How to connect changing customer expectations with long-term sustainable innovation strategy

Trends in consumer behavior are impacting how businesses design and deliver on their products and services. New Kaleido Insights research analyzes behavioral trends and best practices from leading organizations. 

Despite a prevailing narrative that consumption behavior is difficult to change, several trends and studies suggest otherwise. A recent Pew study analyzing consumers across 17 advanced economies found 80% are willing to make changes to how they live and work to address threats posed by global warming.

Particular demographics, such as those under 50, women, and those with post secondary degree education, express greater willingness to change. Political differences occur most in the United States, but dissolve when (sustainable) behavioral changes are framed around supporting local communities and providing jobs

While consumers of all demographics remain price sensitive––and suspicious of greenwashing claims––they also aren’t waiting on businesses to change their behaviors. 2021 data from Ipsos found 56% of consumers across 29 countries say they are already changing at least some of their purchase and usage behaviors out of concern for climate change.

The last decade has seen several behavioral trends which predict consumer purchase decisions, issue involvement, and support for policies and actions.

  • Increases in climate protests and petitions. Since 2016, over 159 million people have signed online petitions in support of protecting nature. (World Wildlife Foundation)
  • Increases in purchasing goods produced and sold locally. 40% shoppers are spending more budget locally since March 2020. (KPMG)
  • Increases in socially responsible investments and donations. Socially responsible investments now account for a quarter ($26T) of all assets managed, with recent growth driven by younger investors (Harvard)
  • Increases in those who limit meat, are opt for alternative protein sources. 1/4 Americans are eating less meat (Gallup)
  • Increases in digital and e-commerce adoption. 71% rise in online searches for sustainable goods globally over the past five years (WWF/EUI)
  • Increased demands for transparency. From food and environmental impacts, to labor, leadership, sourcing, and data protection… (Forbes, FMI)

The trajectory of readiness and willingness to change stands only to increase in the coming years, not only given younger demographics’ distinct concerns and purchase trends, but because abundant climate data and modeling forecast worsening impacts and dangerous thresholds crossed in the next few decades.

Messaging Matters: A new study from the World Resources Institute found that messages printed on menus encouraging people to “join a movement of people choosing foods with less impact on the climate” roughly doubled the percentage that chose plant-based meals. (Image Left: Five of the 10 top performing  themes WRI analyzed for behavioral nudge impact)



1. Be the interface to facilitate behavioral change. Just as businesses have catalyzed behavior change for consumers in other areas (e.g. seatbelts, mobile apps, stronger passwords), lead the way by making behavior change intuitive, seamless, and value-added. Given the systemic changes and impacts of behavior change, every function plays a role, for example:

    • Marketing. Leverage market research to identify behavior triggers/needs. Apply persuasive tactics for positive impacts (e.g. conscientious decision-making, lifetime cost analyses, certifications). Incentivize loyalty through buy-back, rewards programs, or self-administered repairs. 
    • Product. Assess product lifecycle for alternative renewable designs and efficiency impacts (i.e. raw material sourcing, production, distribution, utilization, reuse/recycling). Embrace regenerative design best practices, such as biomimicry, feedback loops, resource minimization, modularity, or existing industry frameworks.
    • Supply chain. Develop the infrastructure (partners, processes, technologies) to underpin product circularity as well as consumer desires. Assess participants and regions for localized opportunities (e.g. reduce, repair, reuse, repurpose,  re-monetize). 
    • Policy. Exert influence through industrial policymaking and lobby for resource restoration, prohibiting ecosystem destruction, and tax policies that support industrial energy transformation. Employees, consumers, regulators, and increasingly investors expect it. 

2. Aim for evolution over revolution. Aspire for great change, but activate with small steps. Start with single suppliers; pilot targeted points of the value chain such as advancing regenerative agriculture methods. These changes can add up and have compounding impacts to suppliers, communities, and procuring greater momentum with both consumers and investors.  

Case Example: Patagonia wields customer needs and marketplace infrastructure for long-term strategy 

Outdoor clothing retailer, Patagonia is well known for embedding environmentally and socially responsible practices into its operations and consumer strategy. Here we analyze several examples of ways they are encouraging (and capitalizing on) consumer behavior change as part of a long-term customer acquisition strategy.

  • WornWear, Patagonia’s second-hand marketplace serves to reduce waste by recycling gear, while simultaneously offering market entry points for more price-sensitive buyers. WornWearWagon is a mobile repair shop, which tours the country fixing gear for free. 
  • Self-repair program, such that people can repair products themselves. 
  • Buy-back program, allowing people to sell-back their used gear and/or receive store credit for new or used. 
  • Green education, not greenwashing. Marketing campaigns like “Buy Less, Demand More” and “Don’t Buy This Jacket” couples education with brand message: on material recycling, regenerative agriculture, fair-trade production practices, and the role both consumers and businesses can play. 

Within the first year of launching this campaign in 2011, Patagonia’s revenues increased 30% (source)

Multi-generational strategy. The above programs also provide infrastructure supporting both upscale consumers, happy to spend lots of money on gear, and more cost-conscious (often younger) customers. This has a dual effect: higher costs help subsidize more sustainable and regenerative sourcing methods, and widen access to quality goods designed with lifetime warranty. 

This post offers a snapshot of one of the four key consumer signals companies are overlooking in their investments and innovation programs in 2022. To access more, check out the full report here.



Thumbnail photo courtesy of Pexels and Sarah Chai.

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