Retailers can improve traffic and build bigger baskets by sourcing greener products.
When Clorox wanted to convince Kroger shoppers to try items in its new Green Works household cleaning line, it headed for an unlikely destination: the organic dairy case.
The section would be a fitting home for promotional floor graphics, the marketer reasoned, since it serves as a major point of entry for shoppers who are beginning to buy natural products, Kevin Maher, marketing director for the Clorox Co., told SN.
The strategy — which also included placement of mobile quarter-pallet displays with educational materials near the checkout and in areas Kroger dedicates to new items — was developed after the supplier consulted Kroger's profile of its typical health and wellness shopper.
It learned that although these consumers were paying a premium for sustainable products in such categories as lighting, air filtration and natural paper products at Kroger, purchasing even conventional household cleaners from the retailer rarely entered these shoppers' minds.
“Instead, they were buying them at either Wal-Mart or Target, and when they bought these items in mass channels, they weren't even buying green,” said Maher.
Kroger helped prod customers to its cleaning aisle by promoting the items — which claim to contain 99% natural ingredients that are biodegradable and that leverage recycled packaging — on its website, along with offers of coupons for free items. It also featured the products on breakout displays in its cleaning aisles.
“Of those [Kroger] shoppers who purchased a Green Works product during those first two months, approximately 60% had not purchased a cleaning product at Kroger within the 12 preceding months,” said Maher.
By promoting the sustainability of its newly sourced items, Kroger was able to draw traffic to a sometimes neglected area of its store. Industry observers note that similar opportunities for growing green shoppers' baskets remain untapped in other categories.
It behooves retailers to source and tout, for instance, the natural, organic and ecological benefits of sports drinks, baking mixes, frozen novelties and syrups, according to research conducted by the Nielsen Co., New York, and the Natural Marketing Institute, Harleysville, Pa.
“These are categories where LOHAS shoppers purchase items, but they'd do so in higher quantities if there were healthier ingredients or more natural products available,” said Todd Hale, senior vice president for consumer and shopper insights at Nielsen.
The researchers categorize LOHAS shoppers as those who are leading “Lifestyles of Health and Sustainability.”
“LOHAS consumers spend more than non-green consumers in virtually every department of the store,” said Hale.
Nearly one in five consumers (19%) fall into the segment, which is said to comprise the top spenders in categories like produce, cereal, soup, eggs and pasta, where natural, organic and earth-friendly options are readily available.
Now is a crucial time to win the loyalty of shoppers like these, since down the road, ecologically friendly attributes will be a given, said Mitch Baranowski, founding partner of BBMG, a New York-based marketing firm.
“We're going to have to get through touting these as benefits and transform sustainable attributes into an ingredient within the brand,” he advises.
Retailers hoping to make connections with socially minded consumers can most effectively do so by maintaining transparency while communicating the “tribal” benefit of a particular product.
“It's going to be very important that the brand empowers and enables our joining a community of like-minded people that share our values,” he said.
The sense of belonging can be fostered by merchandising products that are either sourced locally, or from thousands of miles away, through a system of fair trade.
“Anytime a grocer goes out of their way to help connect a consumer to a producer or farmer by displaying their story with a photo and history, it's going to be beneficial,” said Baranowski.
Food retailers can reap a similar benefit by personalizing a shopper's individual impact.
Among the more progressive efforts is Tesco's pilot of displaying Carbon Reduction Labels, developed by the Carbon Trust, on items in its private-label line. The recently launched trial includes 20 items in four categories: laundry detergent, orange juice, potatoes and light bulbs.
In addition to the amount of carbon dioxide and other greenhouse gases emitted during each product's life cycle — through to use and disposal — the labels feature tips for how a shopper's actions can help limit the item's carbon footprint. One suggests that shoppers wash clothes in lower-temperature water.
To help consumers put this into context, Tesco developed its “Greener Living” website, accessed at www.tesco.com/greenerliving. A booklet titled “How can we shrink our carbon footprint?” is also distributed in-store.
The program has become an educational tool for both shoppers and the retailer. Tesco has already learned which parts of each of the products' life cycles are “hot spots,” or contribute most significantly to their carbon footprint. These hot spots take place during the production of orange juice, but during the use of light bulbs.
Consumers in the U.S. could someday gain similar insights, said Roberto Munoz, spokesman for Tesco's Fresh & Easy Neighborhood Market.
