April 19, 2008

Successfully Enticing LOHAS Consumers to Grocery Stores

As grocery outlets try to lure customers by offering greater selection, price reductions and differentiating shopping experiences; environmentally- and socially-conscious philosophies are key factors to the LOHAS consumer. According to NMI’s LOHAS Consumer Trends Report, LOHAS consumers are defined as:

• 19% of the U.S. general population adults (40 million U.S. adults)
• Socially responsible
• Driven to protect the environment
• Avid users of green products.

Companies that target LOHAS consumers must first commit to acting as good environmental stewards. This means not just sponsoring environmental causes or groups but acting as a role model in all aspects of its business. From offering eco-friendly products, working to reduce its carbon footprint, reducing waste generated by daily operations, to adhering to fair and equitable work environments, companies should always remember what they do is just as important (sometime even more) than what they say.

That is not to say companies should not let the public know what they do. In fact it is imperative that its “green” activities are meaningful, memorable, and relevant so that consumers, and especially LOHAS consumers, are fully aware of the importance placed on sustainability.

Companies must be careful not to be perceived of “greenwashing.” Companies’ communications will require a new level of sophistication and clarity as consumers increasingly discern those companies that are truly proactive versus those that are participating for superficial reasons. The eruption of companies attempting to gain credibility as good corporate citizens has led to a situation where consumers are overwhelmed with public relations campaigns and are unable to distinguish one from another. Companies that are doing relatively little with respect to CSR are perceived as just as responsible as those who have spent millions of dollars incorporating sustainability into their businesses.

Gaining the trust and admiration of LOHAS consumers will ultimately pay off as they are above average shoppers and are extremely loyal to preferred companies. Almost three-quarters of LOHAS consumers agree that they will usually buy products from companies whose values are most like their own.

As shown in Figure 1, companies with values aligned with LOHAS consumers such as Trader Joe’s and Safeway are gaining more sales than grocery outlets that do not measure up to LOHAS consumers’ tough standards. Besides being a leader in offering organic and natural foods, Trader Joe’s corporate philosophy is strongly tied to the environment and sustainability. Safeway has also attracted LOHAS Consumers by its commitment to healthy eating, wellness and animal welfare. Additionally, Safeway has concentrated sustainability efforts on renewable energy usage, transportation efficiency and bio-diesel truck conversion, and store/distribution recycling programs.

Figure 1

Harnessing the purchasing power of LOHAS consumers requires grocery stores to offer a variety of healthy food choices and environmentally-friendly products as well as true company transparency and believable CSR activities. Companies that do not focus on all of these areas will not reap the rewards that LOHAS consumer offer.

Patti Marshman-Goldblatt is a Senior Vice President at NMI. She brings 25+ years of marketing and research expertise to her position at NMI including senior leadership at The Nielsen Company in both Spectra Marketing and Homescan.

The GREEN Retail Conference - June 4-5 - Las Vegas

Retailers, Developers and Eco-Business Leaders...learn about green retail trends, consumer buying habits and sustainable business practices. Register NOW to Attend!

Take Green Leaders Survey. Receive Carbon Offset Gift Card.

The 2008 Green Leaders Survey collects sustainability program insights from business and civic leaders. Learn from peers what works and what doesn't. Take survey>>