An ever-increasing number of consumers around the world are willing to pay more for sustainable brands, according to research by Nielsen, making it an essential strategy element to any business aiming for future growth.
Over 30,000 consumers in 60 countries were polled about their purchasing behaviour with 66 per cent of them prepared to pay more for sustainable brands—an 11% increase from the previous year.
This upward trend is expected to continue as Millennials, one of the largest generations in history, are about to move into their prime spending years. 73 per cent of them are willing to pay extra for sustainable offerings—up from 50 per cent in 2014.
“Sustainability is a worldwide concern that continues to gain momentum—especially in countries where growing populations are putting additional stress on the environment,” says Grace Farraj, senior vice president, Public Development & Sustainability, Nielsen. “An increasing number of consumers in developed regions consider sustainability actions more of an imperative than a value-add.”
Brand trust is a key sustainability factor that will influence almost two-thirds of global consumers.
“This indicates an opportunity for consumer-goods’ brands that have already built a high level of trust with consumers to evaluate where best to introduce sustainable products into the market to drive growth,” says Carol Gstalder, senior vice president, Reputation & Public Relations Solutions, Nielsen. “On the flip side, large global consumer-goods’ brands that ignore sustainability increase reputational and business risk. This may give competitors of all sizes, the opportunity to build trust with the predominantly young, socially- conscious consumer looking for products that align with their values.”
Nielsen’s research also found that 66 percent of consumers were willing to pay more for sustainable goods in comparison to 50 percent in 2013.
This behaviour isn’t just limited to the wealthy in big economies. In fact, consumers earning $20,000 per annum or less are actually 5 per cent more willing than those with incomes greater than $50,000 p.a. to pay more for products and services from companies with a commitment to sustainability.
A testing economic climate has left the Millennials (born between 1980-2000) undeterred about the cost of paying extra for sustainable offerings, rising to 73 per cent from 50 per cent in 2014.
Under 20s, or Generation Z as they are also known, are demonstrating equal determination to align their pennies with their values. 72 per cent would spend their income with companies who were committed to sustainability, and increase from the 55 percent polled in 2014.
The Millennials and Generation Z are set to dominate spending in the years to come making an alignment with their values at the earliest opportunity a sound investment for the future.
1) This article was compiled using Nielsen’s 2015 Global Corporate Sustainability Report. For the sake of readability, we did not use brackets or ellipses but made sure that the extra or missing words did not change the Report’s meaning. If you would like to quote these written sources from the original please revert to the link below: