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Raz Godelnik headshot

2012: Four Trends in Sustainable Consumption

Market research firm Mintel reported earlier this month that the total sales of hybrid, plug-in hybrid, and electric cars is expected to reach 440,000 units in 2012 – a 73 percent increase from 2011. Another report published in December shows an impressive growth in car sharing in 2012 - “between July 2011 and July 2012, carsharing membership grew 44.0% in the United States and 28.7% in Canada. Between July 2011 and July 2012, carsharing fleets grew 26.3% in the United States and 20.7% in Canada.”

Do these figures indicate that 2012 was a good year in terms of sustainable consumption, where people purchased more green products while adopting alternative and more sustainable practices, such as car sharing? And if so, to what extent?

Looking at both data and studies on consumer attitudes, we identified 4 trends in 2012 that might help us to understand what the answers to these questions are.

1. Spending is up, including on green products, but the "green glass ceiling" is still unbreakable Americans increased their spending in 2012, indicating the economy has strengthened in 2012. We could see an example of this trend on Black Friday - according to the National Retail Federation “the number shoppers in stores and on websites rose 9% over the Black Friday weekend to 247 million. Spending per shopper rose 6% to $398 and total spending was up 13% to $59 billion.”

Another indication of recovery in consumer spending is the growth in auto sales this year. Based on the data we have so far this year, we can expect annual sales rate of about 15.5 million vehicles in 2012, the highest rate recorded since 2008.

And the sales of green products? Well, as you can see from the figures above, “green” cars are still less than 3 percent of the market. It means that even as we see an impressive growth in the sales of “green” cars, their market share is still very small. We see similar trends even in larger markets, such as the organic food market which is expected to sustain in 2012 a growth level of nine percent or higher (similar to 2011), which will reflect around $35 billion in sales, but only 4 percent of the U.S. food market.

Bottom line: Americans bought more stuff in 2012, mainly of the unsustainable kind. While purchasing of green products has gone up, in it still hasn’t managed to break the "green glass ceiling" of 4-5 percent of the entire market (energy and investing are the exception but these are not markets where households are the main decision makers).

2. Consumers continued to embrace sustainable alternatives to traditional consumption It is quite obvious that the sharing economy is on the rise. We don’t have overall data, but the car sharing figures mentioned above, as well as the growth in the activity of companies like AirBnB, RelayRides or Wheelz, the entrance of carpooling.com to the American market and the new high-profile players in the market like the co-founders of yerdle provide a pretty clear picture of the extent to which the sharing economy has developed in 2012.

We also saw a rise in other alternative activities. For example, the latest survey from the Yale Project on Climate Change Communication reveals that “the number of Americans who say they “always” or “often” walk or bike instead of driving is at its highest recorded level (25%) and has risen considerably since March (up 14 points).”

Bottom line: Don’t confuse the exploding sharing economy or growing interest in biking or DIY with a shift in consumer attitudes. While millions of people in the U.S. and globally have adopted alternatives to traditional consumption in 2012, this trend still seems to represent a fraction of the overall economic activity.

3. Buying “green” became easier in 2012 One of the findings in the Regeneration Consumer Study released last month was that 60 percent of consumers worldwide would “purchase more products that are environmentally and socially responsible” if these options were easier to find and use. Well, in 2012 it seemed easier than ever to find these options both online (vine.com, Farmigo, Good Eggs) and offline (growing number of farmers markets, retailers like Target, IKEA and Home Depot offering more products).

Bottom line: The availability obstacle became less relevant in 2012. We will need to wait and see how new online venues like vine.com will impact consumer behavior.

4. Consumers in developing countries pursue a greener path While so far we talked mostly about trends in America, it’s also important to remember that not all consumers worldwide are alike. In 2012 it seemed more obvious, with a numerous of studies showing significant differences in the attitudes of consumers in developing and developed countries.

Examples? GfK reported in its latest Green Gauge Global study that purchases of eco-friendly products have grown significantly China and Brazil. The 2012 National Geographic/ GlobeScan Consumer Greendex showed that the top-scoring green consumers of 2012 were from India, China, and Brazil. Last but not least, according to  the Regeneration Consumer Study consumers in developing markets are more than twice as likely as their counterparts in developed markets to report that they purchase products because of environmental and social benefits (51% to 22%) and are willing to pay more for sustainable products (60% to 26%).

Bottom line: If consumers will lead the way, it will be in developing countries, not developed ones.

[Image credit: killerturnip, Flickr Creative Commons]

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons The New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.

Raz Godelnik headshotRaz Godelnik

Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.

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