Trends in Corporate Sustainability Strategies to address Climate Change. Out of the bag thinking on climate change: What is the impact of recyclable shopping bags when environmentally friendly packaging isn’t part of the agenda in retail? It seems marketing is being used to change consumer opinion instead of a new pipeline of environmentally friendly products.
In markets where plastic and paper compete as packaging materials, plastic is expected to increase its market share to 53 percent by the end of this year. The fastest gains for plastic are occurring in soy and other nondairy beverages and pet food applications, followed by frozen food, fruit beverages, detergents and single-serving milk bottles. According to a recent Arcus climate change survey of 2000 Canadians consumers and 1200 business leaders, consumers want honest claims that have a tangible and measurable impact on the environment. Consumers are catching up.
Growing concern among consumers about climate change
Business is not keeping pace with growing concern among consumers about climate change. Canada has one of the biggest shifts in consumer concern about global warming out of the G8 and OECD countries, an increase of 18% to an all time high of 31% last year. The global average is 16%. Consumers are shifting toward more environmentally friendly alternatives, but market forces alone are unlikely enough to meet the challenge of climate change.
“Environmentally friendly” brand?
There are many instances where an “environmentally friendly” brand with a low revenue contribution in a brand portfolio becomes a “flagship” brand with a substantially larger share of the advertising budget. The phenomenon of “image transfer” across the entire portfolio is well known. According to the Arcus study, less than 5% of executives admit that their organizations monitor their overall carbon footprint and just 4% have a carbon reduction plan in place. Although these numbers look set to rise rapidly, nearly one-half of firms have no intention of implementing carbon-reduction plans within the next three years.
Shift in consumer attitudes
Why have a majority of marketers been slow to recognize the shift in consumer attitudes? Businesses are playing catch up. The Canadian Council of Chief Executives, 150 of Canada’s top chief executive officers, released a declaration this week calling climate change “the most pressing and daunting issue” today, and acknowledging the need for “aggressive” action including “absolute” emission cuts. It’s the clearest signal ever sent by a broad coalition of Canadian businesses that they embrace the fight against climate change and accept the need for emission cut targets.
Some industries have recognized this opportunity and translated it into profitable businesses. A global retailer recently mandated new packaging guidelines last year. The policy led to a cascade of policy changes among thousands of vendors. For example, the focus in retail has been on cutting greenhouse-gas emissions with fuel efficiency of truck fleets, reduction of solid waste from stores and increasing organic foods offerings by selling them at prices more affordable to the masses.
QR (Quick Response) Codes
QR (Quick Response) Codes have been touted by many industry insiders as the next big thing North American marketers should be paying attention to. The 2D bar codesstore data on QR-enabled mobile camera phones that can be translated and viewed directly on the phone, or transferred and decoded on home computers. They can also be deployed to help marketers cut down on paper use. They’re already big in Japan, even popping up on flour bags to transmit recipes for busy moms.
Other industries have different perspectives on the problem. Resource intensive industries are concerned about power generation capacity. Consumer product and retail companies are concerned about regulatory impact of packaging and recycling. Transportation firms are concerned about carbon emissions legislation. One thing is clear, business needs to address the issue head-on with a coordinated plan of voluntary and regulatory mechanisms to meet the expectations of consumers and the environment.
Retail and brands
Here’s what most retailers do:
- They organize by brand/designer or label
- Within that, they organize by type of item
- and within that, by style and finally, by size
So, all the Armani blue suits are next to each other, then by size. So, all the boxer shorts at the Gap are on a wall, organized by style first (checks over here, stripes over there,) then by size. So, all the power tools at Home Depot are together, sometimes by brand, sometimes by function (saw) and then by type of material to be cut (wood).
Its a format that makes it easier for the clerk, not for the customer. And it plays to the label’s ego. Does anyone say, “okay, even though my son wears size large boxers, these striped ones are really nice, I’ll buy the small instead.” Of course not. So why not put all the large boxers right next to each other, regardless of designer and style? When you go to Home Depot to get what you need to build something out of wood, why don’t you find the glue and the wood saws and the screwdrivers and the screws all together in a section called, “working with wood”? It’s pretty simple: if you want to sell belts and socks and even shoes, you need to sell a suit first. Make it easy to add on, and people will do it, quite happily.