Модель покупательского поведения миллениалов в России на примере рынка зеленой продукции

1.1. Consumers understand the responsibility for environmental changes
There are many trends that shape consumer behavior nowadays and environmental concerns are among the biggest. Big industrial jumps from previous century, growing population, household income and Internet penetration contributed to rise in consumption of all services and goods. However, such progress came at a cost as its consequences intervene the lives of ordinary consumers on permanent basis: a part of daily routine of many Chinese citizens is to check Air Quality Index to decide whether they need a mask to protect lungs from smog before they get out (Deutsche Welle, 2017); multiple studies (Cox, 2019; WWF, 2019) predict that people consume around 245 grams of microplastic each year, which equates to literally eating a credit card every week – tiny bits of plastic get in the food from oceans, processing and packaging. In fact, Ivanova (2015) reported that household consumption is responsible for more than 60% of global greenhouse gases emissions and between 50% to 80% of total resource use. While many consumers can observe only first order effects like smog generated by transport traffic, they severely lack understanding of second order effects like meet producers which on average use 15,5 tons of water to produce 1 kg of beef (such drastic amount of water is explained by the fact that grain requires watering to grow, but cows are not efficient at converting the consumed grain into actual meat). As Ivanova (2015) concludes in her research: “A significant portion of the emissions and resource use are embodied in internationally traded commodities.” However, general awareness has spread over the years and currently more consumers than ever understand their responsibility for environmental changes. This paper intends to analyze the efforts of Russian millennial consumers and understand what measures they take to contribute to sustainability. But
firstly, it is important to set up terms in order to avoid confusion.
1.2. Term disambiguation: sustainable, green and eco-friendly
The meaning of the word “green” has long outgrown the color. It is now frequently used
in a colloquial speech to apply to almost everything related to benefiting the environment: from the movement to architecture and fashion (Simons, 2018). “Eco-friendly” is defined a little less broad and distinguishes products that do not harm the planet. “Eco-friendly” is frequently used in advertising materials since it is the best grasped word by consumers (Smith, 2012). Though businesses actively employ “green” and “eco-friendly” terms in advertising campaigns and labeling to underline some environmental benefit coming from their products, the amount of such benefit varies greatly. “Sustainable”, on the other hand, is the most strictly defined term and the
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one that has the highest standards. The Oslo Symposium (1994) proposed a working definition of sustainable consumption as “the use of goods and services that respond to basic needs and bring a better quality of life, while minimizing the use of natural resources, toxic materials and emissions of waste and pollutants over the life cycle, so as not to jeopardize the needs of future generations”. Although past research (Shamdasami et al., 1993; Chan and Chai, 2010) was found to include “sustainable” into “green”, current research does not do so because truly sustainable products are very rare; rather some products are more sustainable among their alternatives (Simons, 2018). Thus, sustainable includes “green” and “eco-friendly”, but “green” may not be sustainable. To identify a particular product as “green”, the whole value chain should be analyzed. For instance, a product made from renewable resources is considered green, but if it required much energy for production and distribution, and/or not recyclable, then it cannot be considered sustainable. Some examples of green products include organic products, energy efficient light-bulbs, paper bags, footwear made of recycled rubber and plastic etc.
Throughout this work the author uses term “green” to signify product that benefits the environment on at least one stage of its life cycle, be it raw materials, production process, distribution, use or disposal. Products that benefit the environment on all stages are considered not only green but sustainable. It means the item or action is generating environmental, social and economic benefits, while not using too many resources or causing pollution. In other words, the process can be repeated many times without altering surrounding ecosystem, so that future generations are not compromised on their life quality.
1.3. The trend of responsible consumption in the Russian context
Nielsen (2015) research of Russian consumers pointed out that 61% of respondents are
ready to pay premium for products that treat environment in a responsible manner, it is just 5 p.p. lower than world’s average. Moreover, in 2014 the same research discovered only 38% of eco- oriented Russian consumers and 55% worldwide, therefore suggesting growing trend of responsible consumption. Interestingly, Nielsen (2015) also highlighted that there is no direct correlation between willingness to pay premium for eco-brands and monthly income of respondents. However, numerous studies (Padel and Foster, 2005; Vermeir and Verbeke, 2006; Connell, 2010; Gleim et al., 2013) indicate that price acts as a significant barrier towards actual green purchase behavior. In Russian context Shabanova (2017) suggests that higher price of eco- products is among key barriers in converting traditional consumers to ethic ones as 49% of traditional consumers were not going to pay premium for almost anything and 16% were undecided. Additionally, 40% of Russian ethic consumers had shown the willingness to pay
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premium but no more than 5%. Finally, the author mentions that consumers with lower income are twice as engaged (42%) in non-market sustainability activities such as separate garbage collection as consumers with higher income (23%), meaning that Russian ethic consumers with lower income still behave environmentally friendly but do so outside the market.
1.4. Rising awareness of environmental footprint
The Collapse of Soviet Union was in line with the birth of new generation of millennials,
characterized by high application of digital technologies, strive for work-life balance and flexible schedule, impact orientation and correction of mistakes made by previous generations. The highest Internet penetration rate together with social networks and fastest means of information sharing brought us on hand access to everything, while the verb “to google” has reserved its place in Oxford dictionary meaning “to find information about something via google.com”. Thus, millennials are more educated consumers, which implies that, besides other knowledge, they better understand the impact of their behavior on surrounding environment. Shabanova (2017) found that 87% of respondents receive information on sustainability issues via tv, while 45% and 22% via Internet and newspapers. However, the author analyzed consumers of several generations (18 to 60 years old), not just millennials. Thus, online media, social networks and Internet are believed to play more important role for millennial generation than traditional media sources (Skolkovo, 2019). For instance, Nielsen (2018) shows that sustainable shoppers in the U.S. are 67% more likely to be digitally engaged and their devices play significant role in frictionless experience between on and offline shopping.
