By Bob Meers
published on Nasdaq April 17, 2023
Data from McKinsey shows that 88% of Gen Z are doubtful about businesses’ eco-friendly claims, and products that made sustainability-related claims averaged 28% cumulative growth over the past five years compared to 20% for products that made no such claims. GenZ is demanding greater corporate accountability to combat greenwashing, and is highly skeptical of marketing claims in this area. With spending power of $140 billion, engaging GenZ is something retailers are eager to understand. Some tips for the visionary CEO looking to take this on:
1. Foster a culture of transparency – In order to enlist today’s consumers, it is essential to make public verifiable data and third party test cases of your product. To do this, you will need to engage third-party agencies to validate your claims, provide visible proof of this validation on packaging and provide the basis for this validation in your marketing, thereby bolstering your credibility. Members of this younger generation have put the onus back on companies to substantiate claims and follow through with future commitments. By adopting these practices, businesses can successfully appeal to environmentally-conscious and discerning consumers.
2. Understand that Gen Z does not want to be marketed to – Data from Statista shows that 45% of Gen Z say that brand transparency and trustworthiness are major motivating factors for engagement. Create a clear marketing message about what your brand values are to show younger consumers that you value brand loyalty AND understand that loyalty will be hard won. What may have worked in the past isn’t working anymore: hire your target customer, someone who genuinely understands how to craft a message that will resonate in the forms or media they trust. Build from within a community that understands what makes this group tick.
3. Commit to continuous improvement – Regularly evaluate and update your sustainability initiatives to stay current with best practices and advancements in new materials, manufacturing methods, and supply chain efficiencies. Create a culture of learning, encouraging your employees to stay up-to-date with industry news and developments by attending webinars, reading industry publications, and trying new ways of working. The corporate and manufacturing movement to sustainability is in its infancy. What exists today is going to be antiquated tomorrow.
Just in the last decade, state of the art sustainability in plastics, for example, has moved from recyclable petroleum plastics to plant sugar based commercially compostable PLAs to fermented PHAs, and from lab-scale material production to material available at industrial scale. Encourage your team to seek strategic partnerships and lean into new concepts and processes. Collaborating and networking with other manufacturing companies, research institutions, and universities can provide access to new ideas, technologies, best practices, and new solutions.
4. Be willing to let go of the past – A 2023 CB Insights study finds that failing to pivot is one of the top 20 reasons startups fail. Innovation comes when you no longer follow. Many companies get bogged down trying to tweak what already exists rather than take a risk and create disruptive innovation. It is naïve to think that innovation is going to look like the problem or be cost efficient in the beginning – the goal here is to recognize opportunities as they come and make the willingness to be transformative part of your organization’s DNA.
5. Collaborate with experts to build third-party credibility – As CEO, you are valued on innovation, your vision, and your integrity. Encourage sustainable practices within your organization, from the top-level management down to employees. Your company must take the time and spend the money to validate your product’s claims. If you are pioneering a product in a new material that claims to be biobased and fully compostable, you must commit the time and money required to have third party labs test the product in real-time, and make the results available to your customers. Partner with environmental organizations, scientists, or sustainability consultants to develop and implement effective eco-friendly practices and strategies. According to a Deloitte 2023 Manufacturing Survey, more than 60% of surveyed executives are partnering with specialized technology companies to further their smart manufacturing initiatives in the coming years. By embracing the power of strategic third-party institutions, you will be able to provide validation, credibility and an authentic viewpoint to stakeholders.
6. Don’t be afraid to embrace academia: Many of our greatest inventions were born in a university-based think tank or laboratory. The best educational institutions foster innovation and creative thinking but not the framework to bring successful ideations to market.
A look ahead: the power of new mindset
The consumer space is rapidly changing, with a new generation of environmentally-conscious and skeptical consumers demanding greater transparency, accountability, and sustainability from brands. To adapt to this shift, executives must embrace a culture of transparency, challenge outdated marketing tactics and embrace a transformation mindset. By fostering a genuine commitment to sustainability and understanding the values of younger generations, companies can not only strengthen their credibility but also secure their place in a future driven by responsible business practices. This commitment is also requiring a shift in perspective and a willingness to let go of the past. The journey towards accountability and transparency may be challenging, but the rewards – a resilient business, loyal customers, and a healthier world – make it an essential endeavor for today’s forward-thinking organizations.
Bob Meers served as CEO of Lululemon Athletica, Inc., from December 2005 to June 2008, taking a small yoga apparel business to a billion dollar international public enterprise. Before that, Meers served as president and CEO of Syratech Corp., a Thomas H. Lee portfolio company. During Meers’ 15-year tenure at Reebok, the company grew from $13 million to $3.5 billion sales, during which time Meers built significant shareholder value by establishing the Greg Norman and Rockport brands. Meers served as President and CEO of Reebok International from 1996 to 1999.