Pinterest Emerging as Promising Platform for Green Marketers

October 16, 2012

Over the past 12 months, Pinterest has witnessed explosive growth. The site has topped 23 million unique visitors and average site visit time is nearly 100 minutes per month, making it one of the largest and most engaging social networks around. AdAge raves that “…Pinterest has gone from relative obscurity to exalted status alongside Facebook and Twitter…”

What is so compelling about Pinterest is its simplicity, empowering users to capture, curate and share content of interest at the click of a button. Moreover, its format allows users to easily browse and discover new content pinned by other users.

Brands, including green brands, are increasingly discovering the potential of Pinterest and finding ways to adapt this consumer-centric platform for their benefit.

Promote discovery. Consumers like to browse Pinterest and, while doing so, are discovering brands. Brands are maximizing their chance of being discovered by finding ways to distribute their content on Pinterest.

One way to accomplish this is for brands to directly curate their own Pinterest content. Additionally, brands can make truly compelling content available online. This could include visually powerful images on relevant and timely themes that the growing number of Pinterest users may find and pin onto their personal boards. Consumers can discover content on their own or be encouraged through contests like the one that Method deployed to incentivize Moms to pin images of Method products.

Strengthen brand identity. Companies are also finding ways to leverage Pinterest to help define their brands. They do so by using the Pinterest platform to distribute content that brings to life their brands — or core values.

Whole Foods, for example, says they are committed to “selling the highest quality natural and organic products available”. For Whole Foods, such a commitment originates in the garden where the food is grown and pays off through the appeal of the dish that is ultimately served and the healthier lifestyle to which the food contributes. Pinterest boards sponsored by Whole Foods bring each of these dimensions to life.

Highlight social responsibility. Pinterest can also enable brands to highlight its commitment to corporate social responsibility (CSR) in a very visible and compelling way. In addition to its other Pinterest initiatives, Whole Foods maintains a Pinterest board dedicated to the Whole Planet Foundation and its many initiatives sponsored around the world. Images map where contributions are made and illustrate the good works that are done in a format that seems, in many ways, less constrained or forced than the Corporate Social Responsibility tab on their corporate site.

Drive sales. Eco-friendly brands are also beginning to experiment with social networks to drive sales, and Pinterest is emerging as a key option. When looking at click-through rates to retail sites from the top three social networks — Facebook, Pinterest and Twitter — Facebook continues to drive the vast majority of traffic but Pinterest exceeds Twitter in terms of traffic generation. In fact, Pinterest is now responsible for more than 11 percent of user shopping sessions originating from the top social networks — Facebook, Twitter and Pinterest. Moreover, sales conversion rates for users originating from Pinterest are trending higher than from Twitter. At $169, the average order size of Pinterest users is substantially greater than for users that originate from either Facebook ($95) or Twitter ($71).

Brands like eBay are taking note, promoting eco-friendly products across a myriad of Pinterest boards, including health and beauty, fashion and electronics, and providing each product image with a direct link to a transaction page within the eBay Green site.

For green marketers, Pinterest provides a promising platform to engage consumers and for consumers to discover brands that they might not ordinarily interact with. Pinterest’s unique format provides the opportunity for companies to show their brands to consumers in a visually powerful way. Such interactions can provide dimension to a brand and can potentially drive sales. Green brands will be missing a key emerging opportunity online if they fail to consider their own Pinterest strategy.


Climate Change Turns Personal: Why Brands Must Adapt

August 2, 2012

Until recently, climate change remained an abstract concept to most Americans — something that may have long-term consequences for the planet, but moving too slowly be a significant concern in their daily lives.

Today, however, such sentiments may be beginning to change. As more and more Americans experience such events firsthand, they’re beginning to make the connection between climate change and its growing impact. Natural disasters and extreme weather events such as high winds and rain storms, floods, droughts and heat waves are happening more frequently — and with greater intensity.

There’s some evidence supporting Americans’ change in attitude: A recent survey conducted by Yale and George Mason universities indicates that the vast majority of Americans agrees that climate change is making natural disasters and extreme weather events worse.  More than a third of respondents reported that they personally experienced “harm” to their property, finances or physical or mental health from a natural disaster or extreme weather event in the past year alone.

Brands should take note: Climate change is becoming more relevant for Americans as its effects become more personal.  Crossing such a threshold is significant as it means that consumers will likely become more attuned to corporate activities that impact climate change – either positively or negatively. This, in turn, could significantly impact brand favorability, preference and purchase over time. Consumers may seek to reward brands that help reduce the impact of climate change, while penalizing those that do not.

Climate change is not going away. Many factors have emerged that will only serve to reinforce why climate change is personally relevant for Americans. Here’s how this is happening:

More Americans will experience climate change impact. Whether it be wildfires in the West, floods in the Midwest or Texas droughts, more Americans will be impacted firsthand as the probability of natural disasters and extreme weather events is only expected to increase with time  – and reinforce just how personal climate change’s effects really are.

Our quality of life is increasingly impacted. Natural disasters and extreme weather events are having a growing impact on the personal life of Americans.  While ‘harm’ is an extremely important measure of climate change impact, it does not capture the impact that extreme weather events have on the everyday lives of most Americans.

For example, a violent, fast-moving storm may prevent a mother from dropping off a child at practice. Snow storms in October mean that it is too dangerous for young children to play outside, with tree branches – still full of leaves – breaking off under the weight of the snow.  And heat soaring above 100 degrees can be hazardous to those with no means of cooling off.

Americans are sharing their stories. Users are taking advantage of social media platforms to document and share content regarding climate change and its impact on natural disasters and extreme weather events.  Pinterest, in particular, has emerged as a compelling visual platform to share images, infographics and stories about climate change and weather-related events.


Moreover, nonprofits are also facilitating users to share their stories.  Recently, for example, 350.org launched its global “Connect the Dots” campaign to motivate users to document and share images and stories about local climate change impact across the globe.


Americans are seeking out experts.  The Yale/George Mason survey indicated that 58 percent of Americans want to hear more from their TV weather forecaster about climate change.

Yet today, such trusted experts are largely silent on the issue. Sixty-nine percent of Americans indicate that their weather forecaster never or rarely ever (1-2 times over the past 12 months) mentions climate change.  This is consistent with an estimated 72-90 percent drop in climate change coverage across evening and Sunday news programs between 2009 and 2011.

In the absence of regular reporting, Americans are going elsewhere for information. For example, a recent CNN interview with Bill Nye the Science Guy making the connection between wildfires and climate change has nearly a half million views on YouTube.

