Catherine Roche, a partner and managing director of Boston Consulting Group, says the “green” consumer is thriving despite the recession. Roche coauthored a 2008 research report that inspired an online conversation at MIT Sloan Management Review: “Capturing the Green Advantage: What Green Consumers Want and How to Deliver It.” Roche took time to speak with SMR Editor-in-Chief Michael Hopkins about green consumers and the companies catering to them. Below are excerpts of the conversation.
SMR: Your survey was done in July 2008. What’s different now compared to when you collected the data?
Roche: Initially, companies were shocked by the drop-off in consumer demand. At this point, the leading players are saying: “Before the crisis, green was about health and safety, green was about savings, green was about things that are directly beneficial to you -- and it’s still about that. Let’s not lose sight of that.”
We’ve conducted several “pulse check” surveys since [the initial survey], and we know that consumers are still regularly factoring “green” into their shopping behavior. You can be green in a way that won’t affect your style and will still fit into your tightened budgets. Companies that can make that point credibly are going to do very well from this.
SMR: What are you saying to companies now that’s different from what you were saying a year ago?
Roche: We’re saying essentially the same things, but we nuance it differently. There is a strong business case for green. It’s not only about consumer differentiation; it can also save you a lot of money -- not two or three years from now, but now. Green is about trying to use our resources more efficiently, stretch them as far as we possibly can and avoid waste. When I talk to companies now, I really emphasize the fact that green need not cost the company or the consumer more. When I said that a year ago, a lot of companies might not have heard me. Now they do.
SMR: What other sorts of advantages emerge from adopting a greener product and service strategy?
Roche: Several companies cite statistics that their employees are prouder to work with them because of major environmental initiatives and commitments -- it’s a real HR advantage. It’s more motivating to say “we need to save costs, not only for the good of the company but also for the good of future generations.” A green message galvanizes a lot more internal energy and brings a lot more enthusiasm, bottom up, than you’d get with ordinary cost-saving messages. And employee suggestion programs around green can pull in new ideas that the company would never have come up with otherwise.
SMR: In the report, you talk about the need to educate consumers about green product choices. How do you imagine that education process unfolding?
Roche: Many consumers who would be interested in green products don’t buy them -- though surprisingly, price is not one of the obstacles. They either are not aware of the choices they have for purchasing green products, or they are not aware of the benefits of those products. Retailers and manufacturers need to work together on communication in both those areas.
CEOs are wrestling with the question of how much to communicate. They’re afraid of being accused of “greenwashing.” They want to get more credit for what they’re doing, but they’re afraid to talk about it in the media because they’re too worried about backlash.
Standard-setting is a big issue. There are many standards around “green” out there now, and for the most part they don’t mean much. Consumers have told us they want information and guidance, and they’re looking for independent third-party standards to overcome the trust issues. Companies that move early to affect the way those standards are formed could have a huge advantage.
This article is adapted from “What the ‘Green’ Consumer Wants,” by Michael S. Hopkins, which appeared in the Summer 2009 issue of MIT Sloan Management Review. The complete interview is available at http://sloanreview.mit.edu/smr/.