77 Percent of Executives Say Sustainability Increases Consumer Loyalty

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New research shows adopting sustainability practices can boost a brand’s key metrics, as 77 percent of executives say sustainability initiatives have increased consumer loyalty. That’s according to Capgemini Research Institute’s latest report on the impact of sustainability on consumers’ buying behavior and where the consumer products and retail (CPR) industry stands in scaling sustainability initiatives.

The findings show that consumers care about sustainability and climate change. About 72 percent say they’re concerned about their environmental footprint. An even larger amount of consumers (79 percent) are changing the way they buy based on the social responsibility, inclusiveness or environmental impact of their purchases.

The main motivations for changing preferences include wanting to make a difference in saving the earth for future generations (80 percent), concerns about fair labor treatment (77 percent) and concerns about issues like poverty and hunger (76 percent).

Additionally, 53 percent of consumers say they’ve switched to lesser-known brands if they’re sustainable.

Yet consumers don’t expect sustainability to come at a higher price, as 65 percent say that sustainable products don’t need to be more expensive than similar, non-sustainable products.

Executives understand that sustainability has far-reaching implications and many feel confident their business can or already does support such programs. For example, 90 percent agree that sustainability is highly important for the industry and 66 percent say that sustainability is fully integrated into their business objectives.

Though consumers value sustainability, safety concerns raised by the pandemic are causing them to prioritize packaging hygiene over sustainable packaging. For example, 54 percent plan to reduce their use of items in refillable packaging. Almost half (40 percent) plan to buy used or refurbished products less. And the same amount prefer their products to come in disposable packaging.

That sustainability costs money and will impact profitability is very dated, says Eelco Smit, senior director of sustainability at Philips. In fact, Capgemini’s research reveals there’s a strong connection between sustainability and business benefits as 80 percent of executives surveyed pointed to an increase in customer loyalty as a key benefit from sustainability programs. Sixty-nine percent say sustainability increases brand value, which is echoed by a similar finding: 70 percent of consumers urge friends and family not to interact with brands they perceive as not environmentally sustainable or socially responsible. Nearly 63 percent of executives also agree that sustainability initiatives helped boost revenues.

Other benefits executives experience from sustainability programs include an increase in employee motivation levels (67 percent), an increase in customer satisfaction scores (65 percent) and an increase in supplier loyalty (61 percent).

Globally, there’s a nearly six percent missed revenue opportunity for brands that don’t practice sustainability. In the US, that figure is 3.1 percent whereas in Italy, it’s 7.8 percent.

While 65 percent of executives believe their customers are aware of their sustainability efforts, nearly half (49 percent) of consumers say they lack the information to verify product sustainability claims and 44 percent say they don’t trust these claims.

Additionally, just 36 percent of consumers think the packaging of products in stores is minimal and eco-friendly and only 37 percent think their retailer has in-store recycling initiatives.

Factors that empower brands to practice sustainable behavior include exploring business opportunities across markets (74 percent) and matching up with competitive pressure (70 percent).

However, companies say internal challenges block their ability to scale sustainability. For example, 80 percent of executives say a key challenge is the impact on margins or cost overruns and three-quarters say other issues or opportunities take priority over sustainability.

The findings are based on a survey Capgemini distributed to 7,500 consumers and 750 senior executives in various sectors of the CPR industry in March.


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