As the effects of climate change hit home, consumers will become more attuned to corporate efforts addressing the matter. Over time, they’ll indicate brand preference as well. Companies should take this into account when considering future commitments to more sustainable actions.


Reframing Ancestral Traits To Be Green

June 21, 2012

Certain human behaviors today reflect hardwired traits that helped our ancestors and their kin over time. Such behaviors provide individual benefit, yet the collective impact of such actions can be detrimental to the environment, creating a situation not unlike the Tragedy of the Commons.

Unfortunately, for green marketers, such individual behaviors are not easily influenced, creating an ever-present headwind that they must contend with. Confronting such behavior directly, such as asking individuals to make different choices because current ones are detrimental to the environment, has not proven very successful for marketers.

Instead, Vladas Griskevicius, Stephanie Cantú and Mark Van Vugt, in a recent paper published in the Journal of Public Policy and Marketing, suggest that there are alternative ways to shape such behaviors: Motivate individuals to take more pro-social (and therefore, more eco-friendly) actions by reframing them as having “evolutionary selfish” benefits.

Based on Griskevicius et al., there are at least three social motivations that will drive individuals to alter their behavior in a more pro-environmental way.

Social obligation. One ancestral trait that marketers must confront is that individuals promote self interest – or the interest of their kin – over others. Importantly, Griskevicius et al. note that this wasn’t always the case. For example, it is well documented that clans hunted together, generating mutual benefit. For marketers, this provides a window of understanding into how similar behavioral choices can be reframed today in order for individuals to generate positive benefits from collective actions.

One way marketers have tried to motivate individuals to do so is by creating a social obligation.  Hoteliers have attempted to do so by offering to make a donation on the behalf of guests if those guests reuse their towels once during their stay. Yet, when behavioral economists tested such messaging, it did not motivate significantly different behavior than traditional messaging.

Recently, economists have tried a different approach. This time, the offer of donation was reframed not as a choice but as a fait accompli. The hotel simply informed guests that a donation had been made on their behalf in exchange for reusing towels. In this case, guests felt more obligated to reciprocate, lifting towel reuse by 26 percent (from Goldstein, Noah J.,Vladas Griskevicius, and Robert B. Cialdini (2012), “Reciprocity by Proxy: Harnessing the Power of Obligation to Foster Cooperation,” Administrative Science Quarterly, forthcoming, as cited by Griskevicius et al.). For marketers, such reframing has broader applicability when companies can afford to incentivize consumer actions, but cannot track and reward individuals for their specific behaviors.

Social recognition. Another ancestral trait is that humans strive to achieve relative (though not absolute) status. This means that humans want a certain level of wealth, power or fame in relation to those around them. Such behavior – the proverbial “keeping up with the Joneses” – is well documented. For example, neighbors of Dutch lottery ticket winners have a higher propensity to purchase new cars or renovate the exterior of their existing homes within the following six months after the winner takes home the money. Such behavior, however, can be problematic as it can lead to over consumption.

Interestingly, consumption is not the only way to display relative status. In fact, as Griskevicius et al. mention somewhat counterintuitively, status can also be achieved through competitive altruism whereby wealthy donors compete for status based on the amount donated, with public recognition for their generosity as a primary motivator.

But marketers can drive eco-friendly actions more broadly with consumers, not just with wealthy donors. The Elan Inn in Hangzhou, China, for example, rewards hotel guests for reducing their carbon impact by moderating room temperatures in summer and winter, or even bringing their own towel. Such rewards would be even more powerful if status were associated with visible perks enjoyed during a hotel stay or meaningful badges displayed on Facebook or local social networks.

Social influence. A final ancestral trait is for humans to unconsciously emulate the behavior of others. For marketers, the challenge is to redirect the behavior by holding up pro-environmental behavior to emulate. For example, as Griskevicius et al. point out, it has been demonstrated that the conservation behavior of one’s neighbors is “often the strongest predictor of [one’s] actual energy use.”

Such benchmarking against others works well as long as a majority demonstrates the desired eco-friendly behavior. But, what happens if only a few neighbors do?

Griskevicius et al. suggest that in this situation, green marketers should reframe the message to create the perception that more people do. They provide an illustration: Instead of communicating that only 5 percent of municipal residents carpool, message that 250,000 do. Reframing the message from a relative to absolute basis can create the perception that more people support the eco-friendly behavior, elevating the social influence that a campaign can actually have.

Hardwired human traits present a challenge for green marketers, as individual behaviors that benefit natural selection may collectively be detrimental to the environment. Instead of confronting them head on, marketers should reframe behaviors to be more pro-social, while ensuring that they are perceived to benefit the individual. By doing so, marketers turn headwinds more favorable.


How to Grow Consumer Attachment to Green Brands

May 10, 2012

Marketers work hard to create an emotional link between consumers and the brands those marketers promote. But that kind of attachment is not easily won and must be nurtured over time. Experts say one way to create that emotional link is by aligning a brand’s identity with the consumer’s sense of self; that is, with a person’s understanding of who they are and what they want to be.

But which sense of self are we talking about? The actual one based on how consumers perceive themselves today – or the ideal one based on who they aspire to be? Answering that question has profound implications for brands, including green brands, in terms of how they should build brand attachment with consumers.

Lucia Malär, an assistant professor of marketing at the University of Bern’s Institute of Marketing and Management, and several of her colleagues recently published an article in the Journal of Marketing that explores the relationship between the consumer’s actual and ideal sense of self. While this academic study did not directly address green brands, there are important lessons green marketers can take away from it.

According to the paper, consumers generally form greater emotional attachments with brands that align to how consumers view themselves, rather than what consumers aspire to be. For green brands this is not a trivial consideration — especially when you consider that, for many consumers, the notion of being green is a goal they aspire to.

Malär et al. identify three attributes that have a significant impact on consumer attachment: the degree of product involvement, the level of consumer self-esteem and the propensity for public self-consciousness. Here are some thoughts on how these characteristics can help green marketers better engage consumers:

Product Involvement. The paper defines product involvement as a consumer’s engagement with a product, largely determined by how relevant consumers perceive that product to be in their lives.  Malär et al. observe that highly engaged consumers have a positive emotional attachment with brands that align to their actual sense of self, while less engaged consumers have positive attachment with brands that focus on consumers’ ideal sense of self.

At the same time, it’s not necessarily true that less eco-engaged consumers will respond positively to brands aligned to their ideal self. While consumers may be aspirationally green, they simply may not be familiar with the products that can help them achieve this aspiration.

Green marketers might first need to educate consumers about green brands before those brands can become relevant in their lives. One powerful tool is to communicate a goal-driven message around green products, while showcasing their actual use by people that consumers can readily identify with. That’s what Mitsubishi did when it created a demonstration program for electric car technology in the town of Normal, Ill.

