Consumers are increasingly opting for affordability over sustainability in their purchasing decisions, preferring cheaper alternatives as financial pressures hit household budgets.
This is according to a new multi-national survey by Paragon, a London-based provider of transformational business services.
The poll of 4,000 consumers in the UK, Germany, France, the Netherlands and Belgium, found that when compared to before the start of the COVID-19 pandemic, the importance consumers place on price has increased by an average of almost 5%.
Quality and ease of purchase have traditionally been key considerations for consumers. However, their significance has decreased since the pandemic and across all markets. The value assigned to quality and ease of purchase has seen a decline of around 1-3%, suggesting that consumers are willing to compromise on these traditional selling points to prioritise affordability.
How consumers view sustainability as a purchasing priority has not changed as much – fluctuating by no more than 1% compared to the pre-pandemic level. However, the study revealed a clear generational divide, in which younger consumers are more likely to consider sustainability an important factor in their purchasing decisions – 40% of consumers aged 18-24 express a higher inclination towards sustainable purchases, compared to 24% of over 65s.
With consumers facing a difficult choice between shrinking budgets and sustainable choices, the findings make it clear that they are placing responsibility for protecting our environment firmly at the door of businesses. With 73% of respondents saying that companies could do a lot more when it comes to sustainability, and 66% asserting that companies should put in more effort than consumers themselves.
The study also revealed that:
- Only 26% of consumers across markets believe that companies are doing enough to demonstrate that sustainability is a business priority;
- Only 31% trust companies’ sustainability-related claims;
- 68% feel that companies’ sustainability initiatives are not clear enough.
Consumers also expressed a desire for a standardised labelling system that demonstrates the sustainability of products or services. Most (67%) believe that such a system would help them make more sustainable choices. This sentiment is particularly strong in the UK, France, and Germany, with 73%, 72%, and 67% of respondents respectively supporting the idea. Younger consumers (18-24) also display a higher preference for a standardised labelling system compared to older age groups.
Lucy Klinkenberg-Matthews, head of ESG at Paragon, said: “Consumers today face a dual crisis: the cost-of-living crisis and the climate crisis both present serious challenges to our way of life and continue to cause significant stress and anxiety. Environmental consciousness has never been higher, but our research shows that we must not rely on the willpower of consumers to deliver sustainability goals when they are under so much cost pressure.
“Businesses need to lead the way in driving a long-term sustainability strategy, one which is designed to reflect the needs and priorities of the planet as well as the short-term needs of their customers. It is a tough balancing act, but getting it right will build consumer trust and help to deliver a more sustainable and prosperous future for businesses, as well as for the planet.”
While less than a third (32%) of consumers indicated that they were more likely to buy a sustainable product instead of a similar but less sustainable option, the initiatives that are more likely to convince consumers to pay for sustainable products are:
- If it is ‘Fairtrade’ (60%);
- If it uses non-toxic or less toxic substances in the production process (59%);
- If it uses less waste or emissions/reduces carbon footprint in the production process (56%);
- If a tree is planted for each product bought (55%);
- If it uses less energy and water in the production process (55%).
Klinkenberg-Matthews added: “The findings show that upstream sustainability initiatives, i.e., those that require action across the value chain, are important to consumers. For example, standardised labelling like Fairtrade is trusted and valued, showing that a similar system for emissions labelling could work equally well. It would require concerted effort and cooperation between businesses on a non-competitive basis, but it would help consumers to make more informed buying decisions and therefore give them a greater stake in the future of our planet.”