1.5. The role of millennial consumers
The study specifically considers millennial generation since it shows higher sensitivity
towards environmental issues comparing to baby boomers and generation X. For instance, US millennial respondents in the survey conducted by Nielsen (2018) were twice as likely to change their consumption habits to reduce impact on the environment, showing 74% likelihood against 34% for baby boomers. The same study suggests that millennials are more likely (53% vs 34% for baby boomers) to stop purchase favorite brand and switch to environmentally friendly one. Millennials represent 51% of those who will pay extra for sustainable products and 51 percent of those who check packaging for sustainable labeling (Nielsen, 2014).
However, Ginsberg and Bloom (2004) point out that, consumers of all age groups, in general, are not ready to sacrifice anything for green products, instead they expect to obtain more benefits such as: financial savings, health benefits or lesser environmental footprint with the same
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performance. Smith (2010) concludes that millennials will advocate for brand or particular product if it brings additional value for them and benefits the environment at the same time.
Therefore, millennials, who are more perceptive towards sustainability issues, become core work force and financially independent consumers with distinctive values: they shape their attitudes and alter behavior to lessen environmental footprint, thereby imposing higher requirements on products and services. Research suggestions of past research (Uddin, 2018; Joshi and Rahman, 2015; Chen, 2012; Smith, 2010) point towards the necessary investigation of green purchase behavior in different cultural, geographic and demographic settings as well as longitudinal studies to account for factor development.
1.6. The relevance of the research
Although sustainability issues originate back in previous century, the trend only begins
pacing in Russia. Even if it is acknowledged on the level of United Nations’ protocols and conventions, considerably less progress has been made when it comes to actual policies and ordinary consumers (Avdeeva, 2020). In general, Russia lacks legislative framework for regulation of production, distribution and utilization of goods and certification of organic-based products; infrastructure for separate garbage collection and recycling of common types of solid waste including plastics, cardboard, metals, glass, fabric and hazardous waste; business incentives for adoption of pro-environmental practices and business models (Skolkovo, 2019). Thereby, since the trend of sustainability in Russia only begins pacing, there are 4 main reasons that explain the relevance of current research.
Firstly, the empirical evidence suggests that green trends indeed impact consumption and this impact only increases: 83% of respondents from survey conducted by PwC (2019) care about sustainability, while 44% directly search for green products, read reviews and join healthy lifestyle communities. The same survey also says that around 32% of Russian consumers actively avoid plastic where possible and 29% either look for eco-friendly packaging or try to find less-packaged products. In addition, Russians are more likely to care about the traceable origin of products than their global counterparts (29%). Only 3% of consumers buy eco-friendly products impulsively (Ecological Union and Eco-bureau GREENS, 2018), which underlines the fact that most consumers take informed decisions under green trend. Additionally, experts from Skolkovo Sustainable Business Centre (2019) claim that the gap between declared willingness to buy sustainable products and actual buying differs from 2 times in developed countries to 10 times in developing countries – Russia’s growing economy serves as a premise for the gap decrease.
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Second, most companies still do not address those trends since they provoke costly changes in business operations and compliance to higher requirements. On the other hand, Skolkovo (2019) suggests 2 ways business can grow by following green trends: by basing competitive advantages on pro-environment parameters of the product and/or by occupying new niches with higher growth rates and thus increasing overall market share. However, companies understand that active and even proactive position of responsible consumers makes them difficult to work with. On the one hand, such consumers can attract new clients, but on the other hand, if responsible consumers are seriously disappointed with a brand, they may boycott it, which will draw the attention of general public through social networks and other communication channels and create more problems than benefits for a business (Skolkovo, 2019). Reputational risks combined with the gap between claims and actual green purchase behavior make companies postpone green projects and maximize their efforts on cost saving or quality-focus strategies both of which usually are not aligned with sustainability. Following the model of economic cycles, which stipulates that every economic expansion is followed by downturn, crisis and recovery, businesses often prefer to maximize short term gains and predictable streams of revenue, which makes eco-friendly projects lie on a shelf for another couple of years. However, Russian economy does not bounce back as quickly as it did in 1998 and 2008, which again underlines the importance of long-term sustainable projects over short term profit making.
Thirdly, there are barriers which slow down green consumption. According to Blake (1999), barriers may be classified as individual or institutional/social barriers. Among particular constraints that halt pro-environmental behavior Blake lists an individual’s lack of time, money, information, mistrust in institutions and strengths of habits. Kollmuss and Agyeman (2002) suggested that primary motives such as environmental responsibility are often overridden by selective motives such as personal comfort. Additionally, the authors outline old consumption habits as underestimated and very strong barrier to pro-environmental behavior: customers tend to fall for default choice or avoid decision at all upon facing uncertainty. Moreover, when it comes to institutions and business side, the situation gets even trickier. According to Laroche et al. (2001) 666 out of 907 respondents were undecided consumers who were not sure about whether they would pay a premium for an ecofriendly product. Shiffman and Kanuk (2003), Wang (2017) proposed that these skeptical consumers did not believe in green policies of producers, questioning the effectiveness or products or perceiving their marketing campaigns as greenwashing, a phenomenon that prescribes opportunistic behavior regarding environmental trends to manufacturers and service providers (Westerveld, 1986).