The correlation of sustainability and brand strength

At the SXSW event at House of Creative Denmark, we discussed the correlation between making a fundamental green transition to a sustainable business model, the risks involved, and the challenges of communicating this transition to consumers without greenwashing. In this article, I will share my key takeaways and view on what it takes to win the trust of your consumers in the future.

We need to communicate more to algorithms and less to people

A lot of choices are already made for future consumers. The product offerings consumers are presented to in their feeds have been heavily filtered by AI before reaching the end consumer. This tendency will only increase in the future, as the Alpha and future generations are likely to trust technology more than Millenials and Gen Z. Today, 74% of American consumers use virtual assistants to purchase online (Fjord Trends 2022). A number that is likely to increase. This means that branding will be more invisible and integrated into the technology supporting digital branding and require other branding skills.

How brands communicate to algorithms that guide, consumer behavior will have to be explored further. Some experts in the field question whether this development will be the end of branding. However, the question is whether you can call it branding if two machines simply exchange information. On the contrary, as AI evolves and becomes better to pick up on consumer sentiment, branding targeted algorithms will still be able to play on sentiment. However, there are divergent perceptions of how advanced AI will become in terms of capturing consumers' sentiment through data other than words, like imaging in the future. Either way, branding in the future will benefit from communicating to virtual assistants rather than consumers.

Chatbots integrated with NLP (Natural Language Processing) to understand customers in real-time and start a dialogue with them in their language. Through NLP, a chatbot can process the intent behind what the customer has said. It provides an understanding of what the customers are saying through conversations or social media interactions. This helps track customers' preferences, purchasing behaviour, sentiments, and feelings.

Consumers crave information

One trend that we see when trying to decrease the carbon footprint in the consumer industries is that of lab-grown produce – everything from meat to diamonds can be created artificially. However, depending on what product we're talking about, it will take time for people to get used to the thought. That being said, humans have a history of changing perceptions over time. This, too, will be needed in terms of getting used to products grown in a lab. When we're talking wearables (like Pandora diamonds), it will take less getting used to than for edibles, such as meat. What Pandora is doing, developing jewelry made of synthetic rocks and reused gold and silver, is genuinely transformative, and first movers may very well be open to these types of changes.

There is a big job in communicating the transition to consumers, as a green transition doesn't happen overnight. It should not be underestimated how much consumers crave being informed of the carbon footprint of their choices. And, in this, it's imperative to stay away from greenwashing. The good news is that Pandora's dialogue with their consumers suggests not to be afraid from articulating how difficult sustainability measures can be, especially when the transition needs to happen slowly. The bottom line is to stay honest be transparent about the numbers, the calculations, and the choices based on those data.

Last but not least, brands must learn to make it easy and convenient for consumers to buy convenient, sustainable products. Today, the market is a jungle when it comes to figuring out the carbon footprint of one’s purchase. It's incredibly confusing, time-consuming, and challenging for consumers to make the 'right' choices. Several startups like Dutch Dayrize, providing services to reveal the carbon footprint of purchases, provide different results when searching for the carbon footprint on a flight from Copenhagen to Bangkok with no stopover. This is a testament to how difficult the carbon footprint equation is. It is a must for companies to make it easy for consumers in the future to make informed choices and be transparent about the carbon footprint, including the complex equation.