There is no such thing as “the” sustainable consumer

Welcome to the second edition of our biweekly newsletter The Demand Revolution.?

The purpose of this newsletter is to share insights into creating and implementing growth strategies for sustainability after decades of false starts and incremental change.

One of those false starts, as we mentioned in the first edition, builds on the blanket assumption that there are only two segments of consumers: those who are willing to pay a premium for sustainable goods or services, and those who aren’t.

That would imply that there is a singular “sustainable consumer.” This mythical person is often caricatured in a condescending way as a sandal-wearing, tree-hugging, bicycle-riding vegan. They comprise a segment that is too small to justify heavy investments in sustainable products. Why should a business aim for scale when the size of the market won’t justify it, right?

The reality is that there are much larger and more lucrative markets available to companies that gain a deeper and more nuanced understanding of consumers and how sustainability affects their lives. When companies stop viewing consumers through a one-size-fits-all lens, they can start to develop differentiated solutions based on consumer needs, values, and perceptions. That is the path that justifies heavy investments aimed at attracting a critical mass of consumers.

Our extensive research over the last three years has revealed that for most consumers, sustainability has some influence over their lifestyle choices and their purchase decisions. This influence is not uniform, neither in its intensity nor in its extent. Consumers differ in how they make tradeoffs across price, brand, quality, and sustainability. They differ in how they perceive the strongest barriers to buying a sustainable solution, which are affordability, access, knowledge, and trust. Each of these differences and nuances creates opportunities for businesses to capitalize on by developing and marketing sustainable solutions.

Introducing the eight consumer archetypes

The answer to the question “what do consumers want?" is multifaceted and involves listening to their different views, interpreting their actions, and exploring their motivations and their barriers. Our research and analysis have revealed eight archetypical consumers. In contrast, the green mirage assumes that there is only one “sustainable” consumer (a small segment) and a vast majority of consumers who don’t care.

Those two groups exist in our segmentation as well and we call them Champions and Non-Believers. The important difference, however, is that in our segmentation, they make up less than a quarter of the population, not the entire population. The Champions are fully committed to sustainability and are willing to pay premium prices to support that lifestyle, but they make up only 8% of consumers. The question of paying a premium is moot for Non-Believers, because they do not view sustainability as an influential or important criterion in any purchasing situation. Yet they comprise only 15% of consumers.

In other words, the green mirage defines the market for sustainable solutions too narrowly It’s time to look at the remaining 77% of consumers and understand what they want and how they differ. The figure below introduces all eight archetypes that we found in our research, with their share of the consumer population in parentheses.

The frustrations of poor communication, lack of information, and lack of and trust affect all archetypes similarly. But those aren’t their biggest barriers to adopting sustainable solutions. The Image Driven, Thoughtfuls, and Selectives have their biggest challenges with access, which means they often struggle to find what they want or need. Affordability is the largest barrier for the Planet Savers, Cost Conscious, and Skeptics.

It’s time for businesses to tap these opportunities

The six additional archetypes define a broader and more diverse market for sustainable solutions. They give companies a greater range of strategic options to bring lucrative solutions to market at scale as the emerging megatrend of sustainability unfolds. Instead of investing in niche products in the hopes of attracting a few Champions, companies can now target a mix of segments, reduce the barriers to access or affordability as needed, and do a clearer job of communicating how their solutions offer the right tradeoffs across price, quality, brand, and sustainability.

Please click here to pre-order your copy of The Demand Revolution: How Consumers Are Redefining Sustainability and Transforming the Future of Business. The book is scheduled for publication by MIT Press on October 8.