Blog | 04 Nov 2021

UK companies must adapt to changing consumers’ behaviour

Phil Thornton

Economics Editor

In the run up to Cop-26 much discussion has centred on the central role of UK businesses and government directives in addressing challenges associated with climate change and environmental sustainability more broadly.

But what about another key stakeholder group—consumers—whose preferences and habits will both directly and indirectly (through their influence on businesses and government) shape our environmental future? Drawing on recent research, we look the role of UK consumers through the lens of three key lifestyle domains—shopping, travelling and eating.

UK consumers are pivoting away from fast fashion

Few behavioural shifts have been as stark during the pandemic as the switch to online shopping. But within that, there have been more subtle shifts. Our research, on behalf of Clearpay and the British Fashion Council, suggests that a majority of UK consumers regard “environmentally conscious fashion purchases” as an important part of the shift towards a lower-carbon economy (Fig. 1). Indeed, we found evidence that this has had a discernible effect on consumers’ shopping habits, with a majority (62%) of UK adults citing “long-term wearability” as an important guiding force when purchasing clothes.

Fig 1. Perceived importance of lifestyle choices for shifting towards a lower-carbon economyWPCconsumberfigure

However, a transition towards more durable, locally sourced items will inevitably entail higher prices. Here, our survey analysis highlights that the pandemic has exacerbated the challenge as price-conscious consumers are much more likely to indicate that their financial situation had worsened during the previous 12 months. Moreover, there is reason to fear that this trend will worsen this year given inflationary headwinds and an impending tightening of fiscal policy.

Holidaymakers have embraced the lure of home

The pandemic restrictions, particularly for air travel, led to a sharp rise in the number of “staycations” in advanced economies as families holidayed at home rather than abroad. For example, research by Oxford Economics’ Tourism Economics shows that prohibitive travel guidelines by European countries in the summer of 2020 led the domestic share of travel journeys to rise from 55% in 2019 to 69% in 2020. As restrictions are lifted there will undoubtedly be a resurgence in foreign travel as people take holidays they missed out on. However, many families who have taken a staycation for some—or perhaps the first—time, may wish to continue to holiday at home rather than create more greenhouse gas emissions by flying abroad.

Meat alternatives to benefit from dietary and climate change concerns

The disruption to fresh meat supplies in the UK in the midst of the Covid-related supply chain crisis had added to consumers’ concerns about the dietary and climate-change impacts of our reliance on a meat-based diet. The latter point is certainly backed by scientific evidence—the statutory Climate Change Committee has said the amount of meat people eat in the UK needs to be brought down by more than a third by 2050 as part of the country’s drive to net zero.

One way to mitigate the impact of meat consumption on the environment, without a significant shift in our dietary habits, is through a switch to cultivated (lab-grown) products. Life-cycle analysis has demonstrated that this would significantly reduce the carbon footprint of production compared with conventional farming methods.

In a study we did for Ivy Farm Technologies, which is developing cultivated meat, we found the market could be worth £1.7 billion a year in the UK and support as many as 16,500 jobs by 2030, many of them highly skilled. It would also have the benefits of reducing the UK’s dependence on meat imports and lead to improvements in levels of human health, animal welfare, and sustainable farming. Although the industry is awaiting regulatory approval in the UK, companies are seeking to get ahead of an emerging consumer trend by developing meat substitutes to meet expected future demand.

Companies must explore ways to rebuild trust with customers and clients as their behaviours and preferences change in the wake of Covid-19 and amid a growing desire for sustainability. Firms that can double down on reducing their carbon impact as they emerge from the crisis by adjusting their operations, while adapting to these fast-moving customer demands, will be rewarded with greater brand loyalty and long-term competitiveness.

You may be interested in

Post

Climate risks are severe, but a new ‘green economy’ offers a $10.3tr opportunity

The World Economic Forum’s annual risk survey shows that climate inaction makes up the top four of its 10 most severe global risks over the coming decade. On the same day that the WEF findings were released, new analysis was published into the opportunities the world’s transition to a greener economy would represent for businesses and investors prepared to make the changes needed.

Find Out More

Post

Key climate themes businesses need to focus on in 2023

Firms must make better use of information and advice to ensure they can exploit the potential benefits and avoid the threat of losses from climate change

Find Out More
The global green economy

Post

The Global Green Economy: Understanding and capturing the opportunity

As each year passes, the climate emergency facing the planet becomes ever more alarming. But this trajectory is increasingly being met by the rapid emergence of new technologies and expertise that are focused on tackling it. As a result, we can now discern the emergence of a future green economy; one that harnesses human ingenuity to protect the planet’s future.  

Find Out More