Going Green

The New Black

Is green the new black? More people than ever acknowledge the need to restore, preserve and improve our natural environment and greener living has seriously taken hold in the mainstream society.

The green market neatly falls into the so-called LOHAS segment – a buzzword acronym that you’ll hear a lot more of in the future and which stands for ‘Lifestyles Of Health And Sustainability’. These people value things health, fitness, the environment, personal development, sustainable living and greener living amongst other things, and last year in the US alone the segment was valued at more than $300 billion.

In Australia the figure was valued at around $12 billion by The Mobium Group, which delivers research, strategy and innovation in the markets for sustainability and wellbeing.

As these figures show, buying and living green is increasingly important for many consumers, and it has become a growing source of revenue for retailers too.

In April 2007, The Home Depot – the world’s largest home improvement retailer – acknowledged this with the introduction of the Eco Options label. This label identifies products deemed by Home Depot to have less impact on the environment than similar competing products and they are projecting that by 2009 the scheme will label around 6,000 products and account for 12 percent of sales.

However, Eco Options is not without its problems and skeptics. Ron Jarvis, one of Home Depot’s senior vice presidents looking after the program, acknowledged in an interview with the New York Times that more than 60,000 products scrambled for the right to be labelled after suppliers were invited to pitch.

“Plastic-handled paint brushes were touted as nature-friendly because they were not made of wood. Wood-handled paint brushes were promoted as better for the planet because they were not made of plastic,” stated the article.

Ultimately, around 2,500 products were initially accepted, the lack of “verifiable or certified standards to substantiate claims” (i.e. lack of proof) and the need to consider a product’s overall “environmental record over its entire life cycle” (i.e. how much energy was used in its manufacture, is it recyclable, its overall sustainability etc.) being key factors. In other words, only products with a legitimate claim to being green made the cut.

Selling Green

A common problem with selling green is that consumers often say they demand green and sustainable products, but this is not always matched by their purchasing. As mentioned previously, misleading information supplied by companies and organisations – known as ‘greenwashing’ – has also been a problem for many years and the stampede to obtain Eco Options labeling shows that it is still common.

Nonetheless, things are much better nowadays, so don’t be discouraged. Instead, think of it as a form of due diligence. In the case of Eco Options, even though a moderate amount of criticism was actually leveled at the program, sales of products bearing the label increased on average by ten percent. This suggests that independent third party certification and labels that are free of similar criticism can potentially carry a lot of weight. In short, done properly and ethically, the green dollar for retailers is a genuine opportunity to add value.

The Green Customer

Green customers are still in the minority, but they are growing. Unlike just a few years ago, most consumers today are also much better informed when it comes to sustainability, energy ratings, grey water and so forth. When it comes to selling green it therefore pays to find out what a customer’s environmental inclinations are.

A retailer interviewed for this article said that his staff always discretely discusses green options with customers. They found that while most customers do not have heavy environmental inclinations, those that did were happy to spend more on obtaining the greenest products they could get their hands on. These customers know what they are looking for and are less concerned about price. It goes without saying that staff needed appropriate product knowledge and training in order to satisfy them.

As for non green die-hards, price and performance as you might expect are key, although products promoted as green were found to have an edge if they were sufficiently competitive. In other words, consumers tend to purchase the greener product over the non-green one if it offered comparable cost and performance. There is also evidence to suggest that Australians are prepared to pay a small premium for greener products, especially if there is an obvious long term and sustainable benefit.

Finally, as mentioned previously, reputable and recognizable third party certification is also growing in importance. Genuine labels and certificates are a way of proving a product’s green credentials because they are an ‘endorsement’ against greenwashing. A recent report by environmental marketing company TerraChoice titled “The Six Sins of Greenwashing” caused quite a stir when it reported that a worrying proportion of randomly surveyed consumer products claiming to be green were either misleading or did not live up to their claims. It is for this reason that more consumers are accepting third party labels and certificates which is why they are so important.