Although sustainability as a concept incorporates multiple facets, it predominantly translates into concerns about environment and more specifically climate change, according to our latest TrendLens™ 2022 study of global affluent consumers. The pandemic has accelerated (and increased) awareness of purpose driven consumption, as can be noted from the attitude and adoption of sustainable lifestyles of affluent and HNW consumers.
We observe that this adoption varies by demographics and geographies. Awareness, context and age are dominant variables influencing consumers and their perceptions.
Affluent millennials, boomers, and women are more prominent in their adoption of sustainability as a guiding principle in their decision making. The younger demographic is more receptive to messaging around sustainability and consequently they also are more aware in their understanding of the concept. For instance, they look at sustainability more broadly and also include social causes as well as governance in the mix.
Increasingly we also see consumers in Asia, and more specifically in China, being aware and using sustainability and environmentalism as a motivation and even screening criterion in their decision making.
Our analysis of millennials and zoomers in China shows that these two demographic cohorts have in fact been looking at other facets of sustainability, such as employee and consumer safety, fair trade and even sourcing of raw material and production.
WHY IS SUSTAINABILITY GAINING SUCH TRACTION?
Across key global markets, our study shows that the concern among affluent consumers about global warming continues to be near universal and uniform across markets. The purchase incidence and acceptance of second-hand luxury is on the incline and is also a strong marker of consumer’s purpose driven consumption.
It’s only fair to say that conscious, ethical and purposeful consumption will increasingly become the norm, starting with mature markets. We believe as more and more affluent consumers adopt this type of consumption, with time more will join in and thereby making it mandatory for brands to source, manufacture, govern and retail in a human centric way.
The sooner brands realize this increasingly prevalent sentiment, the better prepared they will likely be to future proof their business.
WHAT ARE THE EXPECTATIONS FROM BRANDS?
Our study also shows that at least two thirds of the affluent consumers in each market do care about luxury brands being ethical. So, the vast majority of the affluent consumers are certain that the brands they consume will have to commit to and deliver on their sustainability pitch.
So does that mean these consumers are willing to pay premium for sustainable brands? The answer is resounding yes. Four fifths of these consumers in each market are also willing to pay at least a 10% premium for such brands. The implication? Brands have little choice but to be and be seen sustainable. We believe being sustainable will become a hygiene criteria for most affluent consumers in the next 5 yrs.
IS BEING PERCEIVED SUSTAINABLE CRITICAL FOR BRAND AFFINITY?
Already we see evidence of strong correlation between ESG perceptions and brand affinity. These affluent consumers are also open to pay premium for brands being perceived as sustainable. It only means that in the future, brands that are perceived to be less sustainable, will likely find it hard to connect to these consumers.
CONCLUSION
Going forward, we believe sustainability will become one of the core motivators for product categories beyond beauty. The sentiment will also become universal and therefore very critical for the success of both brands and businesses. Brands which have taken note of this increasingly prominent sentiment and have been adopting a more sustainable practices and messaging, are likely to have an edge over competition.