The green Market definition in B2B and B2C - The very notion of "market" is at the heart of any marketing approach. A market can be defined... revolution (impacts, how to adapt and change retail business models and organisations) was the title of Forrester‘s Thomas Husson’s Keynote at the Paris Retail Week 2023 Trade Show. A topic of vital interest to our readers and ourselves. We interviewed Thomas to better understand how urgent the situation is, and how consumers and retailers are reacting. Thomas named a few best practices in this area. Not everything is perfect in that unfolding “green market revolution”, of course. Yet, a few businesses are making efforts, and they should be encouraged.
The Green Market Revolution Is Underway
Green market revolution, isn’t that an overstatement?
This term is a reference to the industrial revolutions of past centuries. Environmental issues will force us to rethink a lot of things, including our business and organisational models and how we get around. As with the industrial revolutions, a great deal of innovation and investment in infrastructure are taking place.
As with the railways during the Industrial Revolution, governments and regulatory changes are driving change. And this is just the beginning. We don’t quite realise it, but it’s happening. At Forrester we had rather talk about a green market revolution than CSR. Even though CSR is flavour of the month. Revolution is a more striking concept. It’s also closer to what’s really going to unfold before our eyes. Whether we like it or not, we’re heading straight for it.
Yet you say businesses aren’t doing enough. Is it the economy, stupid?
It’s a bit like what happened with digital. Initially, it’s an investment. And then, unlike digital, we have to measure the financials. And that’s not easy when the metrics aren’t in place. But things are changing. Costs are rising because of energy prices. And revenues can increase if you have the right positioning and consumers are prepared to pay a premium for greener products. As for those who can’t afford them, they may be frustrated and expect businesses to offer more environmental value for the same price.
The basis of your thinking is the need to look at things positively
Exactly! Opportunities exist, but they are not necessarily for everyone. But if we look at the triangle of inaction between consumers, governmental or local authority initiatives and businesses, everyone is waiting for everybody else. But at the end of the day, there will be companies that will turn this revolution into a competitive advantage. What’s more, when it comes to recruiting younger employees, getting one’s act together will be a must.
What about the green market revolution in the United States?
Traditionally, in the US one favours self-initiative and philanthropy. This green market revolution is less directly rooted in the heart of their business models. But things are changing. Above all, there is the IRA (Inflation Reduction Act), which has little to do with inflation, but allows companies to invest in innovation, in so-called battery gigafactories, solar panels and in renewable energies.
Is this green market revolution reflected in consumer perception?
If I take France as an example, around a quarter of French people are committed to changing their habits. They are very careful about what they buy, they research the topic a lot and they make a fair amount of effort. Yet, there’s also a good proportion of them who would like to do more but can’t because they can’t afford it or because changing one’s way of life is too difficult.
Awareness is on the rise. That said, it’s difficult with double-digit inflation at the grocery store. A third of households are tightening their belts. Reducing the use of fossil fuels isn’t their main priority.
Six of the nine planetary boundaries have been crossed. Will it speed up the green market revolution?
I think that very little is known today about these nine planetary boundaries and that the focus is very much on carbon emissions and climate change. And that’s fine, because we’re now beginning to measure these indicators, but it’s difficult to keep track of the other issues. What’s important, I think, is to make people aware, particularly managers, that all the boundaries are linked with one another. These issues are extremely complex and technical and should not be taken lightly. Because resources are in short supply. Ultimately, there is a lack of education and knowledge on these subjects.
On the management side how is this green market revolution perceived?
Let’s face the music, things aren’t going so smoothly. We’re faced with short-termism and profitability issues, with soaring costs, inflation and a number of crises on top of each other. Getting to grips with the fact that all factors are linked with one another can help you grasp how strategic these issues are. But change will not happen overnight. I believe a minority of businesses manage to change their models and yet remain profitable. They will be the winners, ultimately and they will increase their Market share can be defined as a percentage accounted for by a given producer or brand in its own market. Market share = Current market of producer or brand / Current market of product all brands.
Who are the best practices?
Albert Heijn is one of the traditional retailers in the Netherlands with the most ambitious scope 3 reduction targets.
This is important because Scope 3 is the impact of carbon emissions linked to the company’s value chain, its consumers, the The B2B purchasing process is the result of a long life cycle often linked to a contract as there are many people to convince. of goods and services and haulage. So this is where it all happens.
For major brands like Dannon, above all, it takes place in the agricultural and production value chain. As a result, their targets are among the most ambitious of all. Dannon has been granted the B Corp™ certification label. It means something about their commitment and that they are going to set up processes and audits to meet a certain number of fairly strict criteria. And the beauty of this label is that businesses must recertify every three years.
L’Occitane en Provence has also become a B Corp™ across several countries and brands. This takes time, and employees have to commit too. The upside is that it also has an impact on talent acquisition and retention. One must understand it’s not just consumers who suffer from cognitive dissonance. When you work for Total Energy, Shell, BP or other polluting companies, you may not feel very comfortable in your job at all times.
Decathlon Is Also Among the Leaders of the Green Revolution
You can feel that this group has a real wish and vision. It is a totally different ballgame. They also use this approach to differentiate themselves. It’s the third-largest sports company after Nike and Adidas. They also market their products under their own private labels and are streamlining their brand names at the moment. Of course, nobody is perfect. But we can see that they are making significant efforts.
Second-hand Shopping Is Booming, Too
The fashion industry is a complex one, and many have gone out of business. Most players have launched initiatives in the direction of second-hand shopping. There is also a huge demand for low prices. They have created shelf-edge programs for second-hand products. Yet second-hand shopping is challenging what with product returns and logistics. And it causes issues in terms of scalability. In France, Kiabi is one of the few retailers that are really scaling up and rolling out second-hand shopping throughout a large number of stores.
A Framework for a Green Market Revolution
It’s a framework for the marketing, strategic marketing, innovation and product departments. Our approach is holistic and cross-functional.
The idea is to align the company’s value proposition with its purpose, so that it goes beyond lip service. There must be an impact on business models, on the offering and products. Then we add ecodesign, cocreation and consumer support. This makes up for a more positive story for consumers. Beyond storymaking it also enables them to become change agents.