Long-Term Branding Strategy

MIAMI—A new survey from RSR Research finds that better performing retailers are retooling their brands now to meet consumers' desires for more green options.

Despite the fact that many survey respondents don't yet see a big shift in consumer spending toward "green" products and services, retail winners anticipate that green initiatives now will pay off later in the form of increased sales.

According to a new RSR Research report, "What Can Green DoFor You? Benchmark 2008," despite much higher awareness among consumers about green issues, 62% of retail survey respondents said that consumers are not yet spending on "green" products. The report is available for download from RSR's Web site, at http://www.retailsystemsresearch.com/_document/summary/518.

Despite concerns that consumers aren't putting their money on the table to support greener practices, retailers are investing in green initiatives: 44% said that green practices are a strategic initiative in their company. The survey found that motivations behind green initiatives are strongly related to retail performance: while 67% of better performing retailers ("retail winners") cited ethical obligations behind their green initiatives, 76% of lagging retailers cited only cost concerns.

Retailers anticipate that actions taken now will reap future benefits in the form of increased sales. The difference in perspective leads retail winners to believe that they will reap ROI on their green initiatives in 2-3 years, while laggards are unable to put a timeline to expected benefits.

While supply chain investments and fuel-related expenditures pose big opportunities, the benchmark report also reveals that packaging and material costs, often overshadowed by concerns about fuel prices, are highly valued opportunities for retailers, along with reducing costs in stores.

"We were pretty cynical when we launched this survey. We thought that retailers would be in it only for the potential cost savings," said Steve Rowen, partner at RSR Research and author of the report. "It turns out that better performing retailers see this as both a cost initiative and a brand-building opportunity. They believe consumers' desire for green options is not just a fad and are investing now to transform themselves into green brands—even though they don't yet see consumers directing a lot of spending toward green brands."

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