Consumer Trends & Opportunities: Identifying And Communicating With Today s Green Building Consumers
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1 Consumer Trends & Opportunities: Identifying And Communicating With Today s Green Building Consumers Steve French Managing Partner The Natural Marketing Institute Greenbuild International Conference and Expo November 12-14
2 LOHAS Consumer Research Project Objectives LOHAS=Lifestyles of Health and Sustainability WHO Identifying the Green Building Consumer WHAT Building Product Attribute Drivers HOW Green Building Communications Strategy Insight surrounding attitudes, beliefs, values, shopping behavior, lifestyle, media patterns, psychographics, and product/service usage dynamics. Page 2
3 LOHAS Consumer Research Methodology Research established mid-2002; conducted annually The only integrated consumer database to identify LOHAS consumer attitudes, behavior, and product/service usage patterns Primary consumer survey research among 2,000+ U.S. general population consumer households Research study fielded annually in February/March Sample drawn from representative 7-million consumer panel Nationally projectable U.S. adult 18+ population Statistically valid at 95% confidence to +/- 2% Utilization of leading research firm (Harris Interactive) Proprietary NMI consumer database Page 3
4 The LOHAS Database Summary Content & Scope 50 LOHAS-related attitudinal measures 16 LOHAS psychographic drivers/consumer behavior predictors Consumer usage of products in 9 distinct markets, including green building, energy-efficient appliances/electronics, renewable energy 75+ product categories 170 specific product attributes 160 brands Sources of influence for each of the 9 markets Media Usage 36 magazines 17 TV shows, radio programs, other specific media venues Consumer Behavior Measurements Membership across multiple organizations Shopping patterns across 30 specific retailers Complete demographics Page 4
5 Database Includes A Range Of Specific Green Building Content Building: Identification of specific consumer segments: New home buyers (within next year) Home renovators (within next year) Purchase intent/interest of carpet, faucets, lighting, flooring, paint, landscape materials, outdoor decking, windows, wood Ownership of various green building materials (e.g., recycled carpet, low-flow faucets, non-toxic paint, sustainably harvested wood, others Product attribute drivers within building and home improvement (19 measures) Usage of 15 building/home product brands Sources of influence for building products and services Appliances: Ownership of appliances, heater/furnace/ac, lighting, and related products Awareness of ENERGY STAR certified energy-efficient appliances, electronics, lighting, heating/cooling systems Appliance product attributes/drivers Usage of 28 appliance brands Sources of influence for appliances/electronics Renewable Power: Renewable power usage rates, levels of interest Renewable power product attribute drivers Page 5
6 American General Population Adults Segmented Via Comprehensive Statistical Modeling Identification of 100+ consumer LOHAS variables Statistical analysis used to derive: Maximum differentiation between consumer groups Maximum homogeneity within each consumer group The 4 cluster solution is mutually exclusive and places all U.S. general population households in one of four LOHAS- related segments This tool can be used to identify segment participation as part of a quantitative predictive analysis of future LOHAS consumer behavior Page 6
7 The LOHAS Driving Characteristics Set: Top Variables Used In Statistical Modeling Choose environmentally friendly products Protecting the environment Prefer products from recycled materials Willing to pay 20% more for sustainably made products Teach family/friends benefits of environmentally friendly products Purchase decision based on effect on world Care about renewable energy sources Choose sustainable-source products over conventional ones Care about social consciousness Prefer products manufactured in a sustainable manner Page 7
8 In 2003, LOHAS Consumers Compose Nearly 1/3 of U.S. Consumers: Up 7% Versus 2002 CENTRISTS 24.7% INDIFFERENTS 3.9% LOHAS 32.3% LOHAS = 68 Million U.S. Adult Consumers NOMADICS 39.2% Page 8
9 Summary Characteristics of Consumer Segments Segment LOHAS NOMADICS CENTRISTS INDIFFERENTS Size 68 Million 83 Million 52 Million 8 Million Defining Characteristics Significantly affected by their concern for the health of their families, the sustainability of the planet, their personal development and the future of society. Tend to move from place to place with regard to personal ideals, environmental platforms, and the overall relevance of sustainability. An assemblage who congregate toward the conservative end of the spectrum when it comes to dealing with health and sustainability. Caught up in day-to-day challenges, not necessarily looking out for tomorrow. Page 9
