Consumers are Willing to Pay More for Sustainable Brands
The objective of this research was to explore consumer perceptions of the relationship between corporations and sustainability, to understand which are the factors that create the impression of a sustainable brand.
To understand what impact sustainability has on brand value, brand health experts Nepa interviewed 970 UK consumers about 67 leading brands in 8 different categories (Food and beverage, FMCG, beauty, gambling, kitchen interior, luxury, quick service restaurants).
People are conscious of brands’ efforts towards sustainability, and according to our findings, they are willing to pay more for a company that shows commitment to this cause.
Here at Nepa we used a method that evaluates the maximum price a consumer is willing to pay for a product or service. The research found that brands that are perceived as sustainable will see an average increase of 34% in Willingness to Pay (WTP).
This relationship between WTP and a brand’s contribution to a sustainable future is there regardless of industry. Although it does vary, with a 29% increase for skincare/haircare brands, 33% for food, and over 40% for luxury and spirits companies. Brands that want to add value need to speak up about their efforts towards sustainability. And they need to do it right.
Brands need to approach consumers using a human tone of voice to make an emotional connection. Communicating genuinely honest intentions is more important than talking about actual achievements in a self-righteous way.
Brands need to be perceived as inclusive and down to earth. The expert position is not enough when talking about sustainability. It doesn’t create a strong emotional connection with people.
65% of people feel it’s important to adapt to a sustainable lifestyle. We asked consumers which issues - local and global - they believe companies must engage in to earn the “sustainable” label.
The issues that consumers perceive as most relevant to credibly claim sustainability are classic “green” issues. Two-thirds of consumers believe that companies need to use sustainable energy sources to be credible; and 59% expecting brands to engage in the fight against climate change.
This focus on the future of the planet was prioritised over socio-economic issues such as health and wellbeing, equal rights and decent working conditions.
Overall, communicating sustainability effectively is a delicate balance but one worth investing in - as this research demonstrates getting it right will add to your brand value as well as help save the planet. At Nepa we are convinced the new decade will see sustainability going from a nice-to-have, purposeful afterthought to being essential for future brand growth.