Adrian Gonzalez of Arc Advisory Group, wrote an article in a recent newsletter which begins with:
I was listening to the radio this morning and an ad played for the station, promoting how they play today’s hit music, with few commercial interruptions. The promo, voiced by a woman with a soothing voice, ended with what I’m guessing is the station’s new tagline: “92.9 WBOS, A Carbon-Neutral Radio Station.” What the heck does that mean, I wondered. It seems like everybody is jumping on the “green” bandwagon these days, including everyone in supply chain management.
I thought this was pretty funny, but he goes into some of the take aways from the presentations that were given at the CSCMP conference on sustainability. The final summary was speculating on whether consumers would actually pay more for green products. This is an interesting question that will be asked for a long time.
Are consumers willing to pay more for green products? This is the million dollar question, and most people think the answer is no, except for certain niche products. It’ll be interesting to see what happens to the toy industry this holiday season, after the ongoing recalls of toys manufactured in China containing lead and other toxic substances. Then again, consumers haven’t cared much that Apple’s iPhone contains brominated flame retardants (BFRs) and polyvinyl chloride (PVC), toxic substances that other phone manufacturers have eliminated from their products. Apple has sold over 1.4 million units since the end of June, and analysts forecast strong sales during the holidays. At the end of the day, consumers vote with their wallets; if we don’t change our buying decisions, why should companies change their practices?
I have to say that I probably agree with this, especially on a consumer cost curve the goes up. In fact, its probably more like a bell curve that inexpensive items and luxury items will have the consumer decision effected by environmental conscience, but the wide middle ground will not. This leaves companies to plan for, and benefit from, cost savings only through effective supply chain sustainability for most of their products. Sales will probably not change from these changes.
Last week, my wife (growing increasingly disturbed by the amount of consumables in our house), came home with 5 nylon shopping bags from Meijer. I found this concept fascinating, it works because every one wins. My wife’s guilty conscience is briefly soothed, while the execs are grinning behind closed doors about the fact that they:
1. just lowered their costs by purchasing less paper and plastic bags,
2. charged the client a voluntary “tax” for shopping at Meijer, essentially turning the shopping bags into a profit center, and
3. get to do it all with a straight face of becoming more environmentally friendly.
I would be pretty proud of myself if it was my idea and some body probably got a promotion because of it.