Despite the rapid rise of sustainable options offered to consumers, businesses are witnessing a paradox in consumer decision-making. Just because a consumer holds a positive attitude towards ‘greener’ products and services, it doesn’t mean they will opt to pay more for them. Only 26% of consumers actually buy from a sustainably-driven brand, compared to 65% who say they want to, according to Harvard Business Review.1 So, how do businesses close this ‘intention-action gap’?
At first glance, this is a puzzling situation. Businesses, charities and governments have been relatively good at sustainability storytelling – you don’t need to go far to find product marketing on why you should vote green with your wallet. Daily news reports of the climate crisis and ecological disasters, and messaging on the importance of sustainable living, appear to be everywhere. Yet despite this, consumers aren’t switching to sustainable habits fast enough.
We have already outlined how organisations can use their stakeholder environment to land a sustainability strategy, and then use culture and change management to truly embed it, but it doesn’t end here. Businesses need to change core customer behaviours to be able to hit their sustainability goals. Considering the complexities of human behaviour and how these drive customer decision-making is vital in closing the ‘intention-action gap’.
HOW CAN WE ‘NUDGE’ CONSUMERS TO MAKE SUSTAINABLE DECISIONS?
Behavioural scientists Katherine White, Rishad Habib and David Hardisty refer to ‘habit formation’ as a key psychological factor in encouraging sustainable consumer behaviour.2 New habit formation is critical for repeat decision-making – the shift from a one-time decision to routinely choosing the more sustainable option.
According to the SHIFT framework, there are four strategies that organisations can leverage to nudge consumers towards sustainable decision-making.2
1. Make it easy
Sustainability is often perceived as being in opposition to the rise of ultra-convenience driven by retailers such as Amazon. Many consumers assume that sustainable behaviour requires more time and effort on their part than its counter option.2 So, when encouraging sustainable behaviour, organisations should consider how they can make it as convenient as possible for the consumer.
An example of this is when grocery retailer Ocado made two simple changes to home deliveries. First, they encouraged customers to hand their plastic bags back to the driver. Second, they reimbursed the consumer for every carrier bag returned. By doing this, they made recycling plastic bags a no-brainer – it was easier and more cost-effective than not recycling. For the customer, it required no planning or further action, and complemented one of the reasons why they shopped at Ocado in the first place – access to an easy service for which you don’t need to leave your house.
2. Leave prompts and cues at decision-making points
From brand choice to delivery options, consumers make a series of decisions when buying a product or service. Leaving prompts at certain points in the customer journey to nudge decision-making can remind the customer to make a sustainable decision.
Many online retailers use ‘green nudges’. For example, grocery retailer Sainsbury’s uses a green van icon to help customers identify ‘eco-time slots’ for their deliveries. Similarly, when a shopper is scrolling through Selfridges online store, products promoting the principles of their sustainability strategy have a small green icon in the corner of the image.
Keep prompts simple and recognisable. Research shows that ‘decision simplicity’ is the single biggest factor for a consumer to follow through on an intended purchase.4 It’s also no coincidence that in these examples the prompts are green. Information about sustainable products are better recognised and understood when they are coloured green over any other colour.5
3. Use incentives
A common perception of greener products and services is that they are the more expensive option. Consumers often cite this as a barrier to sustainable choices, viewing the eco-friendly choice as a luxury.6 Some businesses have, however, been able to flip this perception and drive customers towards sustainable choices by not only making them look like the greener option, but also the cheaper option.
The giants of the high street coffee chains, such as Costa Coffee and Starbucks, persuade customers to opt for a reusable cup by dropping the price of the drink. Renewable energy firm Octopus challenges the stereotype that greener is pricier by claiming to offer ‘fair prices for everyone’ and boasting a 1% difference in its fixed and standard prices last year.
4. Provide feedback
Feedback is a powerful tool when fostering a habit. Many find the satisfaction of action tracking motivating for consistency, whether it’s fitness statistics, energy consumption or money saving.
Businesses have used this method to build sustainable behaviour by providing consumers with information on their environmental impact. For example, mobile navigation app CityMapper encourages the use of public transport by tracking the ‘trees saved’ every time a user completes a journey. Companies with a sustainable purpose often use this method to keep customers coming back. Fruit and vegetable delivery service Oddbox send their customers personalised impact reports throughout the year.
CONSUMER BEHAVIOUR MATTERS
Businesses across the globe are recognising that they need to consider both their internal and external decision-making around sustainability. This can feel like a daunting undertaking, but with the right nudges, they can make sustainable behaviour the most attractive choice for consumers.
1 The Elusive Green Consumer | HBR
2 How to SHIFT Consumer Behaviours to be More Sustainable | SAGE Journal of Marketing
3 Unilever Sustainable Living Plan 2010 to 2020
4 To Keep Your Customers, Keep It Simple | HBR
5 The Role Of Color In Environmental Messages And Claims: Green Can Be Both Beneficial And Misleading | David Eccles School of Business, The University of Utah
6 Sustainability Issues In The Retail Sector | Ipsos MORI
The time is now for businesses to take action to show they are a key part of the solution and not just the problem. Gate One can help businesses to overcome the challenges and explore the opportunities being a sustainable business unlocks.