Self-Esteem. Malär et al. say consumer self-esteem is an essential part of emotional brand attachment — as consumers seek out brands that reinforce or enhance their own perceptions of self worth. This means consumers with higher self-esteem have a positive emotional attachment to brands that reinforce their actual sense of self. At the same time, consumers with lower self-esteem have positive emotional attachment with brands that enhance perceptions of their ideal sense of self.

Given the relative newness of green as a branding category, it may make sense for green marketers to interpret self-esteem as a consumer’s confidence in their ability to make greener choices that are right for them. When engaging green-confident consumers, brands might therefore want to emphasize evidence that confirms the consumer’s self view.  For example, green brands should praise consumers for taking eco-friendly actions.

In contrast, when engaging less confident consumers, a brand may want to shape the perception of what it means to be a greener product, and to actively facilitate their purchase. Such brands might want to show consumers what they could achieve with these products, and provide a roadmap for them to get to their goals.

Patagonia provides a great illustration of this through its Common Thread Initiative.   While most companies market only new products, Patagonia launched a “Buy Less” campaign — to shape consumer perceptions regarding responsible consumption: reduce, repair, reuse and recycle. The campaign reinforces its point by actively facilitating the buying and selling of lightly-worm merchandise from Patagonia through eBay.

Public Self-Consciousness. Professor Malär and her colleagues identify public self-consciousness as a consumer’s awareness of how others perceive them. People with high public self-consciousness have a positive emotional attachment to brands that focus on consumers’ actual sense of self, while those with low public self-consciousness have a positive attachment with brands that focus on consumers’ ideal sense of self.

Green marketers should take advantage of this factor by providing ways for consumers to receive public accolades for eco-friendly behavior. One way might be to embed gaming elements such as badges, points and leader boards into networked products.

Reward companies such as RecycleBank and Practically Green have already made gamification a core part of their offerings. Moreover, car companies such as Ford and Nissan have begun to incorporate similar concepts into the dashboards of their hybrid vehicles to reinforce eco-friendly driving behaviors.

Alternatively, brands can encourage the use of social media apps, like the one Opower recently launched, can enable consumers to share and compare energy savings.

It’s interesting to note that, while Malär et al. address emotional brand attachment, they do not tackle rational brand attachment. But such an attachment can be an important brand driver for consumers — especially when products have a direct and measurable impact on the environment. As such, when it comes to green products, rational brand attachment has the potential to amplify the emotional.

One emerging example of how to cultivate rational brand attachment is the Obama Administration’s Green Button initiative.  This program will provide millions of consumers with access to their energy data. It might also spark the development of innovative ways to leverage that data, in an effort to motivate consumers to reduce their energy use.

Brand marketers face considerable challenges in establishing and nurturing brand attachment. Those attachments not only require an assessment of brand identity, but also exploring the mindset of the intended consumers — that is, how they actually perceive themselves today or ideally in the future. Green marketers can take advantage of this relationship by aligning their brands to the mindset that best promotes eco-friendly behaviors by consumers.


Facebook Timeline’s Green Marketing Opportunities

November 26, 2011

Over the past few years, we have seen the web transform from a medium that facilitates information exchange to one that enables social connections and conversation.  Arguably, the recent launch of Facebook’s Timeline marks another milestone for the web, enabling a web experience more personal than ever before.

Timeline facilitates the sharing of a user’s life story – both the portion already written and the one still unfolding. It does so by transforming the current Facebook profile into an unending digital scrapbook of sorts.  Facebook reorganizes and summarizes available personal data such as likes, apps and photos into a timeline.  Users are then encouraged to fill in the gaps, especially meaningful events that predate their time on Facebook.

What makes Timeline so different is that it enables users to share their lives in an easily accessible, highly visual chronology, rather than simply post thoughts in the here and now.  A living memoir, if you will.

For green marketers, Timeline offers a unique new way to understand and connect with Facebook users, and one which they should take advantage of.  Here are a couple of ideas how:

Persistence:  Timeline organizes content in a way that enables individual posts to remain accessible, rather than disappear from view on the Facebook Wall.  Persistent access increases the value of this content – and Facebook as a channel for distributing it – by enabling it to be consumed and shared by viewers over a longer period of time.  This provides greater impetus for green marketers to motivate consumers to post about, like or share branded content on Facebook, as greater persistence means more impressions over time.

Prediction: Personal information has long been used to more effectively target users with ads.  Arguably, Timeline will enable a more in-depth view of the user mindset, revealing new targeting and messaging avenues.  Facebook has the potential to use this data not only to help green marketers find those that have demonstrated a clear affinity for green, but also to predict interest based on similar attitudes, experiences, demographics or behaviors.  This can enable green marketers to target micro-segments with more specific messaging, or even find new audiences, even those that have not yet taken action.

While Timeline is still in beta with consumers, there are expectations that Facebook will soon make Timeline functionality available for business pages.  Green brands should consider this new template for their own Facebook page as its functionality offers advantages for companies too:

Presentation: Timeline could enable new ways for businesses to present their brand online.  For example, Timeline enables a larger profile image prominently placed at the top of the page. Companies could use this space to build awareness for their brand or promote a trial offer for a new product.  Additionally, Timeline allows users to expand thumbnail images to provide a broader view of images and graphics, something for which the previous platform has limited ability to do.  This should benefit green marketers who find that their products require more explanation to drive broader adoption.

Persistence: A chronological Facebook business page would enable users ongoing access to brand information.  This should motivate green marketers to post more content on their Facebook pages such as product information, stories or even blog posts, bolstering these pages as comprehensive access points for brand content.

Timeline is an emerging platform that will enable users to have a more personal web experience.  Green marketers should take advantage of this functionality to more effectively engage consumers, as well as new capabilities as the platform evolves into the future.


Green Brand Leadership: a Fish Story

August 16, 2010

The customer is always right – so goes the mantra of every sales rep from time immemorial. But, as we know, what customers want may not be best for the planet. For some brands, this presents a dilemma: how do you satisfy consumer needs while remaining eco-responsible?

The dilemma can be quite daunting for a brand, especially if the eco-impact is caused by lifestyle choices consumers are long accustomed to. This challenge is only compounded when consumers are not yet aware that their very actions are having a detrimental effect – as no brand wants to be the bearer of bad news. Or, perhaps more challenging still, brands may find that the very behaviors and rituals that help define a brand itself turn out to perpetuate the very actions that are having a negative impact.

Whose responsibility is it to promote more sustainable consumer behaviors?

