1、Crafting winning business propositions to expand your customer baseSustainability 2024:Navigating consumer behavior simon-2|Home|Chapter 1 2 3 4 5Table of ContentsDrive sustainable growth with Simon-Kucher 15What should businesses do next?11Executive summary 3What do consumers think?5Four key action

2、s to boost your green agenda 123|Home|Chapter 1 2 3 4 5Executive summarySustainability is no longer just a“trend”its a standard consideration influencing consumer behavior.Our Simon-Kucher Global Sustainability Study confirms this,with 71 percent of consumers viewing environmental sustainability as

3、equally crucial as last year.Despite a 6 percent drop in perceived importance compared to 2022,sustainability remains a top-three purchase consideration for 64 percent of consumers.This decline is likely driven by inflation,which impacts purchasing power and sustainability valuation.Notably,the will

4、ingness to pay more for green products increased from 35 percent to 54 percent.Our survey of 6,120 consumers across the USA,Germany,the UK,Australia,the Netherlands,and India highlights:Changing attitudes toward sustainability Industry-specific consumer views on sustainability The importance of unde

5、rstanding consumer expectations of sustainabilityWe analyzed consumer attitudes toward sustainability and their willingness to pay for green products across industries such as transportation,energy,travel and tourism,retail,financial services,and home construction.1.4|Home|Chapter 1 2 3 4 5To promot

6、e environmental sustainability effectively,businesses must understand what consumers really want.The 2024 study results reveal a growing prioritization of sustainability despite persistent affordability challenges.Businesses must align product development with sustainability goals and leverage custo

7、mer insights to ensure the profitability of green products.Its time to enhance your commercial strategy and improve go-to-market plans for sustainable solutions.5|Home|Chapter 1 2 3 4 5Sustainability and consumer behavior Consumers drive the mainstream adoption of sustainability initiatives,and busi

8、nesses are responding by increasing their commitment to net-zero goals.The challenge now is to understand what consumers need from businesses.The growing interest in sustainability,the willingness to pay for green alternatives,and the proactive approach to verifying businesses sustainability claims

9、indicate an urgent need for businesses to understand consumer behavior.Effectively aligning products and solutions with this demand is crucial.Businesses must ensure their product development and commercialization efforts integrate seamlessly with sustainability goals while prioritizing the profitab

10、ility of green products.To bridge the knowledge gap in aligning commercial strategy with sustainability goals,businesses should focus on addressing these two fundamental questions:What do consumers think?2.Are consumers really willing to pay for green products?What can businesses do to meet consumer

11、 needs?6|Home|Chapter 1 2 3 4 5Decline in growth of importanceThe importance of sustainability declined by 6 percentage points from 2022,likely due to inflationary pres-sures impacting purchasing power.This decrease indicates a slowdown in the growing importance of sustainability.Industry difference

12、sConsumers prioritize sustainability more in industries with a tangible link to environmental issues(e.g.,energy)compared to those with less direct ties(e.g.,financial services).This trend has remained consis-tent since 2022,emphasizing its continued importance.How important is environmental sustain

13、ability to you when making purchasing decisions for the following categories?71%of global consumers feel that environmental sustainability is as important or more to them than it was last year.A snapshot of changing consumer sustainability perceptions31%24%29%31%31%32%39%38%41%42%38%36%40%30%20%29%2

14、0%21%22%18%12%GlobalEnergy&utilitiesConstruction&homeTransportation&leisureAutomotiveConsumer goodsFinancial ServicesNot importantSomewhat unimportantNeutralSomewhat importantExtremely important58%71%7|Home|Chapter 1 2 3 4 5Value drivers behind changing consumer behaviorWhat motivates you to buy sus

15、tainable products and services?12345678Sustainability as a top priority 64 percent of respondents consider environmen-tal sustainability one of their top three purchasing considerations after price.Consumers are primarily motivated by a sense of responsibility.Businesses should tailor their go-to-ma

16、rket strategies to resonate with the deeply held values and beliefs of their target audiences,fostering long-term success.“Internal”motivators“External”motivators“Securing the future”motivatorsA sense of responsibilityA fear of environmental damageFeeling good about my purchaseFor the benefit of you

17、nger generationsA desire to act as a role modelFor social recognitionSocial pressureOther reasons7%of respondents:“I do not buy sustainable products and services”8|Home|Chapter 1 2 3 4 5Active consumer engagementSustainability is no longer just a buzzword its a decisive factor in consumer behavior.O

18、ur research shows that approximately 70 percent of consumers independently verify sustainability claims.Among the 57 percent who believe their preferred brands engage in greenwashing,about 80 percent conduct their own research before mak-ing a purchase.To enhance customer loyalty,businesses must pri

19、oritize clear communication and transparency regarding their sustainable initiatives.Their claims must stand up to consumer scrutiny.Respondents(%)AgreesDisagrees9%16,6%57,6%25,8%34%57%YesSometimesNoNeutralDoes own research(%)Share of respondents that feel greenwashing occurs at the brands they useS

20、hare of respondents that will conduct own research9|Home|Chapter 1 2 3 4 5New changes in affordability and accessibilityAffordability challenge Sustainability is now a top value driver,with consumers actively incorporating it into their purchasing decisions.However,affordability remains a significan

21、t barrier,with 38 percent of respondents finding sustainable alternatives too costly.There has been a 7-point increase in consumers viewing sustainable options as too expensive compared to previous years.Improved accessibilityIn recent years,sustainable alternatives have become much more accessible.

