Buyers are most likely to pay premium prices for home construction and consumer goods.
The demand for sustainable goods and services is becoming increasingly important in U.S. consumers’ purchasing decisions.
Sixty-five percent of U.S. buyers consider sustainability when making purchases, a 14% increase from a year ago, according to the Global Sustainability Study 2022 by pricing advisory firm Simon-Kucher & Partners. The shift in consumer behavior coincides with a shift in sentiment toward sustainability during the past year, as 73% of U.S. consumers view environmental sustainability to be 'as important’ or ‘more important’ to them than a year ago, the report said.
Notably, 45% of respondents who previously identified their attitudes towards sustainability as negative or neutral, now cite environmental sustainability as a higher priority when it comes to purchasing decisions. Overall, 61% of U.S. consumers rank sustainability as a top five value driver in at least one category.
Respondents indicated they are most willing to pay a premium for sustainable goods and services when it comes to home construction (39%) and consumer goods (35%). They were least likely to pay a premium when it comes to energy/utilities (29%).
"Consumers continue to prioritize sustainability, but their willingness to pay a premium for sustainable goods and services varies by product category,” said Shikha Jain, author of the study and partner at Simon-Kucher. “Sustainability is also becoming table-stakes rather than a justification for charging higher prices. As such, companies must adjust their business models to stay relevant to consumers.”
In the U.S., 71% of consumers surveyed indicated their purchasing behavior and choices have shifted in at least a modest way towards buying more environmentally sustainable products over the past five years. The U.S. is tied with Norway, which saw the largest positive shift.
A sense of responsibility (61%) was the leading motivator for purchasing sustainable goods and services, followed by a fear of environmental damage (49%) and the benefit of younger generations (46%).
Respondents also indicated there were several barriers to sustainable purchasing, including insufficient access to sustainable goods (30%), lack of affordability (28%) and lack of clarity on when a product/service is sustainable (25%).
Recent inflationary pressures around the world have also had a dampening effect on the purchase of sustainable goods and services: 35% of US respondents said they are less likely to buy sustainable goods and services due to price inflation, and 35 also said they were more selective in which categories (e.g., consumer goods, transportation, etc.) they would pay for sustainable alternatives due to inflation.
“With attitudes and behaviors towards sustainable consumerism trending upwards year over year, it’s clear sustainability is not a fad and is here to stay,” said Andreas von der Gathen, co-CEO of Simon-Kucher & Partners. “Consumers will continue to expect more from companies. Companies that don’t adapt and innovate, even in spite of hurdles such as inflationary pressures, will suffer in regard to their long-term profitability and viability.”
Simon-Kucher & Partners’ Global Sustainability Study 2022 surveyed 1,003 U.S. consumers. The study included representative quotas set for age, gender, living area, education level, employment status and income level.