Getting to price parity

Getting to price parity

One of the key refrains I’ve heard at this year’s Sustainable Brands conference is that “we must get to price parity.”  Mainstream consumers have told us loud in clear (both with their shopping habits and in no uncertain terms in focus groups) that they won’t pay more for the greener option.  The good news is that they often do say if the green thing and the conventional thing are the same price, they’d lean towards the green thing (provided it performed as well as the green thing, which is a whole other issue).

So, many of us at the conference are throwing around a lot of bold sound bytes about this predicament.  The Shelton quote is “we’re punishing people for good behavior.”  Ogilvy refers to it as a “tax” on green products.  Awesome — we’re doing an excellent job of stating the problem.  The question from the manufacturing world is “yes, but how?”

I was asked this question twice at the end of my session yesterday and also asked if there are any companies or categories that are getting there.

My answers were “innovation” and “appliances.”

When the ENERGY STAR specification first launched, nearly every appliance manufacturer decried the standard too stringent, too hard and bemoaned that “sure, we can hit it, we can make our machines that efficient, but they’ll be so expensive nobody will want to buy them.”

In fact, they all figured out how to make their products more efficient and keep the pricing affordable.  Some would say today that even though the ENERGY STAR standard has gone through several iterations, demanding a higher level of efficiency each time, the label is now on so many appliances it’s lost its meaning.  (Our Energy Pulse data shows this isn’t true, in fact.  Despite the proliferation of the label, consumers still see it as a highly trusted mark to help them buy products that use less energy.)  The point is that “making a greener product affordable” seemed impossible in the beginning…and it turned out to be possible.

Yesterday an enthusiastic fellow named Jason handed me his solution to the price parity problem:  Replenish, a multipurpose cleaner in a sturdy, reusable plastic bottle with a little pod attached to the bottom.  The pod contains concentrated cleaner, which allows a consumer to make four bottles from the one, adding her own water.  When the pod runs out, she just buys another pod and reuses the bottle.  So…she gets a green cleaning product at the same price as a conventional product.  Now, the question remains:  will a mainstream consumer suffer through the terrible inconvenience of having to squeeze out the concentrate, walk to the sink, run some water and make the cocktail?  (Sounds silly, I know, but she also wasn’t willing to endure the sound of the compostable SunChips bag…so I’m a little worried about whether mixing a cleaning product will seem too inconvenient.)  The product design is cool, the bottle is sturdy (and made, I think, from easily recyclable plastic from our friends at Eastman) and the argument that it’s less plastic in the landfill is compelling to a mainstream consumer…so it may well have a shot.

The point is, it’s an innovation.  It’s a new approach for the cleaning category and a solution to the green “tax.”  It’s this kind of thinking that will solve the pricing barrier and get more mainstream consumers on the green train.

 

About the Author

Suzanne Shelton

Where Suzanne sees opportunity, you can bet results will follow. Drawing on her extensive knowledge of both the advertising world and the energy and environment arena, Suzanne provides unparalleled strategic insights to our clients and to audiences around North America. Suzanne is a guest columnist in multiple publications and websites, such as GreenBiz, and she speaks at around 20 conferences a year, including Sustainable Brands, Fortune Brainstorm E and Green Build.

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