Consumer behaviour is driving most changes in our corporate landscape. The demand for more sustainable considerations is increasingly visible, and it would be wise to catch this major consumer trend before it leads to a loss of medium and long term revenue:
- 32% of consumers are highly engaged with adopting a more sustainable lifestyle
- 45% of consumers stopped buying certain brands because of either ethical or sustainability concerns.
As demographics shift and the younger generations gain more spending power, understanding their behaviours becomes essential to building a sustainable business.
- Gen Z’s spending power is estimated to be $100 billion.
- Which was built op of 2.5 billion people in 2020.
- Gen Z will form a third of the global workforce in 10 years.
In other words, businesses targeting these generations now are building a future proof foundation, resulting in better market penetration and a more loyal customer base once Gen Z reaches its full spending power.
We found that the ever-evolving consumer behaviour had led to these innovative sustainability trends. Most of these trends saw their rise during the pandemic, which paved the way for new markets and allowed companies to rethink future-proofing their businesses.
That said, let’s dive into these emerging trends in sustainability that would help you change the way the world does business.
A shift away from single-use plastic
Now that consumers are aware that recycling alone isn’t the answer to lowering our impact on the environment, trends like banning single-use plastic or package-free stores are gaining momentum.
Research shows us that 65% of consumers want the food industry to be more sustainable by changing its packaging or finding alternative proteins. This trend is noticeable in two ways:
- Firstly, startups like Loop and Pieter Pot found a way to bring convenient reusable packaging solutions to the consumer by taking the responsibility of emission reduction into their own hands. Loop’s business model is about nudging consumers conveniently by delivering food in reusable packages and picking them up after being used. Investors are funding millions into these companies because of the predicted 36 billion dollar market growth between 2021 and 2026.
- Secondly, single-use plastic is systematically banned in supermarkets such as Albert Hein and Scotsman. Shoppers' changed purchase decisions let supermarkets install refill stations that enable customers to fill their reusable bags or jars. Albert Hein is currently testing this concept with 70, mostly organic, products, and Delhaize is installing Ecover refilling stations in two of their stores.
Consumers have become aware of the carbon emissions surrounding the packaging industry and are now frowning upon the overconsumption of single-use plastic. This awareness increases the number of consumers willing to bring their own sustainable packaging to the stores.
Striving towards a plant-based meat market
The massive meat industry has been taking hits since the pandemic outbreak in 2019, driving the market's interest toward a flexible and less resource-intensive industry approach. Changing consumer behaviour and concerns about the industry's reliability of ingredient sourcing are driving the plant-based meat revolution.
Consumers are demanding change and they are showing it through their choices in the supermarket. Global media has increased the awareness around the number of greenhouse gases that the meat industry is accountable for, emphasising that sustainable sourcing could be the solution. In the last two years, the meat industry lost an estimated $13,6B because consumers were buying vegan meat in masses, which increased the sales of vegan meat to $7B over the same period. For example, the Dutch company Vegetarian Butcher, acquired by Unilever in 2018, saw its revenue rise by 70% in 2020.
Shortening the value chain.
Linked to the above, we are seeing an increased amount of vegans and people concerned about the long term effects of the meat industry, which is pushing the industry towards plant-based meat or cellular meat. Companies like UPSIDE Foods and Plantible Foods receive millions of dollars in funding, showing that the industry is taking serious climate action.
The plant-based food and beverage market is predicted to grow annually by 9,29%, up to a market worth of $95.41 Billion. Of course, these trends don’t only benefit greenhouse gas emissions but shorten the supply chains of the industry, resulting in higher profits. Who knows, by creating these "meat labs", the industry might even turn carbon negative in the future.
This isn’t a short term trend because it benefits consumers, companies, and the earth. You can find more about Upside food and other sustainable ventures in our 20 sustainable ventures report.
A boom in refurbished electronics marketplaces.
E-waste has a significant impact on our climate sustainability reports showed that we generated an estimated 57.4million tons of electronic waste in 2021, with only 17.4% recycled correctly. Making this one of the largest, most complex waste streams globally and big climate risk.
The good news is that consumers are pushing in a more sustainable direction. Refurbished items left their lousy reputation behind, with DIY, repair, and sustainable phones becoming increasingly more popular.
- Aihuishou, a china-based platform, sold over 26.1m devices between March 2020 and March 2021.
- Back Market, an online vertical marketplace, recently became one of France's most valuable startups.
Consumers increasingly turn towards secondhand electronic gadgets, resulting in retailers widening their inventory and better product quality control. This better quality results in an even bigger demand for refurbished electronics. We also see companies such as Fairphone, a phone brand that makes the production flow of the phone more sustainable. And DIY repairs, which Apple is implementing in the US, are becoming more popular.
Expanding the life cycle of wearables.
The secondhand shop boom is slowing fast fashion down in its momentum. Consumers are becoming more and more aware of the environmental impact that fast fashion has and are willing to participate in the life cycle of their wearables. 42% of millennials and Gen Z say they are eager to buy secondhand items. As a result, investors are flowing money into this market, which is expected to grow 11 times faster than the broader retail industry.
The secondhand market is booming online, where it’s raising significant funding.
- Vinted raised $302M in 2021 to expand its presence in international markets
- Resale website tredUP was valued above $1B before going public.
As a response to this growing interest of the consumer, more prominent brands such as Levi’s and Patagonia are partnering with Trove. Having raised $121m in funding so far, this circular economy platform helps brands offer their white-label circular solutions.
It’s not only the lifecycle that is being modified, the amount of startups like Bolt Threads, that are developing organic generated textiles has been on the rise. More information about Trove and Bolt threads can be found in our 20 sustainable venture report.
A virtual sustainability approach.
It is estimated that the number of worldwide active AR users will reach 1.73 billion people in 2024. This growth can be explained by the fact that AR helps 71% of consumers make more confident buying decisions. We have more than a 2.14billion people in the world that can shop online but with a return rate of 20% of items that are bought. Optimising people's shopping experience will make a huge impact on the fossil fuel produced during the return process. Startups are creating virtual try-on solutions to ensure that items fit before you buy them.
- Zeekit, which was acquired by Walmart in 2021, makes virtual fitting rooms by mapping the buyers' bodies to make sure fabric and sizing are tailored to the buyers' fit.
- 3DLOOK claims that this solution increases online shopping conversion rates by four times and lowers return rates by 40%.
Now that big tech companies are investing in the metaverse, our physical and digital worlds will gradually grow closer together. A virtual sustainability approach combines two major trends that are happening today and jumping on these trends will future-proof your company's long-term strategy.
These five important consumer behaviour trends are showing us that the best time is to act now. Rising consumer awareness around the sustainability topic and willingness to act on these trends creates ripple effects across different industries and is the driver of innovative ideas, concepts, and businesses.
Through innovation, we are seeing major changes towards a sustainable future, and hopefully, we'll have many more trends to come.
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