Consumers have a lot to consider before making a purchase of anything during these trying economic times.

On top of traditional purchase factors (Price, brand etc.) consideration of a company’s environmental and social stance seems to play a bigger & bigger role right now.  According to an excellent recent report by Forrester analyst Sally Cohen, consumers say that on top of everything else, their purchases are now generally influenced by the following social and environmental elements:

How companies treat people and communities: According to the Forrester report, 2/3 of consumers said that socially responsible practices influence their purchase decisions.  While this majority of consumers won’t pay extra for products from companies that behave in these ways, social responsibility can prove a tie-breaker between products or build brand equity. A smaller — but sizeable — 18% of consumers are willing to put their money where their ethics–representing 40.2 million adults in the US.

Whether companies incorporate green practices into their products: 59% of consumers say they take the environmental practices of manufacturers and products into account when making a purchase.  15% of consumers would pay more for products that are made by companies recognized as environmentally friendly.

Sally also points out: The ethically minded consumer is attractive: Consumers who are willing to pay more for environmentally and socially responsible products are higher income, brand loyal and very optimistic about technology.

Other interesting notes:  The Forrester report shows that socially minded consumers skew more male, while environmentally minded consumers skew more female.   I have to say, I was a little surprised to see that males are more (if only slightly) socially conscious.

Sally’s report is exciting and should be a significant call to action, however, some observers seem a little more cynical about the recent deluge of optimistic consumer reports & surveys in the social & environmental space–especially when it comes to exuberant environmentalism during a downturn.  In a recent blog post called, Green Consumers Irrational Exuberance, Joel Makower lets out a mini-rant against the seemingly unbridled enviro-optimism of pollsters and green consumers during these difficult times.

Makower asks: Are green-minded shoppers really going forth into the marketplace as idealistic as ever? Are they immune to premium prices? Clearly, some green purchases may fall into the category of small indulgences whose sales often rise during tough times, but probably not to the extent reported by these findings. Makower even goes on to ask a very provocative question…can researchers be greenwashers?

I see Joel’s frustration on this, however, I have a lot of confidence in Forrester…and, I don’t see Forrester needing to intentionally greenwash their findings.  Forrester admits that the group willing to pay more for Green is still pretty small (15%).

It is exciting to see consumers really starting to consider these issues more seriously when making their purchase decisions–despite the downturn.  More and more, consumers are considering the social/green reputations of the companies they intend to buy.

I agree with Sally’s conclusion that intelligent FMCG companies will take these findings on board and incorporate environmental and social responsibility into their products, driving differentiation, incremental revenues, and brand loyalty.

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