“We'll look to the learnings from Tesco to see if this might be something that can be used in other countries,” he said.
In the meantime, Fresh & Easy will communicate its “behind the scenes” sustainability efforts to shoppers on message boards featured on the side of endcaps throughout its stores. One reads: “We recycle or reuse all our displays and shipping materials.”
In order to gain the respect of sustainability-driven shoppers, retailers must make sure that the messages they publicize have real meaning.
“Shoppers have gotten a bit savvier when discerning between what is real and what is spin,” said Gwynn Rogers, LOHAS business director at NMI. “I've seen ads that encourage people to wear flip-flops so they don't have to do as much laundry. If a company looks like it's being opportunistic or self-serving, consumers can sniff it out.”
LOHAS shoppers remain a bit skeptical of Wal-Mart's green efforts, noted Rogers.
“The LOHAS consumer probably respects much of what it has done, but they're also cynical, since it's pushing back on its suppliers to change. It's also expected to treat employees well, but it hasn't begun to address that.”
Meanwhile, results of BBMG's Conscious Consumer report reveal that the retailer has made headway in courting mainstream shoppers with its green efforts.
When more than 2,000 online respondents were presented with a list of 50 companies and asked to pick the three most responsible, Wal-Mart ranked No. 3 behind Whole Foods Market and Newman's Own.
The retailer may be winning favor with conventional shoppers, since it presents sustainable items as accessible to all.
“We believe customers shouldn't have to choose between an environmentally friendly product and an affordable product,” Wal-Mart spokeswoman Tara Raddohl told SN. “We help ensure that all families have affordable access to energy-efficient and sustainable products, like compact fluorescent light bulbs that reduce utility bills and use less energy.”
Some of the retailer's efforts have made more sustainable consumers out of Wal-Mart shoppers, whether they chose to be or not.
The retailer recently met its goal of converting all of the liquid laundry detergents sold in its stores to concentrated formulas.
The supply chain efficiencies leveraged as a result bring it a step closer to its 5% packaging reduction goal, which it hopes to meet within its own supply chain by 2013.
In the meantime, Wal-Mart will continue to gauge penetration of items tracked by its sustainability-oriented Live Better Index.
“Index product categories are selected because consumers can make a conscious decision to purchase them for their environmental and cost-saving benefits vs. other products in the same category,” said Raddohl.
Items include extended-life paper products, compact fluorescent light bulbs, organic milk, organic baby food, concentrated liquid laundry detergent, and its two latest additions: sustainable coffee and eco-friendly cleaners.
Since April, 0.35% of coffee purchased at Wal-Mart has been sustainable, while 4.77% of household cleaners purchased there are eco-friendly.
Wal-Mart is able to keep the prices of even its sustainable items low by leveraging supply chain efficiencies, and it doesn't promote the benefits of its sustainable items through any special promotions, noted Raddohl.
Safeway, on the other hand, has adopted a more proactive approach to conveying its green message across stores, according to Maryellen Molyneaux, president of NMI. In addition to making an organic lifestyle more feasible for everyday shoppers through merchandising its O Organic store-brand line, the retailer is letting consumers know that it's serious about improving its impact on the earth.
“Our environmental messaging is integrated into our marketing,” said company spokeswoman Teena Massingill. “In April, we distributed in stores a free ‘Because We Care About the Environment’ booklet, which featured products manufactured, packaged or grown with a focus on sustainability. The booklet featured 10 simple and easy eco-tips to becoming a more conscious consumer.”
Safeway advised shoppers to install compact fluorescent light bulbs, use ecologically friendly cleaning products and turn thermostats down during the winter. The retailer has also given, to customers who spent $50 or more, a reusable shopping bag.
In addition, the retailer broadcasts messages about its environmental programs on its in-store radio network to let shoppers know about its recycling programs, its reusable bags, and its solar, wind and bio-diesel initiatives.
It also imparts its sustainability message on all of the trucks in its fleet. Each bears a decal that says “Powered by BioDiesel.” Stores that have switched to solar power have celebrations to mark the occasion. Also, Safeway's fuel stations that are powered by 100% renewable wind energy bear signs publicizing these efforts, said Massingill.
of consumers lead lifestyles of health and sustainability (LOHAS)
Source: Natural Marketing Institute