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Consumers Opportunities of and Interest in Purchasing Green Electronic Products

1 Summary and conclusions

1.1 Background and objective

The Danish EPA wished to examine the status of sales of “green” electronic products on the private consumer market. How do consumers feel about making environmental demands when purchasing electronic products and what opportunities do shops give consumers to make environmental demands on the products in purchasing situations?

Previous studies have uncovered the opportunities and barriers facing public procurers in making environmental demands in relation to procurement of electronic products¹ . Thus, this study is a parallel survey, but it focuses on the private consumer market instead of public procurers.

Consumers are an important engine for promoting less environmentally hazardous products under the Product-Oriented Environmental Initiative. A basic question in this study is whether the environment and energy consumption even enter into consumers’ considerations when they buy electronic products.

Recent years have seen much talk of “a political consumer”, one who is able - by virtue of the items he/she chooses to put in the shopping trolley - to influence the development of innovative products. The concept of the political consumer presupposes that consumers make an active choice to buy products based on quality criteria linked to production conditions “behind” the products, e.g. animal welfare, ethics, working conditions or the environment.

To promote the development and production of cleaner products, consumers must be willing to pose new requirements and demand new product types. But consumer willingness alone is insufficient. Consumers must also find green alternatives on the shelves, so that they have a choice. How conspicuous these alternatives are to consumers ties in with the actual range of items displayed on the shop shelves, the availability of information and guidance and marketing of the products. This calls for conscious strategies and attitudes on the part of retailers, so that they will also pose environmental requirements back along the chain of suppliers.

1.1.1 Objectives

This project aims to study the interactions between consumers and suppliers in the context of developing and marketing “green” electronic products. The study is to highlight the interrelations between consumers and retailers and their perceptions of each other, as well as the possibilities of turning environmental considerations into a competitive parameter in the purchase and sale of electronic products.

1.2 The study

The project encompasses three sub-surveys:

The project was realised from 1 March 2001 to 1 February 2002.

1.2.1 Definition of electronic products

The project focuses on consumer electronic products, which this study defines as three main types of products:

• Mobile phones
• Stereo/television equipment
• PCs and accessories

1.3 Conclusions

The survey reveals a positive consumer attitude to posing environmental requirements to purchasing electronic products. Many consumers (25-40%) respond that they attach great importance to the environment and energy when they buy electronic products.

This is inconsistent with retailers’ experience. According to them, consumers do not demand green electronic products. The retailer survey shows that the environment is not a part of retailers’ agendas, which they explain is due to the tough price competition on the market for electronic products. A few had set up an environmental policy, but only one of them had established environmental requirements directly related to products. According to the retailers, they do not consciously offer alternatives of environment-friendly electronic products because consumers do not demand them, and until they start doing so, retailers will not be active in the area.

There may be at least two explanations of the disparities between consumers’ answers and retailers’ experience of consumer behaviour in purchasing situations.

1. Consumers reply more positively than they actually act. Good intentions evaporate when consumers find themselves in the purchasing situation. Other consumer surveys show a corresponding difference between consumer attitudes and actions. The positive interpretation sees the responses as indications that consumers are willing to consider environmental issues when they purchase electronic products.
   
2. The retailers interviewed have no direct contact with customers. Information may be lost as it travels from the shop assistant to the head purchaser in the retailer chain. Consumers’ questions concerning environmental aspects are presumably diffuse and imprecisely worded, since they lack the knowledge and tools to make clear demands. Presumably, diffuse questions from customers are more difficult to channel through the retailer chain than clear-cut questions.

Consumers are willing but lack information
Apparently, consumers show a strong desire to consider the environment in buying electronic products. The positive attitude to considering environmental aspects in the purchase of electronic products registers slightly higher with women than with men. Thus, 59% of the men are willing to make environmental allowances, if products carry environmental information, against 68% of the women.

Women’s being more prepared to make environmental allowances than men contrasts with the fact that men make up two-thirds of those responsible for purchasing electronic products, and women one-third.

Consumers’ lack of knowledge on the subject prevents them from translating their willingness into actual action when they purchase. Fifty percent of consumers are unaware of whether PCs or stereo/television equipment cause environmental problems. About one-third reply no to the question of whether the production, use or disposal of electronic products causes environmental problems. In addition to knowledge on the environmental impact of electronic products, consumers need more environmental labelling and information to navigate them through a purchase.

Even though consumers are interested in including environmental considerations in their product choice, many other factors go into the process. The respondents primarily mention prices, followed by technical aspects, quality and design. Among these factors, consumers attach lowest importance to the environmental aspects parameter.

