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Greener than you think?

FIG 1 - Importance of Long-term Cost Savings to Consumers...
FIG 2 - Importance vs. Price ...
FIG 3 - Eco-Friendly importance by Income Percentage of consumers...
FIG 4 - Likelihood to Pay More by Age Percentage...
FIG 5 - Likely to Pay More by Regions Percentage...

Sometimes consumer research takes issue with the conventional wisdom. Consider the stereotype of the typical green consumer—a young, wealthy West Coast environmentalist. The data shows a big opportunity in the older, moderate-income market, especially in the Northeast.

“A lot of people think it’s only Generation X or Generation Y who care about the environment,” said Mark Delaney, NPD Group’s director of home improvement. “That’s not the case at all.”

NPD consumer research shows consumers in the higher age brackets are actually more likely to pay more for products that are environmentally friendly across several categories. (See graph 5) Also surprising is the income breakdown—consumers in the $60,000-and-under bracket put a higher importance on eco-friendliness across several categories. (See graph 4)

And while consumers in the West are more likely to pay more for green products than consumers in the South or the Midwest, the Northeast emerged as the region with the highest percentage of consumers willing to spend more, (See graph 3) a figure influenced by the need for energy-efficient insulation during cold winters.

Meanwhile, the widely circulated idea that green products must show some type of financial return to gain traction in a market is strongly supported by the statistics. More than 77 percent of consumers believe long-term savings are very important or extremely important when it comes to environmentally friendly products. Consumers look for green qualities in home insulation and major appliances more than any other category in the home, according to the research, but there’s a significant drop off when it comes to paying more. (See Graph 2)

Through it all, uncertainty reigns, according to Delaney. “There is a lot of confusion out there as to what “green” actually means,” he said. There’s also a lot of skepticism. “Consumers feel that manufacturers and retailers may be taking advantage of the movement to increase sales,” he said.

The result of that skepticism is the emerging area of green education. “Consumers are looking to retailers and manufacturers to cut through the clutter and provide them with more information as to why products are labeled as ‘green,’ and how much the product will save in terms of energy, dollars or waste,” he said. “The manufacturers and retailers that best leverage education will be the first to reap the benefits.”

OTHER FINDINGS:

Compared to two-person households, households with three or more people show a sharp drop in the likelihood of spending more for environmentally friendly products. In major appliances, the likelihood rate drops to 47.7 percent, down from 55.4 percent. In small appliances, it’s 28.6 percent, down from 32.8 percent.

Home insulation (72.3 percent) and major appliances (70.1 percent) were the categories most often deemed very important to be environmentally friendly. Following them were lighting (61.8 percent), home paint (5.3 percent), carpet & flooring (46.8 percent), lawn mowers (45.4 percent) and small appliances (41.2 percent).

Methodolgy

The above findings are based on an August 2007 study that drew responses from 9,702 consumers.


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