Many brands would say, it is the role of governments to regulate – and if they don’t, a corporate entity is not accountable for their failure to act. Others would say that it should be left to the discerning buyer. Should a brand itself take the lead? Some may argue yes. It is a demonstration of brand leadership, they say.

But, being out ahead of one’s customers may serve brands well only when their customers expect them to do so. Staking out a leadership position appeals to customers that want to know that they are doing good through the choices that they make.

Others may argue no. Brands sell products, not morality they might say. Worse, eco-responsible messaging may be antithetical to the experience a brand is trying to create. It is hard to enjoy pleasures guilt-free if one is constantly reminded of the impact that one is having on the planet.

But, regardless of where one nets out on this issue, one thing is clear: today, brands are increasingly left with little choice but to act – or react – whether or not their actions directly influence customer purchase decisions. Advocacy groups as well as individuals are leveraging the power of the media (and social media) to broadcast and amplify their voices to sway popular opinion.

Whether viewed as an opportunity to demonstrate leadership or take a defensive stance, it is likely that more and more brands will have to make such choices.

One example of such tension between brands and eco-decisions recently appeared in the New York Times Magazine article by Paul Greenberg, “Tuna’s End: The Fate of the Bluefin, the Oceans and Us.” (June 27, 2010), As Greenberg writes, Nobu, the internationally acclaimed sushi restaurant chain, faces a decision today over the selection of seafood that it serves.

The Atlantic Bluefin Tuna – a prized fish for sushi and sashimi – is now endangered. Continued commercial fishing may push it to extinction. Further, the timing of the BP oil spill in the Gulf likely exacerbated the situation by polluting one of two known breeding grounds in the Atlantic for these fish right as mating season was to begin.

Today, Greenpeace is pressuring Nobu – in large measure because it is a category leader – to no longer serve Bluefin to its patrons. Nobu has resisted. Nobu co-owner Richie Notar noted, “The Japanese have relied on tuna and other bounties of the sea as part of their culture and history for centuries. We are absolutely appreciative of your goals and efforts within your cause, but it goes far beyond just saying that we can just taken what all of a sudden has been declared an “endangered” species off the menu. It has to do with custom, heritage and behavior.”

Arguably, Nobu’s brand identity emanates from a careful balance of adherence to the tradition and ritual of sushi – its creation, its presentation, its consumption – and hip appeal: swanky ambiance, innovative food creations and celebrity ownership. Out of balance, the brand does not deliver on the experience consumers have come to expect.

With this balance in mind, Nobu has tried to stake out a middle ground by updating its menu with the following message: “Bluefin tuna is an environmentally threatened species. Please ask your server for an alternative”

Such a simple message informs patrons of the issue and then let’s each consumer make their own choice. Additionally, such phrasing invites a dialogue between the patron and server regarding food substitutes, though it is unclear as to how many patrons would be inclined to do so.

What Nobu has missed, however, is an opportunity to leverage this situation to evolve its brand appeal – keeping the balance between tradition and hip appeal while elevating each to the next level.

Nobu could find an alternative to Bluefin tuna and not jeopardize the brand, but arguably reinforce consumer perception of Nobu as hip and trendy. Greenberg asserts that what Nobu needs is a new substitute for tuna. As part of his research, he went searching for a Bluefin substitute and may have found one in a fish known as kahala. Arguably, Nobu is missing an opportunity to be one of the first to introduce kahala across its menus, reinforcing its trendy image.

Ironically, by introducing such a substitute, Nobu would not be breaking with tradition, but rather, returning to it, as Bluefin was not widely popular in sushi until just 30 years ago. It was nowhere to be found in sushi before 170 years ago.

Thus, shifting away from Bluefin and offering consumers a tasty substitute could actually enhance Nobu’s reputation for seeding new trends while maintaining close adherence to the tradition of sushi.

In this case, what is good for the brand may actually be good for the planet.


Eco-labels Impact Consumer Behavior

May 24, 2008

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.


Shopping for Green Online

March 4, 2008

An Interview with thepurplebook Founder Hillary Mendelsohn

With the exception of a few select product categories, growing consumer interest in green has not yet translated into substantive changes in purchase behavior by mainstream consumers.  Like many nascent categories, green faces many barriers to widespread adoption. 

In many ways, product adoption in the green space is a classic chicken and an egg problem: uncertain demand leads manufactures to limit the number of products they launch.  Limited products and product choice, in turn, curtails demand.  However, this only tells half the story as there are many reasons why demand is limited. 

Even with those receptive to a green message, marketers are challenged by low familiarity with green products.  This, in turn, hampers consumers from effectively navigating the category as well as making informed purchase decisions.   

Where do consumers turn for credible information today?  Product companies?  Not necessarily, as consumers are increasingly skeptical about green marketing claims.  Fellow consumers?  Uncertain, as their peers are likely to have equally limited experience with green products.  

Can consumers rely on standards?   Perhaps.  Standards have been adopted in certain categories and many more are on the way.  Yet, rollout of new standards takes time; familiarity with what existing ones mean (i.e., how green is green?) is still limited.    

Instead, consumers today may turn to credible third party sources for guidance.  One such source is the recently launched thepurplebook green, a complete guide to green shopping online.  With an extended following already, thepurplebook series enters the green market with significant brand awareness…and credibility as a reliable source for online shopping information.  Indeed, just weeks after launch, thepurplebook green is planning a second printing.

thepurplebook_image.gif

Recently, I had the opportunity to speak with thepurplebook Founder Hillary Mendelsohn.  We discussed growing consumer interest in the environment, the role that purchases play for consumers to express their convictions on green and the role that thepurplebook green plays in facilitating green purchases.  Here is what she had to say: 

MG: Does consumer concern for the environment translate into increased purchase of green products? 

HM: Purchasing power holds two powerful acts for the consumer.  First, purchasing green allows the consumer to feel better about his/her choices and particularly for personal care products, food and household items there are positive health-oriented reasons  to make such purchases.   

Second, other than voting, this is the consumer’s strongest voice to the corporations at large.  Purchasing green holds corporate America more accountable for creating green options, and ultimately having greener practices internally. 

For both of these reasons, the ‘voice’ that purchasing green gives the consumer has and will continue to increase the sales volume of green products. 

MG: What types of green products do consumers purchase?   

HM: Consumers are purchasing based on their lifestyles.  Young families are focused on greener/healthier cleaning, food and personal care items.  Older consumers are building or remodeling green.  The overall theme is that people are beginning to care about shopping more responsibly and are looking for ways to make better choices.   

It is the job of thepurplebook green and those of us that care about this concern to point them in the right direction. 

