Why Eco-Strategies Don’t Work And How To Change That
I spend a lot of time here talking against herd behaviour; against the reflexive urge, we all have to copy and to cluster – particularly in business.
It should be acknowledged, however, that not all herd behaviour is necessarily illogical or counterproductive. We are all swimming in the same cultural waters, and sometimes a wave of opportunity sweeps through which is so big that it’s natural for everyone to try and ride it – even if to do so is totally unoriginal.
For an example of such a wave, look no further than the swell of interest in sustainability.
Eco, green, responsible – call it what you want, this is by some distance the most common strategic territory I see both with my clients and the world at large. It’s one of those funny ideas which every brand frames as an act of rebellion, or cutting against the status quo when it has in fact become one of the most establishment play you could possibly make.
This isn’t to denigrate it: aside from its intrinsic worth (admittedly sometimes more authentic than others), it undeniably affords certain brands huge leverage. If we exclude legacy names like Nike and Coke, perhaps the majority of non-tech companies making headlines today are employing some form of “eco-strategy”.
In addition to its perceived effectiveness, an eco-strategy also has a couple of other notable advantages.
For one thing, it’s easy. Seemingly little insight, category understanding, creativity, or risk are required to come up with one. And better still, it makes us look good too. We get to be virtuous people and make our millions all at the same time. Fantastic. Little wonder everyone’s at it.
There’s just one problem:
It rarely works.
It may currently be one of the most successful forms of strategy, but thanks to its sheer ubiquity it is surely also the most unsuccessful one too. It’s a basic numbers game. Throw a million sustainable brands against the wall and you’ll get a couple of world beaters, sure – but you’ll also get 999,998 failures. So, whilst it can be incredibly powerful, it’s not exactly the most reliable of approaches.
The issue is that people read the success of certain sustainable brands far too simplistically – assuming, wrongly, that they reflect an insatiable demand for green credentials which any brand can tap into. It can appear this way, I admit – but that’s rarely what’s going on. And if you assume it is, you’re very likely to develop a naive and ineffective strategy.
What I want to explain here then is that whilst there is indeed a growing demand for this kind of thing, it is not so rampant that it releases brands from the need for smart thinking. Eco strategies don’t only need to be eco, they also need to be strategies; something far too many brands seem to forget.
What then are the characteristics of eco strategies that work?
To explain this, it’s helpful to think in terms of “market maturity” – by which I mean the three phases of eco-consciousness that a category may pass through, and the types of brand which get rewarded at each phase.
PHASE 1 – UNCONSCIOUS
The most common error in failed eco strategies is a simple one: nobody cares. Rightly or wrongly, consumers only perceive ecological issues in a small number of categories. If you try to provide a sustainable solution in a category consumers already think is sustainable, then, naturally, it will fail to cut through. Imagine, say, an eco-friendly crisps brand. In the UK at least, this doesn’t exist. Why? Not for lack of trying, but simply because nobody thinks there are any sustainability issues with crisp production. This doesn’t mean there aren’t any. In fact, I’m sure there are loads. But they aren’t well known, and as such in this category the green argument has basically no sway.
If you are a brand in such an unconscious category (as most are), then although you should of course be encouraged to behave as sustainably as possible, it would be a mistake to orient yourself exclusively around this market position. Find something else to do, and cross your fingers that the ground beneath your feet may start to shift, moving you into…
PHASE 2 – CONSCIOUS
Unlike the above categories, there are some others where environmental issues are very much apparent, even to the most disinterested consumers.
Transportation, dairy, cosmetics, energy, meat: these are all examples of spaces where eco-consciousness is high. And, as a result, they can sustain brands with eco-strategies.
(One could argue of course whether these are the most pressing industries from a scientific perspective, but that’s by the by. Consciousness is what matters in the strategy game, and so even if you think another category deserves to be on this list, there’s little you can do about it until perception catches up.)
At first glance, eco-conscious categories seem very easy to exploit. The only problem however is that generally when a category moves into this phase, the opportunity for a green option becomes so glaring that it is immediately gobbled up.
Consider for example the rise of The Body Shop and the Toyota Prius. Both of these were, in their respective categories, pretty straightforward eco plays, which emerged just as consciousness arose in their markets. As a result, they enjoyed massive success. They didn’t need to be sophisticated, and they didn’t need to be complex. They just had to get the timing right and execute well, which they did. However, they didn’t leave much space behind for copycat options. They picked the low-hanging fruit and then it was gone.
Naturally, if you have the opportunity to do something similar to this then grab it – but it’s pretty unlikely. This leaves you with one final option…
PHASE 3 – POST-CONSCIOUS
The thing about brands like the Prius and The Body Shop is this: they’re a bit “one note”. A bit basic. Yes, they offer a sustainable(ish) solution in a category where that is desired, but eventually, such categories reach a point of maturation whereby such standards are expected, and so the offering loses its teeth.
In these scenarios one-dimensional eco brands become vulnerable to their more sophisticated successors:
Brands that use eco characterises to enhance a consumer-centric offering.
What do I mean by this? Well for the most part simplistic eco strategies don’t offer much in terms of consumer value. Yes, they tickle ethical buyers who want to feel like they’re doing the right thing – and that’s powerful – but they don’t necessarily bring much innovative performance to their category. The Body Shop isn’t very special when judged purely as a cosmetics brand. And the Prius is fundamentally a pretty crap car (although cheap to run).
Great next-generation eco-brands solve this problem by using green policies expressly to enhance the brand’s performance on the core metrics of their category. Consider for instance how Lush outmanoeuvred The Body Shop. Lush, through the adoption of sustainable practices, was able to take ownership of the idea of “fresh” cosmetics. This in turn translated to fun and vibrant products such as their iconic bath bombs. These factors enabled them to become highly appealing to both the eco-conscious and non-eco-conscious alike. They didn’t demand you buy them because you “should”, but because you actually want to. Their sustainable credentials, whilst crucial, weren’t their sole driver – as in the case of The Body Shop.
(You can read a similar dynamic in the transition from the Prius to Tesla as you can from The Body Shop to Lush).
When artfully done, using sustainability as the engine for a consumer-centric offering can even create breakthroughs for brands in unconscious categories. I would say that toilet paper is not high on many people’s list of environmentally challenged industries – and yet Who Gives A Crap have managed to achieve success in that space with a green proposition. How? Primarily aesthetically. By having no plastic they were forced to wrap their rolls in paper. This in turn enabled them to produce a far more beautiful product than their competitors – perfect for bathroom display. Sure, consumers might argue that their main motivation is ethical – but experience suggests that it is likely at least in equal proportion aesthetic. As a result, the brand has been able to smuggle environmental concerns into a category where such issues are normally pretty low on the radar.
These post-conscious brands understand that the window of opportunity for one-dimensional eco plays is limited – and that the future of sustainability in any category must come through performance, not purely moral coercion.
Ultimately too many brands fail to take this into account. They believe – wrongly – that sustainable brands should wear their sustainability on their sleeve; a reason for being in its own right. Although there is undoubtedly a growing market of conscious consumers who buy into this, such brands will always be vulnerable to the subsequent generation who not only match their credentials but take them for granted – choosing instead to focus their strategic energies on something more meaningful to the average consumer.
So by all means, please be as environmentally conscious as possible. Just don’t mistake that behaviour for a ready-baked strategy. You still have to read the market dynamics just as much as everyone else. Or given the competition, perhaps even more so.