10 General Population Interest in Green Building Products Is Significant 35% 30% Green Building Products Users indicate having purchased two or more green building products in the past 3 years Green Home Buyers/Remodelers indicate that they plan to buy a home, renovate, or make an addition to their current home within the next year AND indicate at least one green building attribute is important for their building products 32.1% 25% 23.2% 20% 15% 10% % of U.S. General Population Households 5% 0% Green Building Products User Green Home Buyer/Remodeler Page 10
11 Summary Consumer Profile of Green Building Consumer Segments Green Building Products Users and Green Home Buyers/Remodelers are: Much more environmentally conscious than the average consumer, though not quite as high as LOHAS consumers Interested in how and what is used to make products Less price sensitive than average More likely to influence others Early adopters or new products/services Interested in buying products from companies with values like their own Page 11
12 Consumer Concern About Energy Conservation, Deforestation, & Air Quality Is Quite High (% consumer segment stating concern about the following ) 90% 83% 80% 70% 60% 63% 72% 71% 55% 76% 65% 67% 56% 50% 47% 48% 40% 38% 30% 20% 10% 0% Energy Conservation Deforestation Indoor Air Quality GP LOHAS Green Building Products User Green Home Buyer/Remodeler Page 12
13 Consumer Usage Levels of Green Building Products Shows Specific Opportunities (% consumer segment stating they have purchased the following products in the past 3 years) Low-Flow Faucet Or Showerhead Low-Fume Paint Recycled Carpet Product Energy-Efficient Windows Carpet That Does Not Release Toxins Pesticide-Free Wood Sustainably Harvested Wood GP 27.3% 18.1% 17.4% 8.3% 7.0% 5.5% 2.0% LOHAS 39.6% 27.7% 24.4% 12.9% 11.2% 9.5% 4.2% *Usage rates of these products are inherently high due to the definition of this segment. Green Bldg. User* 62.0% 52.4% 43.2% 24.0% 20.8% 16.3% 5.6% Green Home Buyer/ Remodeler 41.9% 33.7% 34.3% 13.7% 15.6% 12.8% 4.2% Page 13
14 Non-toxic Low fumes Green Building Target Consumers are Driven by Different Product Attributes and Benefits (% consumer segment stating the following are important in purchasing building and home improvement products) Attribute Easy to maintain Easy to install Energy efficient Safe for children and pets Environmentally friendly ENERGY STAR certified Biodegradable Sustainably harvested Gen Pop 70.8% 67.7% 61.2% 61.0% 48.7% 43.6% 37.7% 33.7% 27.7% 16.9% LOHAS 75.0% 69.7% 76.7% 72.6% 68.4% 71.9% 53.0% 45.4% 50.7% 34.9% Green Bldg. User 83.6% 76.0% 77.5% 76.3% 64.9% 61.9% 54.7% 44.7% 40.9% 26.4% Green Home Buyer/Remodeler 85.1% 78.9% 81.5% 74.7% 58.3% 59.4% 48.2% 48.6% 36.6% 25.7% Page 14
15 A Sampling Of Green Building Product Attribute Conclusions Indicate Specific Strategies The message is important - compare interest in safe around kids and pets to non toxic or low fumes While relatively comparable in meaning, making a safety claim linked to things near and dear will have the greatest appeal The most important attributes for green building target groups are still mainstream attributes (e.g., easy to maintain, durable, etc.) Green building products must be perform in both a traditional and environmental sense Attributes that have a financial benefit as well as an environmental or health benefit rank high (e.g., energy efficient) Page 15
16 Revealing Distinctions Between Consumer Segments Shows Importance of Targeting LOHAS consumers show a strong purchase pattern of green building products, consistent with their attitudes and other behavior Green Home Buyers/Remodelers act on their attitudinal predisposition to prefer green building product attributes They are at least 50% more likely to say they have purchased a green building product in the past 3 years than the average consumer LOHAS consumers and green building consumer segments are generally more demanding consumers than the general population They state more interest in all building product attributes More consumer education of the environmental and health impacts of some mainstream products is necessary for consumers to fully appreciate green building products Page 16
17 The Integration of Conventional & LOHAS Must Align For Long-Term Sustainability Reasons for use of conventional building products: Performance Ease of installation East of maintenance Long-lasting Maximizing Green Building Consumption Patterns Need to align reasons for use Reasons for use of green building products: Energy efficient Low fumes Safe for kids/pets Natural Page 17
