Eco-labels influence consumer behavior in two ways. First, they introduce green as a considered attribute at the point of sale. Second, they enable consumers to comparison shop based on green. Over the past few years, there have been many new eco-labels launched by governments, manufacturers and retailers. Many of these labels are listed on Consumer Reports’ Greener Choices site.
Interestingly, the Natural Marketing Institute’s 2007 LOHAS Consumer Trends Database report determined that not all eco-labels have the same impact. In fact, consumers indicate that they are more likely to make eco-friendly purchase decisions if the eco-labels are also widely recognized and trusted brands in of themselves. Familiar labels for programs like the EPA’s Energy Star have a more significant influence on consumer behavior than others.
While such a finding reinforces the value of eco-labels, it does challenge the notion that CPG companies and retailers should necessarily launch proprietary labels to differentiate themselves on green.
Like all brands, eco-labels take significant time and resources to build. Moreover, given the sensitivities regarding greenwashing, for-profit entities may have to overcome a higher hurdle than government or a non-profit organization given the appearance of conflict if proprietary labels adorn their own products.
As such, Marketing Green recommends that product companies and retailers focus on disclosing product information about environmental impact to differentiate themselves in the market rather than trying to define new green labels. Disclosures provide consumers with information that can inform purchase decisions rather than certify a product’s greenness. This is what HP has done with its launch of Eco Highlights labels on its products.
Marketing Green also recommends that retailers simultaneously push for industry-wide labels. While some retailers may consider proprietary labels as a competitive differentiator, it is likely that broadly recognized labels will accelerate consumer adoption while reduce the cost to support them.
Moreover, retailers should differentiate themselves by sourcing more green products. Arguably, this is one of Wal-Mart’s strategic priorities today. Greater variety combined with recognized eco-labels will likely drive more sales as well as consumer loyalty. In the end, this approach is likely to have more impact for both business and the environment.