Under the crunch of the current cost-of-living crisis, a new report from Capgemini, a French digital transformation consultancy, has found that 56% of shoppers are choosing affordability over sustainability.
The What Matters to Today’s Consumer report, which surveyed 11,300 consumers across 11 countries, highlighted that sustainability continues to be an important factor when deciding which retailer or brands to shop with. Yet only 41% of consumers globally say that they are willing to pay more for a product they believe to be sustainable.
This was a marked decrease when compared to the 2020 report, when 57% of consumers said that they paid higher-than-average prices for products that they perceive as sustainable.
Additionally, the research suggested that brands and retailers should re-evaluate their pricing strategies to provide affordable yet sustainable options to consumers and offer loyalty programs that help customers navigate the current crisis while building customer loyalty in the long term.
“There’s an opportunity for retail businesses to dramatically reimagine their operational strategy in order to weather this storm and pass on price benefits to consumers. By identifying new revenue streams, creating new markets, transforming operations, and optimising costs, businesses can succeed without compromising on sustainability or overall customer experience,” said Lindsey Mazza, global retail lead, Capgemini Group.
“Harnessing technology for intelligent demand planning, inventory management and automated operations can not only help reduce costs and maintain margins, but also yield sustainability benefits for organisations.”
The report also found that nearly three-quarters (73%) of consumers are making fewer impulse purchases, while 69% are cutting back on non-essential expenses such as electronics, toys, and dining out, as well as delaying the purchase of luxury items.
Saving money is top of mind for many people, with 64% of consumers buying products from hypermarkets and discount stores and 65% buying cheaper private-label or low-cost brands.
It also stressed that businesses are also grappling with challenges such as increased energy, labour, and transportation costs, yet according to the report 67% of consumers said that brands and retailers should offer lower prices for the products their families require.