Consumers & Individual Action in the LOHAS Space: A Global Perspective
As the Recession trudges on, in effect if not in strict economic terms, consumers’ financial anxieties and cost-cutting behaviors have become fixtures in daily life. We have adjusted to the “new normal” of this post-2008 financial world. Despite the pessimism that this mindset seems to bring, there are some very bright spots within the sustainability realm, one of which is that consumers are more active in the LOHAS space than ever before.
As within other realms, consumers are taking matters into their own hands and trying to affect change where they can. While one individual’s actions may seem small and inconsequential on its own, collectively, by definition, they add up. And, many consumers are discouraged and/or disillusioned by the lack of effective legislation to address some of the most pressing environmental issues (e.g., climate change) or by companies who are careless in their actions (e.g., BP). This leaves some to feel that if they don’t act, no one else will, and this spurs them to action – both individually and collectively.
While many skeptics thought that the Recession would spell the end, or at least the culmination, of the growth of the LOHAS marketplace, consumers did not get the message that they should stop acting or buying within this space and are continuing to broaden and deepen their actions.
NMI, as part of its international LOHAS Consumer Trends Database® (LCTD), measures dozens of consumer behaviors related to healthy and sustainable lifestyles among the general population. Trending these data over the longevity of the LCTD (which began in 2002) affords NMI the opportunity to see what effect the Recession has really had on consumer behavior. Based on this analysis, it is clear that consumers are greener than ever, less apathetic, and bullish on their future involvement. Those trends, as well as global comparisons, are explored below.
Greener than Ever
Across both purchase behavior and lifestyle behaviors, consumers are increasingly more engaged than in the past, as shown in Figures 1 and 2. As individuals, they are choosing to switch to green products and to take more green actions. Different motivations prompt consumer action, such as health, community connectedness, and cost savings, but across all segments of the population participation is rising.
Figure 1: Consumer Purchase Behavior (% US General population stating purchase of the following products)
Figure 1 Note: household product usage measured over past year purchase; food/beverage purchase over past three months; timing of previous year (pre-2010) usage varies by product
Those involved in the marketplace are probably not surprised to see the growth in many of these products, particularly CFLs, organic foods, and natural cleaning products. Brands in each of these categories have successfully communicated their products’ value, in the broadest sense of the word – meaning that the product is worth the price given the benefits embedded into the product. Also spurring this growth is the entry and involvement of big business. The LOHAS marketplace is no longer dominated by small, independent companies that are primarily values focused. Those brands are now mostly held by larger, publicly traded companies such as Kraft, Colgate, SC Johnson and many others. The business rigor, financing, and distribution these larger companies bring to the table expands the brands’ reach, and that is borne out in the category growth rates.
Of course, living a LOHAS lifestyle is not just about buying products (many consumers – 45% – believe, and rightly so, that buying less is a way to lessen their environmental impact). Consumers can lighten their environmental footprint in dozens of different ways, some of which are shown in Figure 2, all of which have increased over the past six years.
Figure 2: Consumer Lifestyle Behavior (% US General population who has done the following at least monthly)
There are a few things worth noting within these behaviors. First, there was a big spike in all activities in 2008, and some (though not all) behaviors have since moderated. It was also a highpoint in gasoline prices, and many of the behaviors that have slackened in the past two years are transportation related. With a return to lower gas prices, it is not surprising that consumers are less likely to reduce their transportation-related environmental footprint.
Two of the behaviors that have continued growth since then are taking bags to stores and boycotting brands the consumer does not support. These are important for a few reasons. First, taking reusable bags to stores has nearly tripled in the past six years – a very significant change in consumer behavior. While consumers do often get a modest credit (perhaps 5 cents) for bringing their bag, it is hard to imagine that that is significant enough to drive this much change in behavior. What may also be contributing to this shift is consumers increasing awareness of the litter that plastic bags creates, and the impact that has on wildlife, landfills, oceans, etc. Also, carrying canvas bags creates some social value, in that people see the shopper carrying their bag around the store, parking lot, and into their house. For consumers who want the social badge of participating in the green lifestyle, this is an easy behavior that may generate a fair amount of social capital.
The increase in the number of consumers steering away from brands whose values they do not agree with shows that consumers are no longer simply interested in the product, but look beyond the product to its producer, and what the producer is doing to be a better corporate citizen. This, of course, significantly raises the bar in how the company has to behave and what it communicates to its consumers. Decisions that would have been made without consumer input may no longer be handled that way, and companies may seek the input of third parties who might support its engagement within their product lifecycle and the respective environmental impact. It is important to consider that consumers do not all hold the same views, and consequently, it is critical to understand what values your consumers hold, and how you can best respond to those interests.