Consumers say they will pay for environmental considerations
One-third of consumers are willing to pay more for a product that is less adverse to the environment, and more women than men are willing to do so.

The focus group interviews revealed the high degree to which electronic products are life-style products. Consumers want the products to fulfil far more than practical functions. Consumers set great store in design, and are willing to pay more for an attractive product. Likewise, some consumers are willing to pay extra to obtain a “green” product.

The participants of both focus groups suggest the introduction of a scrapping reward for electronic products, payable when end-of-life products are returned to retailers. This initiative should promote collection and reuse of scrapped electronic products.

Many motives underlying environmental considerations
Focus group interviews with consumers show that many factors can motivate consumers to consider the environment when they buy electronic products.

• Environmental considerations as an added quality of the product
• Environmental considerations as a health aspect
• Environmental (and energy) considerations as a money-saving factor

The consumers interviewed believe that the environment should be an integral quality parameter of a product, in the sense that the environment is an integrated parameter on an equal footing with other aspects. They state that they would not buy an electronic product for its environmental properties alone. Other parameters such as quality, functionality and price should still be competitive. Thus, a high environmental standard cannot supersede any of the traditional product requirements, but can supplement them. Other consumers describe environmental considerations as a way of enhancing product quality, thus adding to its value at the personal level. To some consumers, this personal value of a product can grow through exposure in their surroundings, e.g. if the television in the living room carries a visible eco-label. Thus, environmental considerations give an intangible or symbolic value to the product.

Consumers weight the health impact of their consumption heavily, and they also perceive environment-conscious consumption as a type of self-protection. They would be willing to make the product content of chemical substances a major consideration, if they knew that electronic products could evaporate chemical substances during use. But the focus group interviews show that very few consumers are aware of this aspect.

Lastly, consumers perceive environmental considerations most concretely as a factor that will save them money if they buy products with low energy consumption. Energy consumption is the environmental parameter rated as most important by consumers. Many consumers state that their purchases of low-energy products are spurred less by ideology, than by a wish to save on their own power bills. Others believe it to be a general social responsibility for citizens to save on energy.

Consumers pose requirements to environmental information
Consumers want verified environmental information. They have no confidence in environmental information supplied from producers without being verified. The consumers interviewed responded positively to the concept of a simple environmental declaration (see example in Appendix D), which communicates a few, selected environmental parameters to consumers. But if environmental declarations cannot be verified, consumers prefer the official eco-labels.

The questionnaires also confirm that consumers attach great importance to eco-labels’ being verified by the authorities. Ninety-four percent of consumers attach high or some importance to it.

Eco-labels and environmental information on the actual product represent only one channel of information to consumers. Thus, the questionnaire shows that 30% of consumers obtain their information on products through newspapers and adverts, while 20% find their information in special interest magazines on electronic products. Finally, about 15% of consumers find information on the Internet and 11% in consumer magazines.

The figures illustrate that consumers also use “general information from their surroundings” on products as the basis for their purchase decision and as a supplement to the product information conveyed in the purchasing situations. “General information from the surroundings” impacts greatly on the purchase of electronic products as many consumers perceive the purchase of electronic products as a major investment, e.g. when they buy PCs, televisions and stereos. Consumers explain that there is usually a correlation between the price of the product and the time they spend on investigating the product and its alternatives.

Retailers also lack knowledge
The retailers knew very little about electronic products having a less adverse impact. More than 50% stated that they were unaware of any environmental aspect of consequence to electronic products other than energy consumption. To this should be added that several retailers stated that electronic products have no other significant environmental problems and therefore no activities need to be targeted at the area.

This study shows that precisely retailers and shop assistants are significant sources of consumer information. Thus, 58% of consumers receive information from the shops before they buy an electronic product.

Retailers do not compete on environmental aspects
The general picture emerging showed that the environment as such is not yet an item on the retailers’ agendas. They state the fierce price competition on the electronic products market as one of the reasons. A few had set up an environmental policy, but only one of them set out environmental requirements directly related to products.

None of the retailers purposefully offer or market environment-friendly electronic products. However, they do offer electronic products carrying eco-labels or energy labels such as TCO 95/TCO 99, Energy Star or the Danish Energy Arrow, but this is more or less coincidental.

Retailers expect consumers and producers to make the next move
According to the retailers, they do not consciously offer alternatives of environment-friendly electronic products because consumers do not demand them, and until they start doing so, retailers will not be active in the area.

Generally, the retailers believe that producers will develop products in a way that ensures a lowering of the environmental load of individual electronic products.

To elaborate on this main conclusion, the chapters on the two sub-studies contain more comprehensive conclusions.