18 Consumers Are Also Interested in Retail Green Building Efforts; Opportunities Abound (% consumer segment stating they would like the stores at which they frequently shop to ) Green Building Initiative Gen Pop LOHAS Green Bldg. User Green Home Buyer/Rmdlr Increase the amount of fresh air in the building 46.3% 61.4% 59.6% 59.6% Use renewable energy sources 44.7% 72.5% 58.1% 58.1% Increase the amount of daylight in the building 44.1% 57.6% 59.6% 59.6% Reduce indoor air pollution 39.4% 59.2% 53.5% 53.5% Use sustainably harvested wood 27.3% 47.8% 53.7% 53.7% Be located on a public transportation route 25.6% 36.6% 48.0% 48.0% Page 18
19 Reaching Your Target Via Specific Sources Is Vital To An Effective Communications Strategy (% consumer segment stating the following sources influence their purchase of building products) Source Gen Pop LOHAS Green Bldg. User Green Home Buyer/Remodeler Friends/Relatives 42.9% 47.0% 50.6% 51.4% Home improvement store 40.5% 43.7% 52.3% 55.2% Hardware store 27.1% 30.6% 33.6% 33.1% Brochures 25.7% 29.7% 35.6% 33.1% Magazines 25.6% 32.2% 33.3% 34.5% Spouse/Significant other 25.2% 28.4% 34.7% 34.1% Television show 25.2% 28.4% 33.9% 37.3% Store personnel 22.1% 21.8% 29.2% 30.5% Company websites 18.6% 25.0% 24.9% 29.7% General contractor 16.8% 21.3% 24.8% 22.7% Page 19
20 Summary Implications of Communication Strategies for Green Building Target Consumers As with product attributes, green building target consumers are more active consumers they are more likely to access all sources of influence Friends and relatives are a vital source of influence for each of the respective consumer segments: This draws attention to the importance of word-of-mouth and early adopters, characteristic of LOHAS consumers and both green building segments Home improvement stores are also very influential: The #1 source for both green building segments Increasing the presence of green building products in this channel could vastly increase sales Page 20
21 Utilizing Other LOHAS Industries To Reach Green Building Consumers May Prove Beneficial (% consumer segment stating they have purchased the following products) Product Category Gen Pop Green Bldg. User Green Home Buyer/Remodeler Green Cleaning and Household Products 77.0% 92.1% 92.2% Dietary Supplements 75.3% 86.5% 86.3% Energy Efficient Appliances 74.1% 90.6% 85.5% Natural/Organic Personal Care 61.5% 78.3% 76.0% Healthy Foods and Beverages 53.7% 69.3% 64.0% Energy Efficient Electronics 52.3% 65.5% 64.0% Alternative Healthcare 31.8% 45.0% 44.4% Socially Responsible Investing 10.6% 16.7% 18.3% Renewable Power 6.3% 9.4% 8.8% Page 21
22 Using Non-Traditional Products to Reach A Common LOHAS Consumer One of the primary goals of the LOHAS project was to understand the common consumer behind a vast array of product categories Green building consumers are a perfect example of this: They are more likely to use all of these product categories, particularly the less mainstream categories Opportunities exist across many communication vehicles, such as: Advertising Advertise on websites and in magazines related to alternative healthcare Cross-promotions Run a sweepstakes for all purchasers of a Toyota Prius to win a dream green home Direct mail A mailing to shoppers in GNC s Gold Card loyalty program Consumer education Work with The Body Shop to educate consumers on the toxins in their homes and how they can reduce them Page 22
23 (LCTD) Has Three Main Uses Published Reports: 9 Sector-Specific Reports 100+ Pages Each Hard Copy & Electronic Versions Customized Analysis: Target Identification User Profile Analysis Product Driver/Attribute Analysis Communications Strategy 1000 s of Others Sponsorship Opportunities: Proprietary Sponsor Content Interaction Across Core Database Customized Analysis & Report 2004 Sponsorships Now Available Page 23
24 For additional information on this exciting project or how you can capitalize on the LOHAS market: Visit Or contact: Steve French, (215) , ext. 214, Gwynne Rogers, (215) , ext. 227, Page 24
25 Use Prohibited All materials herein are 2003 by The Natural Marketing Institute. All rights reserved. Reproduction, publication (internal and/or external), transmission, or other use of any of the within materials, including but not limited to graphics, data, and/or text, for any commercial or non-commercial purposes, is strictly prohibited without the prior express written permission. Copyright Attribution Notice If written permission for use of any portion of the within materials shall have been granted by The Natural Marketing Institute, and if any portion of the said materials provided by The Natural Marketing Institute shall thereafter be published in any form at any time to any third party, the following notice must be prominently included in any and every such publication: Source: Understanding Report Page 25
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