MG: Are consumers purchasing green products or brown products that are now greener? 

HM: The answer is both.  But the victory lies in the fact that they are making the effort to make better choices.  We must educate, create standards and make sure products do not lack in quality, style or cost too much.  If we can show consumers that they do not have to compromise on quality, taste or price, we can have everyone purchasing green. 

MG: What was the origin of the book?  Did it evolve out of a passion for green or a business opportunity similar to your other books or a little of both? 

HM: I knew very little about being green prior to starting this book.  I was happily writing online shopping guides when one evening, a friend invited me to see a screening of An Inconvenient Truth.  I sat in the darkened theater thinking about how I had contributed to this huge problem, and the legacy my children will inherit.   

Then I thought, if I were to become part of the solution instead, what would that look like?  Being an online shopping expert, I went to the web to see what I could find as far as earth-friendly fare was concerned.  It was slim pickings and hard to find anything at all. 

I thought, if I apply my skill set and focus exclusively on green product, I will educate myself, and create a book that might help make being green easier for others.  That said, I am a business professional, and what I have discovered, is that green makes sense and makes money – they are not mutually exclusive.   

I do hope this book is wildly successful, as that will mean people are adopting change and I have done my part. 

MG: Who is your target audience?  What beliefs do they hold about the environment?  What are their demographics?  Are they consistent with their behavior? 

HM: The beauty of this book is that it is meant for the eco-neophyte as well as the eco-savvy.  There is education and information for those who want to learn more and great resources for those who already know why they are making  better choices but can’t find the product.  There isn’t a demographic, but rather those wanting a greener lifestyle.   

The idea isn’t to exclude anyone, but to include everyone open to making greener choices whether it is their first or someone who lives dedicated to the greenest lifestyle possible.  This is doable for everyone.  The more we encourage choice and change, the more people will adopt greener lifestyle habits. 

Consistency lies within the consumer having good experiences with green products.  Once they have found good products, they do stick with them. 

MG: How should merchants approach you for inclusion in the book?  What is the criteria for inclusion? 

HM: Any merchants who wish to be considered for inclusion in thepurplebook Green, can log on to www.thepurplebook.com and submit their site for inclusion.   

Our criteria includes the following:  You must be able to complete the transaction online using a secure server, the site must be reasonable to navigate, customer service policies must be clearly stated and fair and a phone number is required for all sites. 

MG: How do you determine how green a company is?  Do you use a ratings system?  

HM: We have familiarized ourselves with all of the certifications currently used and have tried to glean a working knowledge of what is and isn’t green.   If we have questions, we contact the site and we do our very best to deliver consistent, quality information to our consumers. 

If we question it, or a site is not completely green but has a substantial green offering, we let the consumer know that too.  We are all trying to just to do better than we were yesterday, and need to keep that in mind and not judge too harshly. 

This is a relatively new area and we all have much to learn.  No one knows it all – yet.  All of the sites listed in the book are exceptional or they would not be there; however, we do make a special acknowledgement for those sites that also package and ship green.


Greening Consumption

November 14, 2007

An Interview with Michel Gelobter, Founder and EVP of Cooler

Long-time environmental activist Paul Hawkins once described “green consumerism” as an oxymoron.  Indeed, “green consumption” makes Wikipedia’s “List of Genuine Oxymora”.   The reason: consumption by its very nature has an impact on the environment – to some degree or another – and therefore, is hard to call truly green.

 

Yet, short of reducing consumption, many consumers, manufacturers and retailers are focusing on greener consumption – a term which implies shifting to products and services that have a lower environmental impact, though in many cases, not specifying by how much.

 

Today, there are positive signs that demand for greener products is increasing sharply.  In fact, the Natural Marketing Institute reports that the $200+ billion Lifestyles of Health and Sustainability (LOHAS) market is expected to double by 2010 and quadruple by 2015.  

There are many online retailers and content sites that offer green products directly or simply help consumers navigate the market.  They include three primary categories:

Green online retailers: Many online retailers have emerged that are dedicated to serving the green market including Buy Green, Earth Friendly Goods, Eco ChoicesEcoWise, Gaiam, Green Feet, Green Home, Green Shop (UK), Green Shopper, Green Shopping (UK), Green Store, Indigenous, Natural Collection (UK), Nigel’s Eco Store (UK), Rogue Natural Living, Shop Green (PriceGrabber), The Green Office and VivaTerra among others.

General online retailers. Several general merchandisers and portals have embedded a green section into their existing offering, including Amazon and MSN among others.

Green directories: Finally, other online sites have positioned themselves as green directories, product search engines and shopping guides.  Sites include EcoBusinessLink, EcoMall, EcoSeek, Evolvist, Evolve Shopping, Green Deals Daily, Great Green Goods (blog), Green People, Green Providers Directory (UK), Green Shopping Guide (UK), Guide Me Green (UK), Haute*Nature (blog) National Green Pages, Pristine Planet, and TheFindGreen among others.  Perhaps the most comprehensive guide to online eco-friendly shopping is published by thepurplebook

Yet, despite this growth rate, LOHAS spending is still a drop in the budget when it comes to US consumer buying power – estimated at more that $10 trillion in 2007.  As such, the greater challenge is to shift spending on mainstream products to greener ones and do so in a way that also provides the incentive for mainstream manufacturers to reduce the carbon footprint of their products over time.

There are many ways to motivate the purchase of greener products across the purchase funnel.  Here are a few examples:

Make existing products greener.  Product companies have the opportunity to green their products – including sourcing, use and disposal.  Greening a product in the first place, of course, is the best way to reduce its environmental footprint.  Companies are motivated to do so for a variety of reasons including increased consumer demand, pressure from partners across the supply chain and risk to the brand simply by being complacent.

One of the best examples is Wal-Mart.  For example, it has identified $10 billion in potential savings simply by decreasing product packaging.  It has also required its suppliers to reduce the environmental impact of the products that it sells (eg, more concentrated laundry detergent formulas reduce the use of energy for transportation) while expanding the market for others (eg, by selling fluorescent bulbs at lower cost under its own private label). 

Due perhaps, in part, to Wal-Mart’s pressure and lead, Procter & Gamble has responded with a commitment to sell $20 billion worth of greener products over the next five years.  It has also joined the Supply Chain Leadership Coalition, an industry organization that pressures suppliers to publish information on carbon emissions, to help it reduce the impact of its suppliers as well.

