Green Consumerism: Spurring Growth within the SME Retail Space

Confessions of a Shopaholic, a novel published in the year 2000 sold over 3 million copies and went on to inspire a Hollywood blockbuster. Two decades later, even the title seems redundant. Consumers are consciously moving away from hoarding their homes with things, luxurious or otherwise. The modern consumer is discerning, conscious, and aware. Green consumerism is on the rise, and people now want products that are high-quality, good for their health, and don’t harm the environment. Eco-friendly products such as organic food, beauty products, and fashion/home decor that reduce waste generation and chemical usage, are constantly witnessing a rise in demand.

Why Green Consumerism is Good for SMEs?

Green consumerism is not a marketing-driven trend, but a new way of life for the masses. With the impact of climate change becoming apparent, there is a greater need to focus on sustainable agriculture and manufacturing that can contribute to the reduction of emissions and slow down environmental degradation. Businesses that tap into this need through organic farming, chemical-free products, and emissions-free services are able to become known as community and customer-centric labels. Consumers trust them and the fact that agile green SMEs can innovate, pivot, and create better-customized solutions, gives them a unique advantage over large legacy brands.

Challenges Faced by Green SMEs

Despite green consumerism on the rise, SMEs face a lot of challenges in their attempts at sustainable transformation. One of the biggest hurdles they face is the high upfront costs required to undertake the building of a retail chain and infrastructure for supply chains. Often, entrepreneurs launch retail outlets after investing a lot of money, and it's challenging to reach out to the target audience across larger coverage areas. Further, unstructured outlets also face credibility issues as audits, certification and verification of product claims are complex, costly, and time-consuming. This is why many of the SMEs have been struggling to get going in the green economy despite favorable consumer sentiments.

Impact Made by Green Marketplaces

Green aggregator marketplaces that bring together multiple SMEs in the sustainability arena have been able to make a significant positive contribution to their growth. To begin with, they deploy the most advanced supply chain management technologies including software and logistics to help SMEs manage end-to-end retail of their products and services. Second, as large marketplaces, they have been able to provide much-needed visibility for brands and enable them to reach customers wherever they are. The third and probably the most important advantage of operating in collaboration with such green marketplaces is that they offer extensive and multi-layered product evaluation and certification of the brand claims. For instance, in a recent survey, about 90% of the respondents were open to opting for dedicated marketplaces for buying clean and green products owing to the trust factor. About 1 in 4 consumers surveyed said they have shifted to such marketplaces.

Green SMEs that have Built Successful Brands

Hundreds of brands operating through the marketplace models have carved successful brand images powered by their customer-centric approaches. Names like True Elements, Yoga Bar, The Whole Truth Epigamia, Earth Rhythm, Vahdam, Nourish Organics, Soulfull, Pristine, Shumee, Super Bottoms, Phool, etc., have become quite popular among their audiences. There is a steadily growing demand for environment-friendly cleaning products, zero-waste goods, and products that sustainably address the needs that remain unresolved by large format e-commerce marketplaces. Green marketplaces are enabling sellers to build strong relationships with their suppliers and highlight their products through social media and other digital campaigns to expedite brand growth.

Market Boosted by Clean Living Habits

All it took was one pandemic to make everyone realize the importance of clean and sustainable living. From the fabric used in their clothes to what goes into the cleaning products they use at home; consumers are not just concerned about the health of their own families but of the environment at large. Ethical, clean, and conscious are no longer just buzzwords and the trend is driving D2C brands to pivot from their existing offerings to take a more sustainable approach. Circular living is another high-impact practice that is rapidly being adopted by consumers globally. The idea is to not let the used products, especially in areas such as fashion, household items, furniture, décor, packaging, etc., pile up the landfills.

Government Support

Policymakers and the government are supporting the conscious consumerism trend through initiatives like ‘Aatmanirbhar Bharat.’ It is enabling local businesses to produce and make local through materials and ingredients sourced naturally and organically. Brands are also supporting only green and clean products on their platform ensuring that consumers get only healthy and eco-friendly things. Apart from manufacturing support and initiatives to verify the genuineness of the claims, governments at the central and state level are also focusing on boosting the circular economy. More support in the form of tax incentives and low-interest priority lending etc., for green SMEs, can be expected in the years ahead.

In Conclusion

Sustainable products and lifestyles are becoming a practice with time. An entire generation is undertaking this shift towards conscious and energy-efficient living and brands are following suit by offering them the choice of products that enable this transition. Customers are keen on consuming products that are manufactured, grown, or procured sustainably, and are reusable/recyclable. With green marketplaces, SMEs that bring such products and services to the table, are going to achieve further growth in the years ahead!