1.4 Recommendations

Today, the situation on the electronic products market is at a deadlock, with neither consumers (according to retailers) nor retailers showing any initiative in promoting the sale of less environmentally hazardous products. According to the retailers, consumers do not demand less hazardous electronic products. On the other hand, retailers are reluctant to make their own efforts to market less environmentally hazardous electronic products, before consumers demand them.

Several producers focus on the environment in some way, but this fact is rarely communicated to retailers and even more rarely passed on to customers.

This situation leaves a picture of a market where environmental innovation is occurring, as many producers focus on the environmental dimension of their products, but without retailers or consumers getting or obtaining more information about it.

1.4.1 Retailers must become more active

The tough price competition limits retailers’ possibilities and especially their desire to participate in promoting less environmentally hazardous electronic products. Consequently, success hinges on the retailers’ role being relatively cost neutral. Retailers are recommended to start competing on the environmental aspects of their products. The environmental parameters of products must be underlined in adverts and shops. Retailers should strengthen their roles as an important information link to consumers on environmental matters, e.g. communicating environmental aspects of products by handling out information material in sales situations and through participating in information campaigns.

Such activities could benefit from involving shop assistants actively, because they constitute a crucial link for providing environmental advice to consumers. Environmental competence development of shop assistants and development of simple information tools should be prioritised.

Further, retailers are recommended to start demanding environmental data and documentation from their suppliers.

Retailers should urge producers to use the environmental and energy labelling schemes relevant for electronic products, e.g. the Swan, the Flower and the Energy Arrow. All interviewees recognise the Energy Arrow from a television campaign, but no one has seen it on products in shops.

All retailers in the survey stated that the Danish electronic products market is very small seen by international standards, and that their chances of posing requirements to products are next to nothing. Consequently, we recommend that retailers strive - via the Danish trade associations - to persuade the European and international trade organisations to pose environmental requirements to producers. The relevant Danish trade associations are, e.g., the Trade Association for Radio and Stereo Equipment (now closed down), the Trade Organisation Consumer Electronics and the Danish Commerce and Services.

1.4.2 Consumers need information on several levels

Consumers must start demanding less environmentally hazardous electronic products and require documentation for environmental aspects of the products. This study shows that consumers are willing, but that their willingness needs to be turned into practice. To persuade consumers to do so, they must be made aware of why it is essential and what questions they should ask. This can be realised through general environmental information to consumers through the sources they use to find product information: newspapers, adverts, the Internet, special interest magazines and consumer magazines.

Since consumers may have many motives for purchasing green electronic products, information needs to be multi-facetted. Arguments can emphasise the facts that green electronic products are a quality parameter, that they are healthier and that they save money.

In addition, consumers are asking for environmental product information that they can use in purchasing situations. Consumers want comparable and reliable environmental information on environmental product qualities. Many consumers in the survey are familiar with the Swan label, and an evident possibility is to expand the use of the label to cover electronic products in Denmark.

As the Swan is not widely used for electronic products in Denmark, we recommend that work continues on developing a simplified environmental declaration. Consumers are positive about the idea of a simplified environmental declaration, as it would help them base their choice on the environmental qualities they find most important, e.g. chemical substances, energy consumption or reusability. Consumers want information in the simplified environmental declaration to be verified.

Segmenting consumers

On the basis of their responses in the questionnaire, consumers break down into four consumer types:

The converted - the consumers who are already positive to the environment, both in terms of electronic products and other consumer areas.

The convertible - the consumers who are, just under the surface, positive to the environmental aspect of electronic products.

The accessible - the consumers who are less environmentally positive than the convertibles, but who may with some persuasion become green consumers of electronic products.

The inaccessible - the consumers who are less positive to the environment and nothing indicates that this will change, neither for electronic products nor for other consumer areas.

The respondents distribute on the segments as follows:

Click to see html-version of: Tabel 1.1

The four groups differ in terms of attitudes, education and income. The greener they are, the higher their educations and incomes. In contrast, they do not differ in terms of age, housing or rural/urban living.

A strategic use of the segmentation analyses could be to target an information strategy at the two middle groups. The first group only needs slight persuasion - they are already green consumers. Activities targeted at the two middle segments may convert them into environmentally aware consumers. The last group is difficult to influence in terms of environmental consciousness.

1.4.3 The authorities may start a positive spiral on the market

If the market for less environmentally hazardous electronic products is to grow or - more exactly - arise, somebody needs above all to be interested. Since retailers do not market nor consumers outright demand less environmentally hazardous electronic products, the authorities have to facilitate the process. This can be effected through two main types of activities:

• The authorities need to set the framework for communicating product-oriented environmental information from producer to consumers via the retail link, e.g. through eco-labels and environmental declarations.
  