 

Motivate greener choices.  Product companies and retailers can influence behavior by interjecting green as a considered attribute in the purchase decision.  There are several ways to do so including the use of eco-labels, ratings, promotional benefits or green rewards tied to a loyalty program.  Eco-labels and ratings impact consumer purchase decisions by providing relevant environmental information at the point of sale – and indirectly motivate greener product design and manufacturing decisions by making green a differentiating attribute. 

 

Today, eco-labels are actively being used or under consideration by manufacturers, (eg, HP, Dell), retailer (eg, Wal-Mart, Home Depot) and government regulators.   Moreover, several organizations have taken the lead in developing or aggregating green rating systems including Green Seal, Consumer Report’s Green Choices, the US EPA’s Energy Star and independent Better World Shopper.  Moreover, sites like Alonovo allow users to filter products based on their own green values.

 

Promotional benefits and rewards can also influence consumer purchase behavior.  Marketing Green explores both of these levers in two previous blog entries. (“Green Labels as Drivers of Consumption and Loyalty Programs”, March 19, 2007; “Testing Green Promotional Benefits to Drive Acquisition”, September 16, 2007).

 

Offset environment impact.  Today, more and more companies and consumers are turning to carbon offsets (and renewable energy credits or RECs) to mitigate the environmental impact of products manufactured or purchased.  While the offset mechanism may vary – from purchasing allowances on a carbon exchange to investing in renewable energy projects – the effect is similar: offsets reduce the carbon impact of consumption by effectively removing the equivalent amount from the environment elsewhere. 

 

While carbon offsets are not without controversy, they can be a powerful way to mitigate the impact of consumption.  There are several ways that carbon offsets are purchased today:

 

First, carbon offsets can be voluntary.  Retailers can provide options to do so – as most airline sites do today, for example – or consumers can purchase them directly from many brokers including Atmosfair (Germany) Better World Club, Carbon Fund, Carbon Leaf (UK), Carbon Zero (Canada), Climate Care, Climate Counter, Climate Friendly, ClimatMundi, CO2 Balance, My Climate, Native Energy, Offset Carbon Company (UK), Offsetters (Canada), Solar Electric Light Fund, Sustainable Travel International, Target Neutral (UK), Terrapass, The Carbon Neutral Company, TreeBanking, and Uniglobe Travel among others. 

Typically, retailers play no more than a passive role in facilitating carbon offset purchases by providing the mechanism to do so on their site.  In many cases, it is no more than an additional option available during the check-out process.  The case of Virgin Atlantic is different, however; in response to low voluntary purchases, Virgin is now actively selling carbon offsets to customers while in-flight.  Sunvil Holidays (UK) goes one step further by putting the burden on the consumer to opt-out of - rather than opt-in to - purchasing a carbon offset by embedding it directly into the cost of its vacation packages. 

Second, carbon offsets can be structured into the transaction itself – treated as a promotional expense, embedded in the purchase price or covered as part of the transaction fee.  Companies as diverse as insurance giant Allstate, UK’s Silver Jet and Fiji Water are making their products carbon natural (or even carbon negative) as a way to differentiate their offering.  In this case the product company is absorbing the cost directly or raising its price to cover the added expense. (Interestingly, Allstate is offering to offset the carbon emissions from the automobiles that it insures).

 

Alternatively, credit card transaction fees can be used to offset carbon emissions as well.  Recently, issuers including Barclays, GE, MetaBank, Triodos Bank and Wells Fargo have launched green cards while Bank of America and upstart Brighter Planet have announced their intentions to do so.  These cards divert a portion of their fees to mitigate the impact of the products purchased through a donation to a non-profit organization or direct purchase of carbon offsets. 

 

Such card programs have advantages and disadvantages.  Given their reach, credit cards can green a significant amount of consumer spending simply by providing the incentive to consumers to make their purchases on a card with green benefits.  Yet, to do so, cardholders must trade in personal benefits earned from traditional reward programs (eg, airline miles) for ones that provide more societal benefits.

 

Alternatively, a promising, new retail model has emerged that divert a portion of revenues earned through affiliate marketing programs to pay to offset the carbon from products purchased.  In doing so, sites such as Cooler and Earth Moment enable consumers to purchase products from traditional retailers while offsetting the carbon impact of these purchase in the process.  Such a model is compelling to consumers as, from their perspective, the cost of the carbon offset is absorbed by the retailer and they can green their purchases while using their existing credit cards. 

 

While numerous companies are involved in carbon offsetting, Cooler has clearly been one of the most innovative players in the space.  Distributing 8 million products from 400 retailers, Cooler provides consumers with the largest selection of products that can be purchased with an embedded carbon offset.

 

Recently, I had the opportunity of sitting down with Michel Gelobter, Founder and Executive Vice-President at Cooler.  We discussed the recent launch of his company, its B2B and B2C offerings and the challenges that we all face in greening consumption.  Here are his words:

Marketing Green:  By offsetting the carbon impact of products purchased, Climate Cooler has the potential to change the game in the online retail space.  What was the impetus for starting the company? 

Cooler:  We wanted to find ways to create the momentum in the consumer space for taking action on climate change.  That exploration led to what has now become Cooler.  Cooler is distinguished by being the first site where you can purchase practically anything you can buy on the Internet – except for maybe a plane ticket – in a way that eliminates the global warming impact through the point of sale.   

Our mission as a company is to connect every purchase with a solution for global warming.  We do that with three offerings.  The first is that we use the country’s only product and service carbon calculator that was developed jointly by Carnegie Mellon and Berkeley.   

MG: Does it calculate the entire impact of the product, that is, how it is manufactured, used and disposed of? 

C: It is just to the point of sale: how it is manufactured and transported.  But, the innovative piece is that it adds the retail component which ranges usually from 20-30% of a product’s carbon footprint. 

MG: How about shipping? 

C: Yeah, it includes that too.  But [the environmental impact] tends to be much lower which can be a surprise to our customer base. 

The second piece of this offering is our basket of carbon offsets or pollution prevention and renewable investments that have been unanimously approved by the world’s best environmental organizations.  And finally, we set out to create a basis on which consumers could take action in a way that was trusted and transparent.  And that is what Cooler is about.   

We also give people a way to track their impact and start thinking about carbon budgeting.  We already have the My Impact page which tells [consumers] what they are emitting.  After all, 40% of the average American’s carbon footprint is in consumption of goods and services.  

MG: So do you view part of the value that you bring is educating consumers on their true environmental impact? 

C: In the consumer space, absolutely.   

The bigger piece of the business is really the B2B offering.  Companies started coming to us and saying: “How can I put your works into my gears so when people come to my website – or bricks and mortar store – they can get a carbon neutral product.”

