The Millennials’ Idea of a Sustainable Business
Millennials (the demographic born between 1980 and 2000) are currently the largest generation of consumers in history. In 2014, Millennials aged between 17 and 34 were expected to spend at least USD 200 billion each year from 2017 onwards. This age demographic is also expected to spend around USD 10 trillion in their lifetime. A 2016 survey by TD Bank revealed that the average Millennial spends USD 26,000 on discretionary items and bills every year.
Experts claim that sustainability is one of the key factors that would drive Millennials to support a company. According to the 2015 Nielsen Global Survey of Corporate Social Responsibility and Sustainability, three out of four Millennial consumers would pay more for sustainable products and services. The survey added that consumers between 15 and 20 years old patronizing sustainable products and services rose from 55 percent in 2014 to 72 percent in 2015.
Companies need to acknowledge and capitalize on this phenomenon. Given the huge number of Millennials, as well as their tremendous spending power, adjusting business operations, products and services to appeal to this demographic makes business sense.
What constitutes Millennials’ idea of a sustainable business?
Creates Products That Have Health and Wellness Benefits
Millennials were born during the height of the 1980s – 1990s “Fitness Craze.” As such, they are more health-conscious than older generations. Aetna’s 2013 “What’s Your Healthy?” study revealed that approximately 25 percent of Millennial respondents defined being healthy as having regular physical activity and eating right. In sharp contrast, only 12 percent of Baby Boomers and 14 percent of GenXers shared the same view.
This partially explains why Nike is a favorite Millennial brand and ranked second in Moosylvania’s Top 100 Brands for Millennials. Nike+ Training Club (N+TC), Nike’s free fitness app, is loaded with more than 100 workout routines from Nike trainers and athletes, which come with clear audio and visual guidance, making it easy for beginners to professional athletes to follow them. N+TC is also capable of creating a personalized training plan based upon the user’s fitness needs, which updates the training plan as the user progresses.
Uses Fresh, Natural or Organic Ingredients in their Products
Millennials grew up surrounded by books, articles and documentaries about controversy in the processed food industry, resulting in a preference for products that are made from fresh, natural or organic ingredients. According to 2013 research from the Boston Consulting Group, Millennials are expected to spend the most amount of money on fresh meat and produce, organic food and environmentally-friendly products in 2014.
In May 2016, Whole Foods opened 365 by Whole Foods Market, its new line of scaled-down stores that cater to Millennials. 365 offers healthy, organic food at lower prices, and sells fruits and vegetables by piece instead of by bulk, which is useful for budget-conscious Millennial shoppers. To make itself more appealing to Millennials, 365 has facilities such as an espresso bar, a vegetarian restaurant and a self-service tea station where customers can blend their own brews.
Commits to Generating Social Value
In addition to improving themselves, Millennials also want to improve society and the communities they live in. According to the 2015 Millennial Impact Report, 84 percent of Millennial respondents donated to charity in 2014. In addition, two-thirds said that they volunteered for at least one hour in 2014. Millennials’ altruism extends to their shopping preferences. In its 2015 study, Nielsen claimed that 56 percent of Millennial respondents were willing to pay more for the products and services of a company known for its commitment to social value.
TOMS Shoes, a highly popular shoe brand among Millennials, is strongly committed towards social responsibility. Its One for One Movement donates a new pair of shoes to a disadvantaged child for every pair of shoes that it sells. Other TOMS products are also geared towards helping those in need. Part of the profit from each pair of TOMS eyewear sold is used to fund sight-saving medical treatment for people in developing countries. Proceeds from the sales of TOMS bags go to the training and equipment of skilled birth attendants in developing countries.
TOMS Shoes likewise encourages other companies to venture into social entrepreneurship. The TOMS Social Entrepreneurship Fund provides promising social enterprises with an investment of up to USD 100,000. The TOMS Social Entrepreneurship Fund portfolio includes Change.org (an online petition platform for social issues), Laxmi (a luxury natural skincare brand that brings living-wage jobs to poor women and young people) and Thrive Market (an online grocer selling organic food and beauty products).
