. And going green is still a great way to show that merchants care.
Going green can also mean being economical, being more prudent, more thrifty. Asking consumers to bring their own bags, not wasting energy and materials in repackaging, a bit more clutter to save on space, neighborhood markets and simpler choices to bring supplies closer to consumers, efficient lighting/cooling. All such ‘Green’ steps would also lead to lot of savings in cost which can, in turn, definitely help the consumers.
Retailers and brand marketers who have adopted sustainability initiatives that are better for the planet, shoppers and companies will continue to develop ideas that work for everyone. In the area of sustainable packaging, new designs can lead to better cube efficiencies, material savings, lower shipping costs, damage reduction, shelf impact and more. This isn’t a good idea?
Companies that demonstrate environmental stewardship in their business have been successful when the value equation is improved for the shopper, as well as the bottom line. These companies say, “Sustainability is a way of doing business, not a marketing program.” There is also a lot of “green” hype out there–consumers will make choices based on what they believe to be true and valuable for them.
Whether they should or will are two separate and equally important questions. Those that do–and I think there will be many–are being shortsighted. They will pay a price when the economy picks up again and customers decide to stop shopping with them. Those that stick to their guns–and principles–will see the benefits. That’s my viewpoint, in any case.
Green initiatives are generally poorly-thought-out, politically motivated, and incapable of passing the “duh” test when anyone cares to administer it. But, we are chronically challenged in the area of intellectual inquisitiveness–leaning toward “duh” as gospel–and tend to believe untruths told many times. Those who didn’t do their homework in school continue that practice in real life. “Green credentials” are simply a branch of “pc” credentials.
Here’s a clarification for those who are interested: “Green” is forward-thinking and worthy of support when it involves initiatives such as conservation, less packaging, sustainability, and practice-proven alternative energy sources such as solar. “Green” initiatives such as carbon footprint assessments, the global warming hoax, and disproven alternative fuel sources such as ethanol from biomass that used to feed humans are not worthy of support. Retailers must understand the differences and support the right initiatives.
“Buy my product or the planet will die.” The consumer is a lot more cynical–and rightfully so–about green marketing than you think.