Changing consumer priorities

How do you deliver a “customer journey” at the peak of the consumer while meeting environmental, social and governance (ESG) requirements?

After the consumer frenzy at the end of the year, it’s time for retail players to take stock and review their strategies. Between a highly complex health situation and consumers’ growing awareness of the challenges of climate change, the brands have their work cut out for them.

To help e-commerce players better understand changing consumer expectations, KPMG conducted a study on the factors that influence online purchasing decisions. More than 3,000 people, evenly spread across Germany, Austria and Switzerland, were surveyed about their online shopping preferences and behavior. Consumers are increasingly turning to “responsible” purchasing, according to the survey. Indeed, learning about the responsible aspect and sustainability of a product has become “very important” for 21% of respondents and “important” for 42% of them, before the importance of delivery. even access to an advisor during the purchase process.

The required transparency

However, assessing the sustainability of a product is not yet self-evident for the consumer and sometimes comes down to a simple feeling. According to the survey, consumers perceive convenience stores as more responsible than e-commerce brands. However, the majority of these consumers consider themselves more informed about the sustainability of a product sold online.

In addition to the sustainability of the product itself, there is also a demand for more transparency from consumers about, among other things, CO emissions2child and forced labour, unfair wages, workplace safety, waste management, biodiversity and deforestation, and supply chains.

Behind every risk is an opportunity

How do you turn new ESG requirements into a business advantage? The answer may be simple when launching a new product or brand: emphasize strong ESG criteria and charge a higher price accordingly. On the other hand, creating an existing product that meets ESG benchmarks will necessarily incur costs that are difficult to pass on to consumers.

Digital can be a game-changer and help retailers better distinguish consumers who are sensitive to ESG aspects from consumers who prefer other aspects. For example, for a major beverage company, KPMG introduced image recognition technology at a recycling center to identify branded products that end their lives there. The system allowed the producer to identify regions that are more recycling-friendly and therefore more responsive to certain offers, and target other regions to further encourage recycling. The solution also enabled the producer to know where its products are being consumed – sometimes far from the place of purchase.

Another approach could be to use digital tools to measure which foods in a store are approaching their best before date. In-store tracking tools already exist for these products, but digitization makes it possible to automate product promotion by alerting consumers near the point of sale to opportunities in real time. Not only does this help reduce food waste, but it also represents a commercial “plus” by attracting more visitors to the store.

A shared responsibility

If it is clear today that consumers expect more from companies when it comes to ESG, brands can differentiate themselves by helping consumers understand their role in the ‘circular economy’. The hardest part is educating the consumer, without teaching them a lesson. For example, by clearly indicating how you can reuse, repair or recycle the products. Or by helping him make more responsible choices. Between two comparable items, the cheapest is usually chosen. But if the more expensive product is locally sourced or manufactured, with more recyclable parts, why not make that value proposition clear and direct so that those who can afford it can buy it and feel good about it? The more buyers there are who make this informed choice, the more economies of scale are created to lower the cost of the product, making it accessible to a wider audience. A “win-win” equation for the company and the consumer, but above all for our planet.

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