Ninety percent of millennials and Gen Z cite sustainable purchases as a priority.
Consumers are cutting back on discretionary spending but they are still willing to invest in eco-friendly options.
That’s according to a survey of U.S. and U.K. consumers by Tata Consultancy Services, whose findings suggest that interest in sustainable shopping is on the rise, with an overwhelming majority of younger U.S. consumers willing to spend more on environmentally-friendly items.
The findings indicate that an increased focus on reaching and catering to the big-spending and tech-savvy millennial population — the largest consumer segment — will be key for retailers, Tata advised.
A large majority (86%) of U.S. said that whether an item is made sustainably or sourced responsibly is of importance to them, with an average of 69% of all consumers surveyed saying they have recently paid more for sustainable products. In exchange for rewards for sustainable choices, 62% of those consumers say they would be more inclined to spend with a given retailer.
The survey also revealed that all age groups are interested in using tech-enabled shopping experiences such contactless checkout (60%) and the use of QR codes to receive more information (54%) — with millennials the most interested in almost all digital shopping tools. Sixty-percent of millennials were more willing to spend with retailers offering virtual fitting and staging capabilities versus all other groups.
Notably, 35% of Silent Generation shoppers (born 1928-1945) are interested in using QR codes, and more Gen Z consumers (57%) were interested in livestreaming capabilities than other age groups.
“This suggests an opportunity for retailers to boost spending and build brand loyalty by prioritizing investments in technologies that improve shopping experiences and facilitate unique customer preferences,” the report said.
Other survey findings are below.
• Millennials, more than any other generation, are willing to trade their personal data for personal benefits.
• All age groups surveyed plan on changing their spending behavior to adapt to challenging economic conditions. However, millennials’ spending (which continues to grow) behavior appears to be less impacted, as 70% are more willing to trade their personal data in exchange for discounts and perks compared to 12 months ago. This is more than other age groups, including Gen Z (65%).
• Ninety percent of both millennials and Gen Z cite sustainable purchases as a priority. And 84% of Gen Z shoppers say they have chosen to spend more on sustainably produced and ethically sourced items in the last six months, as did 73% of millennials. This contrasts with 65% of Gen Xers, and 58% of baby boomers who have spent less on sustainable choices.
“As consumers tighten their wallets and belts in today’s economy, retailers must get smart and rely on data and insights with technologies that bring the best return on investment in the short and long term,” said Ashish Khurana, retail head, Americas, TCS. “At the same time, brands have a chance to turn this tough period into an opportunity to build loyalty, trust, and excitement among their shoppers. Those who will win are the ones who can creatively help their customers make sustainable choices, live up to their values, and ultimately make them feel good about shopping with them.”
The report noted there is more to sustainability than simply offering eco-friendly products.
“There is much they can do—in fact, many of them are doing—as a business, like reducing carbon emissions,” Khurana explained. “This is both ecological and economical. The key for retailers will be to look holistically at sustainability across product offerings, across business operations, and make sure their sustainability efforts are visible and reaching their target audiences.”
The 2022 TCS Retail Consumer Survey, published by the TCS Thought Leadership Institute, polled 1,500 respondents in the U.S. and 1,500 in the U.K. in October of 2022. Respondents consisted of cross-generational retail consumers of all genders ages 18-77+ (less focus on 77+) including the Silent Generation or ’Seniors’ (born 1928-1945), Baby Boomers (born 1955-1964), Gen X (born 1965-1980), Millennials (born 1981-1996), Gen Z (born 1997-2012).