Report released with Wharton Baker Retailing Center finds consumers will pay more for sustainable shopping options
Key gaps found in retail executives’ knowledge of consumer sustainability preferences
PITTSBURGH, January 17, 2022–(BUSINESS WIRE)–Retailers should listen more carefully to their customers about their sustainable shopping preferences, according to a new report based on data gathered from the country’s top retail executives and thousands of consumers. He discovered that there is a deep sustainability knowledge gap between these two cohorts, which presents opportunities for retailers to not only build their reputation and build consumer loyalty, but also increase their profits.
Retailers were surprised to learn that consumers are willing to spend more on sustainable brands.
While two-thirds of consumers say they would like pay more for sustainable products, two-thirds of retailers think consumers not be willing to spend more on sustainable brands.
Equally telling was the finding that almost three-quarters of consumers surveyed value product sustainability more than brand name; almost all (94%) of retailers think the opposite, saying the brand name is more important to consumers than sustainability.
Additionally, retail executives rank brand-operated resell/resell programs last when asked what type of sustainable shopping formats consumers would use the most. However, 41% of consumers say they already buy through resale/resale brand programs, such as those offered by Patagonia, Lululemon or Levi’s.
Greg Petro, CEO of First Insight, said, “This report clearly demonstrates that retailers are leaving money on the table. Brands and retailers need to listen to the voice of the customer on issues as critical as sustainability. Consumers want more than performative metrics from retailers. and brands on ESG priorities, which will only grow in importance as Gen Z grows in influence.”
First Insight has partnered with the University of Pennsylvania’s Wharton School Baker Retailing Center on this report as part of the company’s ongoing commitment to providing actionable consumer insights to the retail industry in detail. Since 2007, First Insight has been helping retailers and brands operate more sustainably and make better decisions by using voice of the customer and predictive analytics to refine purchases and weed out underperforming offers before costly investments in development and in inventory are made.
“It’s imperative that retailers understand their customers’ values so they can adapt in the future,” said Professor Thomas Robertson, academic director of Wharton’s Baker Retailing Center. “For example, half of retail executives believe that price is the main reason consumers buy across all recommerce formats. In fact, only 27% of consumers agree that price is their motivation, while that 54% combined say they buy from resale because they care about the environment and prefer sustainable or circular shopping.Brands like Vestiaire Collective and Farfetch Second Life know there is a great future in resale, even at luxury prices.”
A former First Insight Wharton Baker retail center report demonstrated that Gen Z leads the way in sustainability and has an outsized impact on older generations, especially their Gen X parents. Gen Z’s influence extends to purchasing behaviors, including included in resale, with sustainable purchasing decisions becoming more common among all generations.
Other key findings include disparities in how consumers want to be compensated for resale items, how much and how often consumers actually use recommerce, and price targets for resale items.
Ironically, all of the leaders in the dataset – fully 100% – assume that consumers would rate retailers as lacking in transparency regarding their sustainability efforts. Yet consumers give retailers more credit, with 59% indicating they believe retailers are sufficiently transparent.
Download the report to see all the key findings here.
About First Insight, Inc.
First Insight, the global leader in next-generation experience management (XM), is transforming the way companies make better decisions that lead to a sustainable future. Customers include some of the world’s largest vertically integrated brands, sporting goods companies, department stores, consumer products companies, CPGs, mass retailers and wholesalers. For more information, please visit www.firstinsight.com.
About the Baker Retailing Center at the Wharton School of the University of Pennsylvania
The Jay H. Baker Retailing Center is an industry research center at the Wharton School of the University of Pennsylvania. The Center develops ideas, through programs and resources, with our faculty, students and industry leaders who influence industry research and encourage discussion on trending retail topics. Our faculty are world-renowned researchers, and our board members are globally recognized omnichannel and speak directly to consumer brands and retailers. The center was established in 2002 through a generous donation from Jay and Patty Baker. Jay Baker, former president and director of Kohl’s Corporation, graduated in 1956 from the Wharton School. Learn more about the Wharton/Baker Retail Center.
Methodology: First Insight’s findings are based on findings from surveys of US retail executives and consumers conducted in partnership with the Baker Retailing Center at the Wharton School of the University of Pennsylvania. The executive survey was based on a sample of 51 senior retail executives and was conducted in October 2021. The consumer survey of over 1,000 respondents was conducted through industry sources. exclusive samples from the panels that participated online. Further details of the results are available upon request.
See the source version on businesswire.com: https://www.businesswire.com/news/home/20220117005392/en/
Bern Communications Group
SVP of Marketing
Baker Retail Center: