The Myth of the Sustainable Consumer

Sustainability has become a powerful driver of consumer behavior. People are changing what they consume, how they consume, and how they lead their day-to-day lives, motivated by a concern for sustainability. Our research has identified a consumer-driven megatrend that holds tremendous strategic opportunity for companies if they change how they think of consumer preferences for sustainable options.

The belief that there is only one type of sustainable consumer fails to recognize the diversity of consumer preferences. The stereotypical sustainable consumer who has an intense passion for all things sustainable and a high willingness to pay for sustainable goods and services across all categories accounts for only a small portion of the world’s consumers. Sustainability is now a present and influential factor in how most consumers make their lifestyle and purchasing decisions. But the influence of sustainability on consumers is not uniform, neither in its intensity nor its extent.

To understand these differences and make them actionable, we conducted two core studies on consumers in North America and Europe and segmented them by performing a cluster analysis based on two dimensions (see “The Research”):

• Their commitment to sustainability. Each consumer responded to a number of specific purchasing situations for 19 product categories.1 For each category — for example, apparel — they ranked the importance of value drivers from a list we provided. The number and type of value drivers depended on the category but always included price, quality, brand, and environmental sustainability. The measure of an individual’s commitment to sustainability is the number of times they ranked environmental sustainability among their top-five buying criteria across the categories they rated.
• Their relative willingness to pay more. We asked each study participant whether they would be willing to pay less, the same, or more for a sustainable alternative within a certain product category. The measure of an individual’s willingness to pay more for sustainable solutions is the number of times they stated that they would be willing to pay more across product categories.

The graphic on this page shows the results of that analysis for European and North American consumers. (See “The Consumer Behavior Map.”) Consumers fell into eight distinct archetypes, each with its own value drivers, attitudes, motivators, barriers, and information sources when it comes to purchasing sustainable goods and services.

The core studies provided the structure for the segmentation, and the basic interpretations and richer descriptions of each archetype were derived from how the consumers responded to the general and industry-specific questions. To test the segmentation and enrich the descriptions of each archetype, we conducted focus groups with more than 70 U.S. consumers in March 2023 across seven of the eight archetypes and then conducted one in-depth personal interview with a representative from each of the eight archetypes. The insights from the focus groups and interviews validated, to a high degree, the findings from our core studies, including the following:

• Primary motivating factors and barriers for consumers when it comes to purchasing sustainable products and services.
• The willingness to pay for sustainable product and service alternatives.
• The differences in consumers’ commitments to sustainability in terms of behavior in their everyday lives and their purchase decisions.

The consumers themselves brought the finer distinctions to life as they described their aspirations, experiences, and frustrations. The insights from the qualitative research also confirmed our hypotheses around consumer loyalty, advocacy, and information search.

Meet the Eight Sustainability Archetypes

Two extremes anchor the segmentation in the consumer behavior map we developed based on our findings. The champions, who represent 8% of the population, are fully committed to sustainability and are willing to pay premium prices to support that lifestyle. The nonbelievers (15%) never take sustainability into account in their buying decisions, nor do they have any intention of paying a premium for a sustainable solution. In between those extremes are a range of other attitudes that we sorted into the following archetypes:

• The image driven (10%), who aspire to live sustainably but give greater weight to sustainability in categories that affect their perception of themselves or how they are perceived by others, such as beauty and personal care.
• The planet savers (13%), who are committed to making sustainable purchase decisions but not willing to pay a premium, instead opting to purchase secondhand items or products that last longer.
• The thoughtfuls (9%), a well-informed group of consumers who share the champions’ passion and willingness to pay a premium for sustainability but to a lesser degree, and who also have an evolving relationship to sustainable products.
• The cost conscious (18%), a group that prioritizes sustainability in some categories but is generally unwilling to pay a premium and, unlike the planet savers, is less inclined to seek out alternate sustainable solutions.
• The selectives (8%), whose awareness of environmental issues rarely translates into purchasing decisions, and whose commitment to sustainability diminishes when it requires significant effort or sacrifice.
• The skeptics (19%), who doubt consumers’ ability to make a difference on environmental issues and companies’ ability to make credible and trustworthy claims about sustainability.

Champions and nonbelievers are the two archetypes that underpin what we call the green mirage. By conflating a commitment to sustainability with a willingness to pay more for it, the green mirage is the assumption that consumers have a binary relationship with sustainability: They either care about it or they don’t; they are either champions or nonbelievers. Yet our more nuanced segmentation shows that the consumers who are either all-in or all-out account for less than a quarter of the general population.

Although the consumer-driven megatrend toward sustainability is spearheaded by the champions, it is also taking place across the 77% of the population represented by the other six archetypes that take sustainability into account. Because of the differences in their commitments to sustainability and their willingness to pay — as shown in the consumer behavior map — designing and marketing any scalable sustainable solution will be a multifaceted challenge. A solution that appeals to a combination of the champions, the image driven, and the thoughtfuls (totaling 27% of the population) will be very different from a solution designed and marketed to appeal to the planet savers, the cost conscious, and the thoughtfuls (40% of the population).

Companies often attribute slow adoption of a sustainable solution to consumers’ lack of interest in sustainability rather than to another, more likely factor, such as a product’s affordability or accessibility, consumers’ level of trust, or how informed they are. Those companies have what we call a perception gap because they underestimate the true demand in their market. In reality, the biggest challenges for the image driven, thoughtfuls, and selectives are with access — they often struggle to find what they want or need. Affordability is the largest barrier for the planet savers, cost conscious, and skeptics. And all of the archetypes are frustrated by a lack of information and low trust.

The Consumer Archetypes in Detail

Our analysis found no significant differences across demographics within each of the archetypes. All archetypes can be found regardless of gender, income, geography, and age group, in relatively equal proportions. Male baby boomers in the United States, for example, show a similar commitment to sustainability and willingness to pay a premium as female millennials in Germany and France. Demographics therefore provide limited insight into whom a company should target with a sustainable solution.

The commercially relevant differences across the archetypes start to emerge when we look at the weight of consideration each archetype gives to purchase criteria such as price, quality, brand, and sustainability. The figure “Value Drivers for Consumer Archetypes” shows the relative importance of these four value drivers by archetype, aggregated across the 19 product categories we tested.

All of the archetypes make trade-offs in different ways across these four major value drivers. Sustainability and brand matter roughly equally for the cost conscious, who consider price to be their most important value driver or purchase criterion, but sustainability ranks as the primary value driver for the planet savers, thoughtfuls, and champions.

Disaggregating this information by category not only reveals more commercially relevant and actionable insights but also underscores how the green mirage can cripple a company’s efforts to bring a sustainable product to market. The table “Where Consumers Value Sustainability” shows the percentage of consumers by archetype who ranked sustainability among their top-five purchase criteria for the given category.

The importance of sustainability remains robust for the champions, thoughtfuls, and planet savers across all categories. The variation by category is wider for the cost conscious and image driven, and the importance of sustainability is marginal in some categories for the selectives and skeptics. Within each archetype, sustainability tends to have its lowest priority in financial services and in leisure and travel. In financial services, evaluations often depend more on the way a service is delivered than on the nature of the intangible service itself, which makes the sustainability aspect harder to assess consistently at this point in our research. The relatively low emphasis that some archetypes place on sustainability in leisure and travel aligns with statements we heard during the focus groups. “If I’m taking vacation, [sustainability] is the last thing I’m thinking about,” said one selective. Another participant in the same group said, “If I’m on vacation, I feel like I’ve earned it.”

To show the limitations of the green mirage and the importance of understanding the consumer perspective, let’s now look at a potential product for the beauty and personal care category. The implementation of a price-skimming strategy with a premium price position would exclude the planet savers and cost-conscious archetypes from the potential market and presumably a significant portion of the thoughtfuls, for whom price is the second-most-important purchase criterion. The green mirage thus leaves the company with only the champions as a target market, although it may also attract some image-driven consumers at the fringes because they place relatively high importance on quality. That means the company has an addressable market of roughly 8% to 10% of the general population. The company would also, therefore, assume that the remaining population’s unwillingness to pay a premium means that those consumers — the vast majority — must have no interest in sustainability.

Many of the consumers we surveyed would beg to differ. Sustainability is a top-five value driver for 94% of the planet savers and ranks similarly (86%) among the thoughtfuls. Even 71% of the cost-conscious consumers rank sustainability as a top-five value driver in the beauty and personal care category. The insistence on a skimming strategy with a premium-price position in that category thus excludes 40% of the population with a strong interest in sustainability. In this example, that 40% would account for a significant portion of the market’s pent-up demand, which will remain untapped until affordable, accessible, and trustworthy sustainable solutions hit the market. Those are the solutions that companies won’t pursue as long as they buy into the green mirage.

Most companies already conduct research on their consumers and have data on their purchasing behavior, which should help them sort their consumers among the eight archetypes. Alternatively, they may use the archetypes to adapt or augment their existing customer segmentation and better tailor their offerings and marketing to target a broader range of consumers with sustainable solutions.

Companies also have other information they can draw on to close their perception gap and pursue strong growth with sustainable solutions. We found that the eight archetypes share important characteristics that companies can incorporate into their commercial strategies:

• A distaste for waste. Even the skeptics and nonbelievers are keenly aware of the destructive power of certain consumer habits and corporate practices. They share an aversion to waste and inefficiency, although the archetypes vary considerably in the extent to which the awareness and aversion alter their day-to-day behavior. Nonetheless, the common thread is a baseline of common sense that seems to span all the archetypes. Companies should not underestimate the power and appeal of a commonsense anti-waste message, backed up with anti-waste measures, which can range from less waste in each part of the value chain (production, shopping, packaging, usage, and disposal) to the elimination of some steps in the value chain by changing the business model.
• A personalization of sustainability. Many focus group participants and interviewees linked sustainability to personal health and well-being and thus de-emphasized the overall social or environmental impact. They act as much in their own self-interest as for the benefit of others.
• An appetite for more positive experiences. The user experience is vitally important for consumers when they purchase and use sustainable solutions. A positive experience when using a product or service not only helps validate the claims the seller has made but also heightens the consumer’s awareness and inspires them to look for solutions to other needs.
• Critical thinking. Every consumer has unresolved questions about how environmentally sustainable products and services are and lingering frustrations about their inability to find credible answers. The number of questions they have and the intensity of their frustrations vary by archetype.
• The power of personal and social networks. One of the most profound findings of our core studies was the power of personal and social networks in influencing consumer opinions. While this influence took on different forms and intensities across the archetypes, it is one feature that all of the archetypes — even the nonbelievers — have in common.
• Shared responsibility for sustainability goals. Every archetype sees progress on sustainability as a shared responsibility of for-profit companies, nongovernmental organizations, governments, and consumers themselves. The archetypes do differ, however, in their views on the need for more governmental regulation and which of the parties listed should play the most prominent role.

When companies that believe in the green mirage look at their customers, they see only a mass of disingenuous consumers who claim to be interested in sustainable solutions but are steadfastly unwilling to pay for them. The reality is that there is a large and differentiated market of consumers who are open to change and ready to adopt sustainable options as soon as they have affordable, accessible, trustworthy products. The combination of archetypes that a company will want to target will depend on its objectives, innovation capabilities, and ability to balance commercial creativity with creative destruction.