Global consultancy firm Simon Kucher is focused on unlocking better growth for its clients, using research and science.

One of the firm’s latest research projects is on sustainability and what it means to consumers – a particularly relevant topic in the wake of the European Commission’s new Right to Repair legislation.

We caught up with Director Olivier Hagenbeek to get his insight into sustainability and its impact on consumers and brands.

How did you become involved in sustainability?

Having completed my studies in economics and law in Rotterdam, Netherlands, I started my career at Boston Consulting Group as a strategy consultant. Here, I developed a specific interest in the commercial side of strategy, and joined Simon Kucher in 2019, where I’m currently in the role of director within our consumer goods practice.

As director, I focus on supporting companies to realise sustainable growth, requiring deep understanding of their market dynamics, customers and end consumers. These questions are even more relevant when it comes to the topic of sustainability, as many companies are still researching the motivations of end consumers when it comes to the role of sustainability in a purchasing decision.

I personally have been highly interested in the environment and the topic of sustainability from an early age. Growing up by the coast, I could regularly be found on the beach where I was confronted with litter that washed ashore.

Although the topic of sustainability is much broader than waste alone, littering is (one of) the most visible and touches upon many product aspects such as durability, recyclability, packaging etc. Where initially I had to actively research to find out more about sustainability and environmental effects, today the topic is widely known and has affected the expectations of many.

So two years ago, I decided to set up a large-scale research project that we have repeated every year since, to identify how consumers view sustainability and use these insights to support companies in translating these into actions companies could take.

How much of an impact does sustainability have on consumer purchasing decisions, and has any research been carried out to demonstrate the importance of sustainability for consumers?

We, at Simon Kucher, conducted a global research survey among 11,500 consumers world wide to identify their perception of sustainability and how it effects their purchasing decisions. This research identified that 60% of consumers consider sustainability as a top-five value driver, clearly indicating that sustainability has a significant importance to consumers.

Around 70% of consumers even indicated that they made modest to significant changes in their consumption behaviour in the last year, in an effort to live more sustainably.

This, in combination with the fact that 75% of respondents indicated that sustainability is more important to them than in previous years, demonstrates that sustainability is not only important to consumers, but also gaining momentum.

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Will the new European Commission legislation with the ‘Right to Repair’ further impact buying decisions? If so, how?

The directive will focus on making repairs more appealing than replacements, incentivising producers to focus on more durable versions of their product or coming up with new revenue models (eg subscription).

Consumers are therefore expected to be made more aware of the durability of products or offered the option no longer to own a product, but to use.

Simon Kucher’s research indicated that with electronics specifically, durability is the key driver to whether a consumer considers a product sustainable. With the directive disincentivizing replacement, the aspect of durability is expected to become even more important in the purchasing decision of a consumer.

Has there already been a demonstrable change in consumers’ habits with respect to sustainable choices?

In many categories we see sustainable alternatives winning market share, regardless of industry – whether it is in plant-based proteins, electrical vehicles or low carbon chemicals – their gain in market share indicates demonstrable changes in consumer purchasing behaviour.

What do companies need to do to take into account consumer concern for sustainability?

Incorporating sustainability in your proposition undoubtedly requires innovation, whether that is on the product or on the revenue model level. However, before initiating such innovations, companies need to understand how their consumers view sustainability, as by doing so, they can adjust their proposition in a way that in line with the sustainability perception of the consumer.

For example, if a consumer expects a durable product, but the company invests in a sustainable packaging then there is a high risk that, despite the investments in innovation, the consumer will not perceive the product as more sustainable than the previous product.

Furthermore, in the case of a company setting up a completely new sustainable proposition, there needs to be a strong understanding of what the willingness to pay is for a sustainable alternative to prevent a mismatch between the value perceived and the product’s price.

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