The 40th Anniversary of Earth Day and Greentailing

It’s hard to believe that we are officially at the 40th Anniversary of Earth Day. Green, while now blasted into our consciousness, still feels very new. While concern for the environment has been circulating in fits and starts in retailing for quite some time, it has not really gained traction until the past few years. In fact, we published an infamous edition of our Retail Watch newsletter exactly twenty years ago that spoke in glowing terms about the green revolution, the rapid embrace by consumers and ambitious programs being launched by retailers. As we eloquently stated, “The “Green Revolution” represents one of the quickest and most significant shifts in consumer attitudes in this country’s history.” Oops. The recession of 90-92 came along and green once again receded into the background.

Fast forward to three years ago and we were in the midst of writing our latest book, Greentailing and other Revolutions in Retail. We attempt in this book to be provocative and look ahead in the key trends that will influence retail as we move into the future. Along with green, these trends include shifting demography, the rise of experiential retailing, brands going retail, services growth and new ways to reach consumers outside of traditional brick and mortar. But, as the title suggest, Greentailing vaulted ahead of the pack.

What have we learned about green since we began researching this subject:

· Green is important to around two-thirds of customers. While only a small percentage (around 17% at last count) are actively green, another 50% or so will consider green in their purchases and activities.

· The stigma around green products is disappearing. The perceived quality is going up which is encouraging trial and usage.

· Customers will not pay more for green. At most, consumers are willing to pay around 5% more for a green product.

· Retailers, from a customers’ point of view, are not doing enough

Taken together, these facts present the challenge and opportunity of going green. We developed a simple model called T.A.S.C. to present an overview of effective retail strategy:

· Think Green. Build green into the mission of the company

· Act Green. Utilize various energy savings, waste reduction and recycling programs and invest in conservation and sustainability to run more efficiently.

· Sell Green. Carry more products that offer “green” benefits

· Convey Green. Communicate your green strategy to consumers in a compelling way

Of these four, Act green has gained the most traction because of the tangible savings and benefits arising from it. The two consumer fronting areas: Selling Green and Conveying Green need the most work still. Figuring out what products truly are “green” is extraordinarily confusing for the consumer and the lack of uniform standards and labels exacerbates the issue. And, retailers are not getting enough credit for what they already do. Conveying Green is a significant opportunity. We can say that there is significantly more marketing activities around Earth Week 2010 than we have ever seen. Hopefully, more consumers get the message.

Has Greentailing been the revolution we predicted? It is perhaps too early to say. While it has dominated headlines, it is still not clear that a retailer can build a sustainable advantage by being green. Important? Yes. Necessary to compete? Absolutely. Game changing? Not yet…