Implements Sustainable Policies and Operations
Businesses can attract Millennial customers by sharing their desire to improve society through the implementation of sustainable policies and operations. There are now countless sustainable business ideas, from using responsibly-sourced raw materials to sustainable disposal. These may cost time and money upfront, but are worthy investments because they will help businesses earn the trust of the largest generation of consumers in history.
Google, which ranked eighth in Moosylvania’s Top 100 Brands for Millennials, is an example of an environmentally-friendly company that has earned the trust of Millennials. The Googleplex, Google’s headquarters in Mountain View, California, is powered by renewable energy, with 1.9 MW of solar panels that generate more than 3 million kWh of clean energy each year. Google likewise invested almost USD 2.5 billion in renewable energy projects.
Google helps reduce air pollution through its green transportation system, which includes biodiesel shuttles, electric vehicles (for car-sharing) and electric vehicle charging stations. These facilities lessen Google employees’ dependence on fuel cars and, as a result, the amount of pollutants emitted. Google claimed that its biodiesel shuttles and electric vehicles help save more than 29,000 metric tons of carbon dioxide each year, which is equivalent to removing about 5,700 cars from the road, or reducing travel by 87 million vehicle miles annually.
Packages Products Sustainably
To further earn Millennial customers’ trust, companies should use packaging as a means of promoting the sustainability of their products. Packaging, after all, is the first thing that customers see in a product, and first impressions do matter. Unsustainable packaging is powerful in convincing consumers that the actual product is unsustainable as well—even if it is, in fact, sustainable.
In 2009, Coca-Cola first released PlantBottle, the world’s first recyclable polyethylene terephthalate (PET) bottle that is partially made from plants. About 30 percent of PlantBottle is made from plant-based materials, while the remaining 70 percent is made out of traditional fossil fuel-based sources. Because of its sustainable design, PlantBottle has a lighter carbon footprint than a traditional PET bottle. In 2013, PlantBottle was able to save more than 400,000 barrels of oil.
In June 2015, Coca-Cola introduced the world’s first 100% bio-based PlantBottle at the World Expo in Milan, Italy. This new version of PlantBottle is made from sugarcane and sugarcane waste materials. Coca-Cola believes that the new PlantBottle is a major step towards becoming a more sustainable business. According to Nancy Quan, Coca-Cola’s Global Research and Development Officer, the introduction of the 100% bio-based PlantBottle is a fulfillment of their vision “to maximize game-changing technology, using responsibly sourced plant-based materials to create the globe’s first fully recyclable PET plastic bottle made entirely from renewable materials.”
Millennials were clearly impressed with Coca-Cola’s sustainability efforts―the food and beverage giant ranked tenth in Moosylvania’s Top 100 Brands for Millennials.
Taking Care of the Business―and the Environment―by Taking Care of the Millennial Customer
L.L. Bean founder Leon Leonwood Bean once said, “Sell good merchandise at a reasonable profit, treat your customers like human beings, and they will always come back for more.” Customers are the lifeblood of any business, and it is vital that they are understood and their needs are taken care of. In the age of social media, it can take just one viral post, picture or comment to drive customers away from a business.
Taking care of the Millennial customer means more than just taking care of the business; it also means taking care of the environment. A sustainable business will impress Millennial customers and lead to resource conservation, workplaces conducive to promoting employee health and safety, circular economies and responsibly-sourced raw materials. These measures, in turn, lead to greater business continuity, as well as improved consumer trust and confidence―advantages that ensure that a business will thrive long enough to cater to the generations that will succeed the Millennials.
ADEC Innovations (ADEC) helps organizations recognize business drivers for sustainability practices and offers cost-effective sustainability management solutions. ADEC provides guidance on industry best practices and can help you with your sustainability programs.