Tuesday, November 11, 2008

Sustainable Advice For Retailers and Consumers:

Despite the Downturn, Green is Still Gold

As the retail markets constrict and people consider their wallets above all other factors, the question for marketers is: what do people value?

“Green,” sustainable, and organic products saw a big upswing in sales prior to the economic meltdown that started in September. But given the fact that many of these items – especially organic goods – are often more expensive than their ordinary counterparts, can we expect that the demand for organic, green and other eco-conscious labels to remain strong? After all, even retail giant Whole Foods has, pardon the pun, beefed up its economizing marketing campaigns, with a new “Whole Deal” website that provides corporate and customer tips on how to eat well on a budget (“More of the Good Stuff for Less,” is the byline).

Industry watchers like the Organic Consumers Association claim that organics have not yet felt much of a decrease in demand. In fact, many argue that green is a great way to ride out the recession: greater concerns about the dollar mean that people are more likely to spend carefully, with every eye on making things matter. In June, Environmental News Network suggested that organics remained a strong concern, particularly among buyers who had deeply integrated green or sustainable products into their lifestyles. This isn’t the largest share of the market (they estimated 20%), but it might be enough to keep it afloat. Also look for luxury green items to stay in demand, particularly in Europe, where the taste for organic and local is more deeply integrated into everyday life and even government policy. Guides for the wealthy environmentalist (like the Green Connoisseur) are banking on the continued power of both kinds of green.

Another big tie-in for the sustainable market is cause-related marketing, which remains a very strong consumer concern. Companies like Annie's Mac and Cheese, Stoneyfield Yogurt, and Vita Soy promote causes on their boxes and container lids to raise funds for school gardens and breast cancer research. Stoneyfield even allows the buyer to shape donations by choosing the environmental charity they like best. The bottom line is that consumers have high standards for the philanthropic activities of their favorite companies and are well aware of the need for collaboration between business, governments, and non-profits in an effort to solve pressing social and environmental issues. Interestingly more than 90% of the Americans surveyed believe companies should tell them how they are supporting causes, but do not feel they are getting sufficient information.

Finally, some analysts are arguing that green is economical: Marketing Daily reports on banks and financial service companies that switch to environmentally friendly practices save themselves money, while also earning some much-needed good will from appreciative consumers. Deutsche Bank goes so far as to argue that banks should invest in sustainability practices because “increased spending on green infrastructure can provide enough economic stimulus to avoid a severe recession.” Another reason for companies to invest in green now? The sector continues to grow despite the slowing global economy. According to new figures from bank HSBC, companies in the climate-mitigation business now generate $300 billion in revenues each year. But while you’re at it, do your part to save paper and read the report online!

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