By Sarah Fister Gale
Major retailers, such as Target, Office Depot and Home Depot, report strong sales in green goods through the recession and studies indicate consumers' commitment to buying environmentally friendly products has not fallen off.
Yet even as green product sales continue to thrive, industry insiders say, retailers need to tweak their message to emphasize quality and value in addition to the environmental attributes.
"The challenge is promoting the efficacy and innovation of the product, as well as the sustainable elements," says Neil Stern, senior partner with retail consulting firm McMillan|Doolittle in Chicago and author of "Greentailing and Other Revolutions in Retail." "The message has got to be about value."
That consumers are continuing to buy items offering a combination of quality and green characteristics bodes well for retailers who've invested time, money and inventory in private label green brands and other green product lines. The 2008 Good Purpose survey from public relations firm Edelman overwhelmingly shows that buyers plan to remain loyal to products that they perceive to have strong social value.
According to survey results, 68 percent of consumers say that even in a recession they would remain faithful to a brand if it supports a good cause; nearly seven in 10 would be prepared to pay more for eco-friendly products.
The results don't surprise Ron Jarvis, vice president of environmental innovation for Atlanta-based Home Depot. While sales are down overall at Home Depot, its Eco Options label of energy efficient products are outperforming conventional merchandise sales across the board. "We are seeing continued interest in socially conscious products in our stores," he says. "American consumers still want choices that have less of an impact on the environment."
Home Depot's Eco Options product line
Jarvis points out that Home Depot sells non-luxury items that people need to buy, regardless of the economy, which gives the company and its green brand an edge.
"We aren't selling designer luggage made from recycled material, these home essentials that people need."
He notes that energy-saving products in particular, such as compact florescent light bulbs, are doing extremely well because they have such an obvious long-term financial and environmental benefit. "Customers may pay a little more up front but they see the payoff down the line," he says.
Despite this strength, Home Depot is tweaking the marketing message – and price points – of its green products. The company has launched a price reduction program across the store, lowering prices on thousands of products to make them more affordable to struggling consumers. The Eco Options line is no exception.
|Selling Green Products in Trying Times
|Be consistent. Communicate information about your green offerings across all media, including the website, advertising, catalogs and store shelves.
Show the value. Consumers won't buy low-quality products just because they have green attributes. You have to show that they perform as well or better than non-green competitors, ideally at a similar price point.
Make them easy to find. The days of green products aisles and separate sections for green options in catalogs are over. Green products should be stocked side by side with similar non-green offerings so buyers can make comparisons and purchasing decisions on the spot.
Understand why customers are buying green products. For many businesses, green choices are made to support certifications and regulations. If you can help them quickly identify products that meet their needs, you are more likely to make the sale.
"Our advertising message is that these products are great for the environment with new lower price," Jarvis says. The company is also focusing on "opening price points," which spotlight the lowest priced items in a category.
"Consumers are looking for green products that they can afford," he says. "Focusing on opening price points in our advertising shows them that they don't have to spend any more than they would on conventional products to buy green."
This kind of dual message is critical for marketing green products in a down economy, says Stern of McMillan|Doolittle. He notes that those retailers who got involved in green branding early on, such as Home Depot, Target and Office Depot, are doing a better job of balancing the environmental message with quality and price.
Communicating the value statement is a key component of successful green marketing, agrees Anne Rodgers, spokesperson for Target in Minneapolis.
"Our focus has always been on value, giving consumers affordable options that enable them to live and work in eco-friendly ways," she says. "That's a consistent message for us, whether it's a good economy or bad."
Rodgers notes that along with pricing green products to be competitive with other product lines, the company stocks green items, such as its bamboo and organic cotton sheets, next to conventional ones so that consumers can make side-by-side feature and price comparisons.
The company also clearly states the environmental attributes on its packaging and signage to educate consumers about their choices.
"You have to offer an assortment of solutions at different price points so consumers can find multiple ways to be eco-friendly," she says.
The Green Supply Cabinet
That combination of communication and education is critical to successfully positioning green product lines and establishing the corporate brand as an environmental leader, notes Stern.
"Communication is key," Stern says. "You have to communicate what you are doing and what the value is to the buyer. And you have to do it consistently across all channels of communication, from the website and advertising down to the store shelves."
Office Depot offers a vast array of products with environmentally friendly elements, from recycled paper and low toxicity cleaners, to a complete line of private label green brands that can outfit an office from top to bottom. The company's message and selection is consistent regardless of the economy, which customers have come to rely on, according to Yalmaz Siddiqui, the company's director of environmental strategy. As a result, the company reports sales of products from its green catalog continue to grow.
"In a tough economy our clients are still looking for environmentally sustainable products that perform, and they know they can find a tremendous range of green items that are price competitive," he says.
When it comes to product messaging for green products, price and performance are equally as important as the environmental qualities, agrees Stern. "The challenge in promoting green products today is proving their efficacy," he says. "Consumers want to know if they will work as well as other products."
Part of Office Depot's approach to selling green products is recognizing that every buyer has a different idea of the definition. The company focuses its green marketing message primarily on its business customers who are often seeking specific criteria to meet certification requirements or corporate goals. It offers them a choice of 4,300 different products that feature green attributes, such as environmentally preferable furniture, technology, lighting, dishware, cleaning products and printer cartridges.
A core part of its communication strategy is its annual Green Book catalog, which this year features an entire supply cabinet outfitted with green products, along with educational content to help buyers learn more about greening their office in a cost effective manner.
The company works with customers to identify products that meet specific environmental goals or certification requirements, such as federal government mandates to purchase a certain percentage of recycled materials, or LEED specifications for non-toxic products. Once they know what the client needs to accomplish these goals, they help them choose products that best meet those criteria at the desired price point.
Office Depot also help buyers choose products that can strengthen their purchasing processes while still maintaining cost criteria, such as buying in bulk to improve their environmentally standing.
"Being aware of why our clients purchase green helps us help them identify solutions," Siddiqui says. This is especially helpful for products that may not otherwise clearly communicate their green value, such as office furniture that features low volatile organic compounds (VOC) in its design, which is a key component for LEED certification.
"We reach out to our suppliers to learn about those attributes then we communicate them to our customers," he says.
To help customers register their green purchases for LEED certification purposes, and to add further value to working with Office Depot, the company now offers a purchase-tracking tool that records green product purchases in a format that mimics LEED certification documentation requirements.
"It converts their historic spend to the exact template used by the U.S. Green Building Council (USGBC)," Siddiqui says. "It dramatically simplifies the paperwork for buyers because they don't have to do it themselves."
Office Depot also publicly honors those who make the biggest effort to buy green products through its annual Green Customer Award ceremony. This year the awards were presented during the USGBC Greenbuild International Conference & Expo to six customers, including law firm DLA Piper, Edelman public relations agency, and New Balance Athletic Shoe Inc.
"The rationale for these awards is partly to recognize customers for green purchasing, and partly to show that we are a seller of green products," Siddiqui says, noting that at the recent awards ceremony several customers approached him to say they wanted to be on that podium next year – particularly if their competitors were winners. "It's good recognition for individuals, and it's an encouragement to other customers to make that transition."
Whatever green products a company is offering, the message has to be consistent across all methods of communication, and product offerings have to support customer interests in cost, quality and environmental attributes.
"Whether the economy gets worse or better these products are not going away," says Home Depot's Jarvis. "Those retailers that carry green products through the hard times will establish themselves as the companies that care about the environment, and consumers will remember that."