Five Steps to Navigate Gen Z Consumers’ Demand for Sustainable Products

Posted on by Christian Jones

The world is changing. And while one can point to AI, machine learning, privacy literacy or blockchain when referring to change in the world of tech and marketing, the most impactful change will come from a massive shift in consumer behavior. Brands should not wait to witness this impending shift—they need to envision it and embrace it.

The confluence of several trends will lead to a significant paradigm shift in how Gen Z will behave as consumers:

  • The undeniable effects of climate change are now upon us. Both Gen Z and future generations will endure the effects of climate change that they do not deserve unless necessary action is taken now, and there is significant momentum pushing in that direction.
  • The urgency of climate change and the realizations surrounding it have driven a rapidly increasing demand and necessity for the sustainability of goods and services across all sectors.
  • The rise of impact investors (defined as investments made into companies, organizations and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return) will allow for more ethical, sustainable business models to take shape and compete in the marketplace.
  • The slow but continued persistence of the sharing economy, the adoption of a “rent, not own” mentality and the proliferation of on-demand, hardware-intensive services (think Lime or Bird scooters) will lead to decreased personal capital expenditures.
  • The explosion of “capacity capture” businesses such as Lyft and Airbnb point to a future where each and every resource will be utilized to its maximum capacity, not only for profitability, but also to reduce the unnecessary production of new goods.

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All of this points to a future where sustainable products are not an option, but rather a requirement for a new generation of consumers. According to Cone Communications, Gen Z will account for 40% of global consumers in 2020 and 94% of them believe that companies should address urgent social and environmental issues. As Gen Z rises in the ranks of the workforce and they increase their purchasing power, they will judge and evaluate products and services with an expansive and decisive set of criteria when deciding on a brand or making a purchase—and brands need to be ready to compete.

According to Greenmatch, 72% of Gen Z would spend more money on goods and services produced in a sustainable fashion. However, in order for your product or your service to even be part of the consideration set, the baseline requirement will be that your brand has a positive impact on the environment—and moreover, that your brand is fully committed to sustainable and ethical practices. Most companies want to participate in sustainable practices, but some do not know where to start. Here are five tactics a company can use to embrace sustainability and be competitive in the marketplace:

  1. Get certified for sustainability. Whether it’s B-CorpTRUE Zero WasteLEED, Green Business Bureau or other certifications, see what’s right for your brand.
  2. Open up. Provide visibility into your sustainability model, including, for example, your supply chain.
  3. Start small. Limit new sustainable product launches to smaller, focused audience segments; include higher price points to stress test price tolerance.
  4. Iterate. Test messaging and product options with proven, direct-to-consumer playbook tactics to better understand actual product-market fit.
  5. Be real. Don’t Greenwash. If you aren’t there, don’t spin it. Talking about how your product is eco-friendly because you source one sustainable component while the rest of it is associated with toxic practices will not fly.

Consumer behavior is always changing, of course. However, this juncture in human history is wildly different given the climate changes upon us and the effect they will have on how we use our purchasing power. The future is bright, and brands will do well by preparing for this impending shift, embracing it and taking this opportunity to have a positive impact on the world for everyone’s greater good.

Christian Jones is head of marketing at Hawthorne.

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