We know “green” is good, right? But, will those green investments you may be considering pay off? A recent poll taken tells a familiar refrain. Cost trumps all other considerations, especially in a downturn. The most surprising part for me? Our youth are the most price sensitive when it comes to abandoning the “green” ideal.
From Marketing Charts:
The research found that while 76% of Millennials ages 13-29 feel it’s very important or important for brands to get involved in the green movement, 71% of teens (ages 13-17) surveyed say if they had to choose between a less expensive product or one that “gave back” to the environment, they would choose the less expensive product.
In contrast, the older Millennial demographic would choose the more expensive brand that gave back in a green way.
Moreover, the majority of Millennials surveyed found it confusing as to why products that are better for the environment are more expensive. Generate Insight noted that the extra cost – without consistent explanation – discourages the majority of shoppers from embracing and contributing to the green movement.
The study also found several other deterrents to Millennials living greener lives. These include products that require too much effort, are too time consuming and are not convenient; products that are confusing and difficult to understand, and families that are not involved in, supportive of or knowledgeable about the green movement
Additional findings from the survey:
74% of Millennials believe they can make a difference in helping Earth, but the number decreases significantly among the 13-17-year olds. Only 48% of 13-17 year olds feel they can make a difference because the problems are too huge for them to move the needle.
In terms of contributing most to living green, 87% of Millennials recycle; 84% turn off lights when not in use; 80% reduce water use; and 73% use energy-efficient light bulbs
The top three biggest hurdles for this generation faces when embracing the green movement are cost (41%), proof that they’re making a difference (24%), and ease of use ( 12%).
Let’s put aside the obvious hypocrisy of the generation that protests for one thing yet behaves an entirely different way. That is a rant for another day..
What was also surprising were the essentially flaccid actions taken by those willing to pay a bit more. It is the standard “little effect” list that our mothers told us when we were kids. Missing are larger investments like autos, solar panels, increased home insulation, energy saving appliances. I wish more data were available because I not really sure I consider buying an energy efficient light bulb for a buck or two more being “willing to pay more to save the environment”. I was thinking that statement would come with some more significant meaning.
The survey focused on items like soda (“A” gives 5% to environmental causes & “B” is cheaper). 70% of teens went for cheaper choice while only 60% of 18-29 went for 5% back. What I want to see is behavior when the cost of the item went up. If only 60% will spend nominally more when the issue is a can of Coke (KO), what is the behavior when it is $200 on a new washer and dryer or a water heater?
I think the fact auto dealers like AutoNation (AN) report hybrid vehicles choking lots because they will not sell due to the cost answers the question, no?
What the survey told me that investments in companies that focus on the “greening” of out world, at least from the consumer perspective are going to hit a serious wall until the overall economy suffers significant improvement. If the most devoted of the ideal are proving to be so price sensitive for low cost items, the number for older, more fiscally responsible generations must be stunningly low.
I think it also means that if the “green” company you are thinking about investing in is not doing business in a government mandated program (ethanol, for example), I would give serious pause as to what its future looks like at least for the next year or two..
Disclosure (“none” means no position):Long AN, none