This mindset – voting with dollars – is also a global phenomenon, as shown in Figure 3. It is interesting to note the variability across geographies, with some consistency among Western Europe countries. Consumers in developing countries such as Brazil, India and China state a lower “values” connection – perhaps a need to balance economic development with sustainability.
Figure 3 (% General population who agree completely/somewhat that when given the choice to buy a product or service they will usually buy products from companies with values like their own)
A final trend within this topic is the role of consumer segments. Many LOHAS Journal readers or Forum attendees are likely familiar with NMI’s consumer segmentation model. LOHAS consumers (about 20% of general population adults across countries) have traditionally been the earliest adopters and most involved in health and sustainability, and that continues to be the case. However, the more mainstream segments are catching up. NATURALITES’ and DRIFTERS’ growth in activities such as taking their bags to stores or boycotting brands based on values have increased faster than LOHAS consumers. It underscores the importance of engaging with the mainstream consumer groups, and not restricting focus to the greenest consumers.
As perhaps one would expect, given the increased behavior shown above, consumers are less apathetic on environmental issues than they have been in the past. Fewer consumers report “they just don’t do much to protect the environment” and fewer also think that their actions don’t make a difference.
In particular, the rising belief that consumers’ actions make a difference is important. Few consumers, even the very dedicated LOHAS consumer, will take action if they do not believe it has some consequence. Environmental communications have done a better job of explaining the benefits of particular actions (e.g., equivalent to taking 1,000 cars off the road), and these types of communications help consumers visualize and quantify their impact.
It seems that country size seems to affect consumers’ perception of their impact – Chinese, Indian, and Russian consumers are amongst the most likely to think that their actions don’t make a difference. And, in countries as large in population or geography as these, it is easy to feel dwarfed by the scale of the impact. However, these three countries each have significant environmental issues to address, and consumers need to believe that each person can and does make a difference.
Bullish on the Future
Even while consumers are more engaged, as explained above, they are motivated to do even more in the future, as shown in Figure 4.
Figure 4 (% US General population stating their perceived Involvement in protecting the environment on a 7-point scale: 7=Very Involved and 1=Not at All Involved)
Consumers see their own involvement in environmental protection as having been fairly low in the past, with only about one in ten indicating they were “involved." Involvement literally doubled from the past 10 years to currently (17%), and many consumers project that they will be more involved in the future, doubling again to 38%. Perhaps they are anticipating increased “ease of involvement” with green activities, as we have seen over the past few years – which is a critical factor in affecting consumer behavior change.
If consumers act as they say they will, the growth rates in purchase behaviors and lifestyle behaviors will grow tremendously, which will create demand for new brands, products, and services, and new alternatives. For instance, there will potentially be room in the market for a wider selection of organic food and personal care offerings, increased availability of renewable power, and more volume of recycling and composting. Organizations should consider this potential increased involvement in their mid-to-long-term strategic planning.
Importantly, the global view on consumers’ future involvement is even stronger, as shown in Figure 5. The majority of consumers in each of these countries, and in some cases the vast majority, expect to be more involved in the future. Of course, being more involved is relative – many consumers in developing countries may not feel they have had many options for being environmentally-friendly to date. Nevertheless, their eagerness for a sustainable lifestyle is almost palpable, and marketers would be short-sighted to dismiss these markets.
Figure 5 (% General population in each country who indicate they will be more involved in protecting the environment in the future those rating a “6” or “7” on a 7-point scale where “7” is much more involved and “1” is much less involved
The data in this article measure consumers’ environmental activity from a variety of angles, and the results are consistent – consumers, in the US and globally – are increasingly personally involved in the environmental movement and marketplace and signs point to that trend continuing. Keeping the momentum going, however, should not be taken for granted. Regardless of country, it will continue to be important to bring products to market that do not force a tradeoff in consumers’ minds between environmental performance and traditional performance. Similarly, increasing product selection and overall availability will bring more consumers to the market.
NMI is optimistic that the LOHAS lifestyle and movement will continue to deepen in the as consumers find it easier and important to take action. Brands that can facilitate that behavior will be rewarded by consumers who seek to align their purchases with their values.
About LOHAS and NMI
LOHAS describes an integrated, rapidly growing global market for goods and services that appeals to consumers who have a meaningful sense of environmental and social responsibility and incorporate those values into their purchase decisions. NMI has quantified the LOHAS market and consumer since 2002, currently with nine years of general population trended insight and data across 23 countries.
NMI is an international strategic consulting, market research, and business development company specializing in the health, wellness, and sustainable marketplace. Since 1990, NMI has provided unparalleled insight to hundreds of clients around the world. NMI is the only source for global LOHAS data. For more information on NMI's proprietary research tools, customized research services, and insightful market reports, visit NMI's web site at www.nmisolutions.com.