Our B2B offering is called Cooler Compete which is basically a way for companies to know, offset and reduce the global warming impact of the products that they sell.  And the difference is that those companies are going to make a choice about who pays for [the offset].  We think that most of our business customers are going to absorb the costs of carbon neutrality. 

MG: What services are you providing in the B2B space? 

C: First, we are providing the [carbon emission] calculation.  Our calculator is really revolutionary.  We are using a method that is, on average, more accurate [than existing calculators].  It is based on an approach called economic input/output analysis, whereby we calculate the footprint of a product directly through the economy.  Instead of looking at a shoe and saying “where did that leather come from?”, we say “how much of the leather industry did this company use?”.   

Peer-reviewed studies show that this method is, on average, more [inclusive] from an environmental perspective because it includes more of the carbon footprint than [other] analysis. 

The second service is really a reduction service, that is, a list of the top contributors to your carbon impact.  That is usually enough to motivate companies to bench mark against those numbers and reduce their impact.  

Finally, companies buy offsets with us.  We don’t actually make any profit from our offsets – we pass the costs directly through.  But our basket of offsets is very high quality.  

MG: You are ambitious in trying to serve two different audiences with very distinct offerings. 

C: Yes, but the website in some sense can be seen as a technology showcase.  The web site gives [companies] the sense like “Oh, this is what it could look like.”  So that is why the website is really critical.   

MG: In your B2C work, who is the typical customer that you are targeting? 

C: We are partnering with environmental organizations so our early go-to-market strategy is [targeting] the members of our partner organizations.  Now we are trying to move from the environmental group members to more of the LOHAS crowd.  Over time, we will target a broader and broader swath of the American public as more people become conscious of this issue. 

MG: How important is viral to your marketing strategy?

C: Viral would be great.  Right now, we are honing our technology platform to make that more potent.  For example, when you tell a friend, we are able to report back to you how much your friends offset.  We can also have people compete to see who is more carbon neutral.   

MG: How does the B2C business model work?  Is it an affiliate model? 

C: It is.  On average, if we refer someone [to an online retailer that subsequently makes a purchase], we get 6% [of the total sale].  The cost of the [carbon] offset ranges from 0.7 to 1.5% and we keep the rest for the business. 

MG: Are there plans to offset carbon emissions from the use and disposal of the products that you sell? CC: We do not have any plans to address that now. MG: How receptive are consumers today to carbon offsets? 

C:  I think we are easily 10 to 20 years out from having a stable, trustworthy, well-defined commodity market for offsets.  One of the reasons we partnered with the environmental groups is to give consumers assurances that at any moment in time, the best decisions are being made.  

MG: Do you think offsets take on more meaning when the US market moves from a voluntary to a mandated cap and trade system? 

C: No. I think personally that people need to take action now.  Our offsets are additional so they are already above and beyond everything done today.  We follow three criteria that are summarized as follows: real, additional and positive. 

“Real” means that we are taking carbon out of the atmosphere when you buy something.  We are not just meeting the next increment of energy demand with cleaner energy.  We’re actually capturing or reducing an emission somewhere else in the world, hopefully in the United States.   

“Additional” means that this would not have happened where it not for your purchase.   And “positive” means doing more for the world than just helping the climate.  It means helping to create jobs or generate more environmental protection or biodiversity. 

It is going to be a long time before governments are actually cutting emissions by 80%; by 2050, unfortunately.  Until that time and maybe well beyond it, we want to be the place where consumers can know that by acting their doing their part above and beyond what government is doing.  

MG: It is conceivable that your success could provide incentive for others to enter the market and that one day, offsets will simply be a threshold to compete? 

C: Of course, we would love it as a company and a social event if this became a must have.  And we are going to do our best to make sure that happens.  That is one of the reasons why we started the company. 

MG: Will this actually help solve global warming? 

C: I absolutely think it’s a huge part of the solution.  We can not be paralyzed by the fact that shopping and consumption is part of the problem.  We have to go in and fix it.  People have been trading goods for money for a long time and the system’s broken.  And climate change is actually a huge archetype for a wide range of ways to reknit the fabric of shopping with the fabric of community and earth care.


Defining Green Brand Leadership

October 29, 2007

“We will not be measured by our aspirations.  We will be measured by our actions”                   

– Wal-Mart CEO Lee Scott in making sustainability part of his core strategy

Great brands today understand that return on investment (ROI) using hard dollars is not sufficient to assess the overall impact of environmental initiatives.  Today, social norms regarding the environment are changing and consumers are increasingly holding brands accountable for what they do (and don’t do) rather than just what they say.  As a result, more and more companies are making investment decisions that incorporate brand impact and brand risk into their equations. 

Wikipedia defines brand as the “embodiment of all information connected to [a] product and serves to create associations and expectations around it.”  Though intangible, a brand may generate significant value for a company based on its ability to create differentiated experiences for consumers – and enable the company to generate and sustain future cash flows as a result. 

One way to view a brand is that it can enable companies to charge a premium for what may ordinarily be perceived as a commodity product.  Take for example Coca-Cola, the #1 brand based on the 2007 BusinessWeek/Interbrand survey.  According to the Brand Finance 250 annual report, Coca-Cola has the highest brand value – over $43 billion or nearly 40% of its total $110 billion enterprise value – in a highly competitive beverage market.   

While taste is indeed an important differentiator, Coca-Cola is able to charge a premium for its products – and generate significant brand value – primarily due to the strong brand loyalty of its customers. 

Increasingly, leading brand companies are recognizing that environmental issues have the potential to impact brand value – positively or negatively – and are taking action.  Coca-Cola clearly understands this and is aggressively responding with bold initiatives that are intent on shoring up its green credentials. 

For example, consumers today are less willing to accept that a plastic bottle will take 1,000 years to decompose in a landfill.  By proactively redesigning its bottle to reduce material use and pledging to recycle 100% of bottles sold in the US, Coca-Cola is clearly taking action to stay ahead of consumer brand expectations – and by doing so, defending (or perhaps enhancing) its brand value.

Does reduced material use lower production costs for Coca-Cola?  Absolutely.  Does committing to recycling 100% of its bottles help attract new customers?  Not necessarily.  Regardless, recycling bottles impacts its brand value – and ability to continue to sustain future cash flows – by strengthening connections with existing customers and mitigating potential risk to its corporate reputation as a result of negative PR.

Today, many leading brands like Coca-Cola are responding to consumer concerns about the environment by making investments that strengthen or shore up brand value.  Marketing Green believes that there are five actions that define green brand leaders. These five actions need to be considered by companies looking to green their brands: 

Be accountable.  Companies should acknowledge that environmental issues such as climate change are real and that, despite good intentions, they are part of the problem (and can be part of the solution). At this point, businesses are likely to alienate few consumers with such a statement and can begin to attract the growing group of consumers looking for green brand leadership.    

