Sustainability is an important value despite cost of living pressures – Monash Lens

It has been a tough few years for shoppers and retailers alike, with cost-of-living pressures on households causing consumers to rethink their budgets, limit their retail spending and change their shopping habits in anticipation of ongoing financial worries.

But while prices and promotions continue to have a major impact on consumer spending habits, there is a growing number of values-driven shoppers who are increasingly concerned about the social and environmental impact of their purchases.

To better understand Australians’ attitudes and behaviours towards sustainability, Monash Business School’s Australian Consumer and Retail Studies (ACRS) research unit surveyed a national sample of the population as part of a larger retail study, the ACRS Retail Monitor.

Findings from the latest report, released today (Monday 15 July), show that almost half of Australian shoppers (46%) say sustainability is an important factor when shopping at retail – and that consumers are becoming increasingly savvy when deciding whether a product or brand is sustainable.

Buyers decide whether a product is sustainable based on product and packaging information

Almost a third of shoppers (30%) say they frequently or very frequently look for sustainable products when shopping in retail stores, with a further 38% doing so occasionally. Only 12% of Australian shoppers say they never look for sustainable products.

Consumers are constantly having to make decisions about every aspect of their daily lives. The difficulty of the decision is generally increasing:

1. as the number of alternatives and attributes increases

2. if some attribute values ​​are difficult to process.

When deciding whether a product is sustainable, shoppers look for clues that will help them make a quick decision, and they seem to focus more on the packaging or the product itself than on the label.

The two most common criteria that shoppers looking for sustainable products use to personally decide whether a product is sustainable or not are the recyclability of the packaging (62%) and the possibility of recycling the product (59%), followed by whether the product can be reused or repurposed and whether the product is made from recycled materials (both 45%).

For sustainably oriented consumers, labelling seems to be less important: almost a quarter of shoppers (23%) rely on third-party certifications to determine whether a product is sustainable. Just under a quarter of shoppers (21%) base their decision on whether the packaging has a CO2 label (21%) or environmentally friendly packaging (18%).

Sustainable lifestyles are important to most consumers

From a lifestyle perspective, most Australian shoppers are committed to and embrace a sustainable lifestyle.

Consistent with our research from previous years, almost all Australian shoppers (96%) have engaged in at least one form of sustainable behavior in the past three months.

Most Australians said they bring their own shopping bags to stores (79%, up from 77% in 2023), recycle product waste (65%, up from 62% in 2023) and almost half said they reduce the number of new products they buy (40%, up from 41% in 2023).

The vast majority of those who engage in various sustainability practices report engaging in these practices frequently.

For example, 96% of shoppers who bring their own shopping bags to stores say they do so regularly. Similarly, nine in ten shoppers who recycle product waste say they do so frequently (92%), while almost eight in ten shoppers who say they reduce the number of new products they buy do so frequently (78%).

And the good news is that an overwhelming number of Australians say they are likely or very likely to participate in sustainable retail in some form in the future (97%; up slightly from 96% in 2023).

Younger and older Australians differ significantly in their sustainable behaviour

Australian shoppers of all ages adopt a range of sustainable practices, but the types of practices they adopt vary considerably.

Younger consumers aged 18 to 34 are more likely to use public transport, purchase second-hand products and recommend environmentally friendly products to friends, family and peers than other age groups. Older Australian shoppers aged 55 and over are significantly less likely to do so than other age groups.

In contrast, older Australian shoppers aged 55 and over are significantly more likely than other age groups to bring their own shopping bags to stores, recycle product waste and compost food waste, while their younger counterparts aged 18 to 34 are significantly less likely to do so than other age groups.

Young Australians are willing to pay more for sustainable choices

Although cost of living pressures are causing Australian shoppers to change their spending and shopping habits, the latest ACRS research suggests some shoppers are still willing to pay more for products and brands that align with their values.

Just under half of Australian consumers say they are willing to pay more for ethically produced products (42%). Slightly fewer are willing to pay more for products packaged in recyclable materials (40%) or made from recyclable materials (38%).

Interestingly, younger consumers aged 18 to 34 are significantly more likely to say they are willing to pay more for all of these product types (55%, 49%, and 50%, respectively).

What this means for retailers

While the perception and practice of sustainability may vary among individual shoppers, the positive changes in overall shopper attitudes and behavior demonstrate that sustainability is no longer a trend, but a consumer movement. Retailers that not only respond to this movement, but truly embed sustainability into their business strategy, will resonate with consumers despite the current climate.

Ethical Clothing Australia accredited brand Denimsmith is just one of these companies paving the way for sustainability by offering a “repair and rewear” service where the first repair is free for customers and each subsequent repair costs $40.

Another example is Oroton, which recently partnered with eBay Australia to encourage customers to resell used Oroton items in exchange for an Oroton voucher, thereby contributing to the circular economy.

Study note: The ACRS Retail Monitor examines the shopping preferences, attitudes and behavior of Australian consumers. Sustainability data was collected from n=1002 randomly selected Australian shoppers in June 2024.