Search
Close this search box.

Consumers Favor Sustainable Brands, but Retailers Believe Otherwise

Sharp Disconnect Exists Between What Brands and Consumers Believe on Sustainable Shopping

Consumers are willing to spend more on sustainable brands than retailers give them credit for, reveals a new report that largely upends traditional expectations held by the retail industry on the sustainability preferences of shoppers.

The report from First Insight, the Warrendale, Pennsylvania-based provider of a predictive analytics solution for businesses to anticipate future outcomes, also reveals major gaps in knowledge among retail executives on the sustainable preferences of consumers. Using data collected from the country’s top retail executives and thousands of consumers, the report suggests that retailers should listen more closely to their customers concerning sustainable shopping issues.

The disconnect between retailers and consumers was palpable throughout various findings in the report. For instance, while two-thirds of consumers say that they would pay more for sustainable products, the same percentage—two-thirds—of retailers believed otherwise, that consumers would not be willing to spend more for sustainable brands.

Another equally revealing discovery was that nearly three-quarters of the surveyed consumer respondents valued product sustainability over brand name. In comparison, nearly all—94%—retailers believed the opposite to be true, that brand name would be more important to consumers than sustainability.

Moreover, retail executives ranked brand-operated resale/recommerce programs lowest when asked about the type of sustainable shopping formats consumers would use the most. Yet 41% of consumers say they already shop at brand resale/recommerce programs, such as those offered by Patagonia, Lululemon, and Levi’s.

Greg Petro, CEO of First Insight, said the company’s report shows clearly that retailers are leaving money on the table. “Brands and retailers must listen to the voice of the customer on issues as critical as sustainability,” Petro said. “Consumers want more than performative measures from retailers and brands when it comes to ESG priorities, which will only become more important as Gen Z grows in influence.”

For the report, First Insight partnered with the Baker Retailing Center at the Wharton School of the University of Pennsylvania, in line with an ongoing commitment from First Insight to providing actionable consumer insights to the retail industry. Since 2007, First Insight has been helping retailers and brands operate more sustainably and make better decisions by using Voice of the Customer (VoC) mechanisms and predictive analytics to refine procurement processes and eliminate poor-performing offerings before costly development and inventory investments are made.

Thomas Robertson, academic director of Wharton’s Baker Retailing Center, said it was imperative for retailers to understand their customers’ values so that they can adapt for the future. Robertson cited the example of half of retail executives believing that price is the primary reason consumers shop across recommerce formats. In fact, only 27% of consumers agree that price is their motivation, while a combined 54% say that they shop resale because they care for the environment and prefer sustainable or circular shopping. Even luxury brands, such as Vestiaire Collective and Farfetch Second Life, Robertson said, believe that resale has a bright future.

Other key findings of the report include disparities on how consumers wish to be compensated for resale items, the frequency at which consumers use recommerce, and price targets for resale items.

In perhaps the most ironic twist demonstrating the profound split between retail expectations on consumer sustainable shopping, all the retail executives in the dataset—a full 100%—assume that consumers would rate retailers low on transparency around their own sustainability efforts. Consumers, however, were a great deal more positive and thought better of retailers, with 59% indicating that they felt retailers were being sufficiently transparent.

Author Information

Alex is responsible for writing about trends and changes that are impacting the customer experience market. He had served as Principal Editor at Village Intelligence, a Los Angeles-based consultancy on technology impacting healthcare and healthcare-related industries. Alex was also Associate Director for Content Management at Omdia and Informa Tech, where he produced white papers, executive summaries, market insights, blogs, and other key content assets. His areas of coverage spanned the sectors grouped under the technology vertical, including semiconductors, smart technologies, enterprise & IT, media, displays, mobile, power, healthcare, China research, industrial and IoT, automotive, and transformative technologies.

At IHS Markit, he was Managing Editor of the company’s flagship IHS Quarterly, covering aerospace & defense, economics & country risk, chemicals, oil & gas, and other IHS verticals. He was Principal Editor of analyst output at iSuppli Corp. and Managing Editor of Market Watch, a fortnightly newsletter highlighting significant analyst report findings for pitching to the media. He started his career in writing as an Editor-Reporter for The Associated Press.

SHARE:

Latest Insights:

Frank Geraci, President at Cronos, joins David Nicholson to share his insights on Huddle, a groundbreaking Smartsheet solution set to redefine configuration management, version control, and the use of Smartsheet portals.
Cicero, Director of Product Marketing at Smartsheet joins David Nicholson to share his insights on ENGAGE 2024. Discover the groundbreaking announcements and the unique energy that makes ENGAGE an unmissable event.
Jennifer Stockton and Courtney Finger share how Smartsheet transformed Conga's marketing operations from "chaos to collaboration," highlighting the pivotal role of Smartsheet in streamlining processes and enhancing creativity at scale.

Latest Research:

In our latest Research Brief, Leveraging Intelligence to Maximize the Value of CRM Data, completed in partnership with SugarCRM, we discuss how AI can be harnessed to deliver real-world benefits quickly through intelligent summarization and cover how SugarCRM is making this capability within its customer relationship management offering.
In our latest research report, Boost Efficiencies and Optimize Performance with Turnkey AI Enterprise Solutions, we examine how organizations can plan and build private AI solutions and why private AI addresses the growing demand for greater control over AI solutions, including protection and transparency.
In our latest research report, Achieve Better Economics and Performance Through Hybrid AI, we examine why the Lenovo Smarter AI for All portfolio and vision can meet the unique demands of selecting and implementing hybrid AI organization wide.