Product Transparency, Consumer Engagement, and ROI
- Rob Kaplan, Director, Product Sustainability, Walmart Stores Inc.
- Anne-Marie Skov, Senior Vice President, Group Corporate Affairs, Carlsberg Group
- Roman Smith, Director, Sustainability Operations, Corporate Sustainability and Philanthropy, AT&T
- Elisa Niemtzow, Associate Director, Consumer Products, BSR (Moderator)
Companies have been able to demonstrate the business and sustainability benefits of greater product transparency, but to scale them, the gap between consumer intent and behavior must be closed.
Simplifying information for consumers is a key area of opportunity for companies and retailers in an era in which consumers want to shop quickly and have very little time to filter all the relevant, available business- and sustainability-related product information.
Sustainability can be a source of innovation that ultimately creates products that eliminate the need for consumers to choose between it and other core, purchase-decision attributes, such as affordability, reliability, and high quality.
“Removing complexity for the customer is a big opportunity for behavior change. The opportunity that Walmart has is to bring sustainability to the mainstream. It’s not a niche, aspirational, price-premium proposition for our customers. This is the challenge that we face, bringing this to scale.” —Rob Kaplan, Walmart Stores Inc.
“If we could reuse a can, if we could recycle a can, if we could even rethink how to use the returned can, every time there would be a return on investment for us and a benefit for society on a great scale.” —Anne-Marie Skov, Carlsberg Group
“With any rating system that you create, you have to be transparent about what your methodology is and how different devices score against each of the criteria points. This is key for us as we move into more social components and as consumers demand more and more transparency.” —Roman Smith, AT&T
Elisa Niemtzow kicked off the session by posing three central questions: Does greater product transparency provide returns to business? Does greater transparency lead to improvements in product and materials sustainability? And what are the best ways to engage consumers through greater transparency? From certification labels to eco-rankings to carbon footprints, Niemtzow explained that an increasing number of companies and retailers are making their products’ sustainability attributes more transparent to consumers, but key challenges and opportunities remain to ensure that these efforts deliver consumer and sustainability value.
Roman Smith described that greater product transparency has led to business and sustainability value at AT&T. As an example, Smith described AT&T’s eco-rating system, a program launched in 2012 to provide consumers information about the environmental attributes of the company’s products in a clear, easy-to-understand format. He described not only the reputational value that the eco-rating system has provided AT&T, but also how it has brought about new opportunities to work with device and accessory manufacturers and suppliers to develop better products. Because of this program’s success and demand from consumers for more transparency, AT&T is looking to add social components to the criteria in 2015.
Next, Rob Kaplan agreed that while greater product transparency is needed, there is the broader challenge of addressing behavior change, citing the disconnect that exists between what consumers say they care about and their purchasing decisions. Kaplan described that Walmart, which is visited by an average of 150 million customers each week, has an enormous opportunity to bring sustainability into the mainstream, but bringing it to scale would require significant behavior changes, starting by making it easier for customers to evaluate products and by improving the perceived value of sustainability. In an era where consumers are making purchasing decisions in “less than five seconds,” Kaplan said simplifying the information that consumers use to make purchasing decisions is a big opportunity for retailers.
Anne-Marie Skov built on the discussion by elaborating on the notion of engaging customers on sustainability, but in ways that are fun and demonstrate a clear ROI. Her company uses the specific example of engaging consumers on the issue of bottle and can recycling. Skov asserted that every bottle and can is a potential resource, and that engaging consumers on this idea through fun, interactive events is an effective way to increase their awareness and change their behavior over time.
During the Q&A portion, panelists recognized common challenges that persist, including the trustworthiness of product labeling schemes, as well as the challenge of working with internal teams, for example, the marketing and brand functions to communicate a better story. But panelists were equally optimistic about the future: Despite these and other challenges, they believe that sustainability can be a source of innovation that ultimately creates products that eliminate the need for consumers to choose between it and other core attributes, such as affordability, reliability, and high quality.
Niemtzow closed the session by thanking the panelists and encouraging the audience to consider how product transparency can lead to greater customer engagement and ROI at their companies.
November 5, 2014