22、With more eco-friendly options available,accessibility barriers have significantly decreased,marking a positive trend.However,high costs and the perception of expensive green alternatives continue to hinder the growth of sustainable purchases.Accessibility barriers decreased by 13 percentage points

23、from 2022 to 2024(from 25 to 12 percent).10|Home|Chapter 1 2 3 4 5Increased willingness to pay a premiumConsumer willingness to invest in sustainable alternatives has surged,with 54 percent now ready to pay a higher price a notable increase from around 35 percent in previous years.The consumer goods

24、 industry has the highest number of consumers willing to pay a premium for sustainable offerings,which have relatively low additional costs.Respondents(%)40%36%39%33%35%34%59%57%55%50%49%40%Consumer goodsAutomotiveConstruction/homeElectricity&heatingTransportationFinancial services2022202454%Share o

25、f respondents that are willing to pay a sustainability premiumGlobal avg.54%11|Home|Chapter 1 2 3 4 5What should businesses do next?One thing is certain:Consumers are increasingly focused on sustainability and green alternatives despite concerns about greenwashing and affordability.Environmental sus

26、tainability is now a mainstream concern for both consumers and busi-nesses.The question is:How can businesses translate consumer needs and preferences into actionable insights to grow their customer base?Its time for businesses to act decisively.Consumers are influenced by how companies integrate su

27、stainability and create long-lasting value.Therefore,businesses must innovate to attract customers with compelling offers,commercialize sustainable solutions,and implement growth strategies.3.12|Home|Chapter 1 2 3 4 5Use these findings to align your commercial strategy with sustainability goals.Targ

28、et the right customer segmentsSustainability means different things to different people.A one-size-fits-all approach fails to recognize diverse sustainability needs across various customer and market segments.Focus on segments that prioritize sustainability.Understand their needs and tailor your pro

29、duct offerings to align with their values.Targeted marketing strategies can effectively communicate how your sustainable offerings address consumer concerns and what they are willing to pay for these features.Four key actions to boost your green agenda1.4.13|Home|Chapter 1 2 3 4 5Understand consumer

30、 expectationsOnce you understand consumer expectations regarding sustainability,incorporate relevant criteria into your offerings to build trust.Customers are passionate about environmental issues and invest time in educating themselves.Pursue green business certifications,ethical sourcing,and other

31、 sustainability benchmarks to demonstrate honest efforts and maintain transparency.This helps avoid greenwashing charges and builds long-lasting trust.Ensure your products meet or exceed these standards by using eco-friendly materials,reducing carbon footprints,or supporting ethical labor practices.

32、Regularly update your sustainability standards to align with consumer expectations and industry trends.2.Align pricing with willingness to payWith consumers actively seeking green alternatives,refine your pricing strategies to improve price perception.Your sustainable offerings need to be competitiv

33、ely priced to match consumer willingness to pay.Address the affordability barrier by prioritizing production cost management.Reduce costs without compromising sustainability by improving sourcing and streamlining manufacturing processes.Introduce pricing strategies like tiered pricing or bundling op

34、tions to make sustainable products more accessible while maintaining profitability.3.14|Home|Chapter 1 2 3 4 5Communicate added valueA compelling sustainability story is invaluable in communi-cating the positive impact of choosing your products.Strengthen your companys sustainable proposition by con

35、-veying the added value and benefits of your sustainable offerings.Build trust and credibility with consumers by openly discussing your sustainable practices,certifications,and initiatives transparently and authentically.Highlight how your green alternatives help the environment and the ethical bene

36、fits of your offerings.Use various marketing channels to demonstrate your brands value proposition and how it aligns with consumers desire to make a positive impact.This connection will build customer loyalty and retention.4.15|Home|Chapter 1 2 3 4 5Drive sustainable growth with Simon-KucherIn 2024,

37、consumers see themselves as the primary drivers of positive environmental change.However,they increasingly look to businesses for support in guiding and expanding their sustainability efforts.If youre struggling to make a real impact in your commercial strategy,our 2024 consumer insights can help yo

38、u develop a profitable value proposition centered around sustainability.At Simon-Kucher,our consultants have a deep-rooted understanding of commercializ-ing sustainability across different industries.We provide comprehensive support,from opportunity assessment and target segmentation to market strat

39、egy,commercial game plans,and implementation.Our experts can help you scale your sustainability transformation,keeping your consumers at the heart of your business growth.Contact us to advance your green agenda and drive sustainable growth.5.16|Home|Chapter 1 2 3 4 5Andreas von der GathenCEO|Bonn,Ge

40、rmanyandreas.gathensimon-Nicolai Broby EckertSenior Partner|Copenhagen,Denmarknicolai.brobyeckertsimon-Olivier HagenbeekDirector|Amsterdam,The Netherlandsolivier.hagenbeeksimon-Mirnesa IbisevicManager|Amsterdam,The Netherlandsmirnesa.ibisevicsimon-AuthorsAbout Simon-KucherSimon-Kucher is a global consultancy with more than 2,000 employees in