Additionally, businesses should audit their own operations and the lifecycle of their products – including sourcing, use and disposal – to determine their environmental impact and track these metrics over time. Indeed accountability, now considered one of the top pillars of successful marketing communications, cannot be underestimated when it comes to the environmental space.

Consumers are becoming increasingly savvy and increasingly demanding when it comes to the environment.  Companies should not be shy in setting high goals for themselves when it comes to the environment; if there’s any time to admit the future needs to be different than the past, it’s now.  

Be transparent.  More and more, leading brands are providing public disclosures of their environmental and social impact.  Today, in fact, 43 of the top 100 brands – including 12 of the top 15 – make public disclosures based on sustainability guidelines set by the Global Reporting Initiative. 

This reporting framework – first proposed by Boston-based non-profit CERES, endorsed by the United Nations Environmental Programme and supported by a consortium of leading brands including Alcan, BP, Ford, GM, Microsoft, RBC Financial and Shell – has become the de facto standard for environmental and social reporting globally.  Currently, more than 1,250 companies in over 60 countries are making disclosures using this framework. 

Another way that companies are demonstrating transparency is through partnerships with non-governmental organizations (NGOs) such as the National Resource Defense Council and Environmental Defense (ED).  NGOs provide credibility for a company because consumers view them as industry watch dogs. 

Certainly, one of the best partnership examples is the one forged between Wal-Mart and ED to make Wal-Mart’s operations and supply chain more sustainable.  In effect, Wal-Mart – not ranked in the BusinessWeek/Interbrand survey because it operates internationally under different brand names – has turned to a respected NGO to endorse its environmental efforts. 

This partnership hold such promise that ED announced last year that it was adding a staff position in Bentonville, AR in order to coordinate ongoing work with the retail giant.

Be credible.  Today, consumers are skeptical; too many companies have tried to green wash hollow environmental efforts.  As such, companies must work hard to build credibility and earn consumer trust over time.   

One way for a company to do so is to first green its internal operations, followed by its products and services, and then its marketing communications.  This way, companies ensure that they take responsibility for their own actions before encouraging consumers to do so with their products or through their messaging. 

But this is not the only way to gain credibility with consumers.  Companies like Toyota (# 6 ranked brand) started by greening its products (eg, hybrids) first.  The risk for a company, however, is that over time its own product enthusiasts are likely to challenge how the product is made.  In the case of Toyota, hybrid owners are now pressuring it to green its operations and manufacturing facilities and Toyota is taking action, according to Marjorie Schussel, National Manager of Corporate Communications, at the recent Green Conference sponsored by Ad Age. 

In contrast, Dell (#31 ranked brand, in contrast to #3 IBM and Dell archrival #12 ranked HP) started with its marketing communications first, declaring that it was going to be the greenest IT company on earth.  In doing so, it essentially admitted that its operations and products were not green yet but that it had every intention to make them green over time.  To help facilitate this transformation, Dell created a site called IdeaStorm to solicit input from its customers on ways by which it could go green. 

Be an enabler.  Leading brands should recognize that consumer expectations have changed.  It is not enough for a company to green its products; consumers expect the products that they purchase to help reduce the environmental impact in their own lives too. 

Recent research by Umbria, a marketing intelligence company, supports this.  Averill Doering, a consumer research analyst with Umbria, made the following observation: “[Consumers] see the [environmental] problem. They want to do something about it.  And, they want the companies they buy from to help them do it.” 

Such consumer expectations raise the bar and imply that consumers may hold companies responsible for the environmental impact of the products that they buy – across the entire lifecycle.  Consumers may increasingly care not just about product sourcing, but about its use and disposal too.  The emergence of eco-labels may serve to reinforce these consumer expectations as they will provide consumers with the necessary information to make greener choices by comparison shopping.  

Leading brands only need to witness the growth in hybrid sales – 49% during the first seven months of 2007 over the same period in 2006 – to recognize that consumers are actively seeking products that enable them to be greener.  Today, every major automobile company is following suit and is accelerating development and commercialization of greener automobiles. 

Be visionary. Visionaries are willing to make bold decisions that redefine their strategy or reshape industry dynamics.  Today, there are many emerging green visionaries.  Among them is Wal-Mart. 

In June of 2004, a pivotal meeting took place between CEO Lee Scott, Rob Walton, Board member and son of the late founder, and Peter Seligmann, Co-founder and CEO of Conservation International.  Walton and Seligmann were friends and had often discussed the potential impact that Wal-Mart could have as the largest global retailer if it were to change the way it did business.   

The pitch to Scott: Wal-Mart had long been criticized for its labor practices, employee health benefits and environmental record.  Given its buying power as the world’s largest retailer, Wal-Mart was in a unique position to affect change in the retail space and do so in a way that would greatly reduce its impact on the environment while saving money, growing revenue and positively impacting its brand image. 

Over time, Scott has essentially turned this pitch into Wal-Mart’s modus operandi.  Not only did Scott set ambitious goals regarding sustainability – 100% renewable energy, zero waste, products that sustain our resources and environment – but he has made it a central component of his strategy and brand positioning.   

Wal-Mart first demonstrated the demand for more sustainable products when it began selling organic cotton yoga outfits through Sam’s Club: 190K sold in less than 10 weeks. This year, Wal-Mart challenged itself to sell 100MM compact fluorescent light bulbs (CFLs) and has already surpassed that goal.  To do so, it combined its marketing muscle to heavily advertise the CFLs in its stores, and purchasing clout to be able to drive down the cost substantially over just one year ago. 

Moreover, Wal-Mart is intent on making its suppliers more sustainable.  Earlier this year, Wal-Mart launched Sustainability 360º, a program intended to enlist its employees, suppliers, customers and local communities to help reduce environmental impact.  This month Scott hosted a Sustainability Summit to connect Wal-Mart suppliers with vendors that could help them become more sustainable.  

Finally, Wal-Mart has expanded its brand positioning to include not just its long time low cost promise, but also “affordable, sustainable products that help [customers] live better every day.”  “Save Money. Live Better” is now the Wal-Mart tag line.    

Increasingly, companies recognize that environmental issues can impact brand value.  In response, leading brands are increasingly incorporating brand metrics into their evaluation criteria for green investments; they are also taking action to green their operations, products and marketing communications.   

Smart brand marketers should think twice about simply focusing on near-term green revenue and cost savings opportunities; the path for sustaining growth needs to also start with greening the brand.


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