• In general, the authorities must inform consumers on the environmental impact of production, use and disposal of electronic products. More general, problem-oriented information should be accessible to consumers before, during and after the purchase.

Product-oriented information: Eco-labels and environmental declarations

Various systems exist to communicate information on environmental aspects of electronic products. Eco-labels and environmental declarations constitute one type of information system.

A work report from the Danish EPA² presented a simple environmental declaration of consumer electronics. The declaration contains information on energy consumption in both operation and standby, states whether the product contains halogenated compounds or heavy metals and also gives a percentage for potential recycling.

The declaration concludes with advice on how to use the information.

The Danish IT Industry Association (ITB) has developed its own system for environmental declaration jointly with sister organisations in the Nordic countries. Depending on the product type, the ITB declaration provides information on design, batteries, energy consumption, ergonomics, noise, emissions, electrical safety, material consumption, reuse, packaging and environmental policy. Thus, for products carrying the ITB declaration, most relevant information is easily accessible, even though it is not verified by an independent body. ITB’s existing environmental declaration was designed for professional purchasers and is therefore very complex and difficult for normal consumers to use. If it is to become useful to private consumers, it must be simplified with fewer environmental data. ITB is currently working towards this end.

As to the eco-labels the Swan and the Flower, criteria exist today for certain electronic products, e.g. PCs, printers, copiers and televisions, but shops are not abounding with eco-labelled products.

Thus, a significant challenge lies in marketing more energy and eco-labelled products. Producers must be urged to use the labels for their products, and retailers must be urged to make the products visible in shops and train their staff to inform customers about the significance of the labels.

If we do not want to promote the use of the Swan or the Flower among producers, we need other label schemes.

Some consumers would like to see more detailed environmental information than the yes/no statement communicated in an eco-label. This is why a simple environmental declaration may be a possibility. An environmental declaration must be based on a few, selected environmental qualities and should be verified if it is to attain credibility among consumers.

Problem-oriented information: General information material

If consumers are to be persuaded to use the environmental information on products, they have to know that the product’s environmental aspects are interesting before they purchase it. To date, the environment only exists on the periphery of consumers’ consciousness when they purchase electronic products.

This is why both consumers and shop assistants need general information on the environmental impact of production, use and disposal of electronic products. Consumers are vaguely aware that electronic products cause environmental problems, but that is often the limit of their knowledge. Shop assistants’ knowledge on environmental aspects is also scanty, but retailers can obtain information, if they demand it from the supplier chain.

The advantages of taking environmental considerations in relation to electronic product purchasing need to be conveyed at several different information levels, as consumers have varying motives for their environmental consciousness. Further, product types are inherently different. The main messages that need to be conveyed concern energy and eco-labels on the products, energy consumption, undesired chemical substances, recyclability/dismountability and packaging-return schemes. This environmental data benefits both consumers and shop assistants.

Consumers want information on the advantages of purchasing a product produced on the basis of environmental considerations. An information campaign could provide data on the actual differences between conventional electronic products and “green” electronic products labelled with either the Swan or the Flower. Conditions impacting directly on consumers are most immediately interesting, e.g. energy savings or chemical substance evaporation in the use phase.

Many information routes to consumers

Consumers have access to a wide range of information routes other than the information supplied in purchasing situations. Even though the survey shows that the information consumers find in shops is pivotal, they also use other sources of information. Consequently, the information consumers get from their general surroundings must be utilised to communicate the environmental conditions of electronic products. Environmental impact can be communicated via newspapers, adverts, special interest magazines and consumer magazines. This is actually where consumers seek product data before purchasing electronic products.

This type of information reaches consumers before they arrive at the actual purchasing situation, and is therefore an essential basis for allowing them to prepare environmental questions in advance.

Thus, environmental information to consumers must consist of several building blocks.

• Development and dissemination of eco-labelling on products. Information that consumers typically use in purchasing situations.
  
• Environmental information from shop assistants in purchasing situations. Environmental matters should be included on a par with other purchasing criteria. Thus, shop assistants must have knowledge on environmental aspects at a level similar to other aspects of the product.
  
• General consumer information on environmental impact of electronic products through other sources, e.g. newspapers, product tests and the Internet. Information that consumers pick up before they purchase and that may help put the environment on consumers’ agendas.

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¹ Green electronics in procurement. Work Report no. 15, Danish EPA, 2001.
² Work Report from the Danish EPA no. 16, 2001. Report on environmental declaration on consumer electronic products – from knowledge to action. 

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