We offered 7753 shoppers the chance to pay a small fee for sustainable packaging. Here are the results.
It’s no secret that innovative sustainable packaging solutions come at an extra cost. Plastics are simply dirt cheap to produce. But who will bear the extra cost of sustainable packaging?
While some ecommerce businesses may be willing to give away a margin of their profits in the name of sustainability, it’s more likely the cost will be covered by the consumers – hidden into the product price or explicit in the checkout.
And indeed, numerous surveys show customers are willing to take on this expense. For example, Trivium Packaging‘s 2022 Global Buying Green Report – based on a survey of more than 15,000 consumers across Europe – found that 86% of those aged 45 and under said they were willing to pay more for sustainable packaging.
Similar survey-based studies have found “77% of consumers in Europe are willing to pay extra for packaging that has less impact on the environment,” (Pro-Carton) and “[...] Despite the rising cost of living, many western Europeans (61%) would still consider paying more for sustainably packaged products” (Eviosys).
Well, we wanted to find out if consumers will put their money where their mouth is. So we partnered with two ecommerce companies for an experiment.
The setup of our experiment
The two ecommerce shops that joined us for the experiment were Medifum and Hammas32. Medifum is an online store that sells wellness and health products, from skincare to supplements. Hammas32 sells everything one might need to keep their dental health in order.
The setup of our experiment was quite simple. We provided Medifum and Hammas32 with Wool Envelopes and they added a checkbox to their checkout flow where shoppers could choose to pay a small extra fee to receive their order in sustainable packaging. Both ecommerce shops were free to decide on the exact price and wording of the checkbox text.
Here’s how it looks in Medifum’s checkout:
And in Hammas32’s checkout flow:
During the first two months of the experiment (August-September), Medifum priced the sustainable packaging option at €0.95 and Hammas32 at €0.49. As an extension of the experiment, the shops lowered the prices to €0.78 and €0.29 accordingly for one month, from the beginning of October.
In total, 7753 online shoppers completed the checkout flow during the three months of the experiment. Do you want to take a guess of how many opted in for the sustainable packaging option? Let’s take a look.
Results: just 6% of online shoppers are willing to pay more for sustainable packaging
Out of the 7753 purchases made during our experiment, only 458 had checked the box for sustainable packaging in the checkout.
Notably, lower prices did correlate to more customers opting in. Across the two stores, the percentage was lower during the first two months of higher prices, an average of just 4.7%, and increased to 7% when the stores lowered the prices for sustainable packaging.
Here are the stats, broken down by price increments:
At €0.95, the percentage of customers opting in for sustainable packaging was just 2.4%
At €0.78 it was 6%
At €0.49 it was 7.1% and
At €0.29 it was 8%.
To us at Woola, the conclusion is clear: online shoppers are not ready to bear the cost of sustainable packaging, which puts the responsibility on the retailers. Despite what consumers express in surveys about the willingness to pay extra, when actually faced with the choice – most don’t follow through.
“I thought more people would pay extra for sustainable packaging,” commented Ken Daniel, the CEO of Hammas32. “Our expectation was that perhaps about 15% will choose sustainable packaging. In reality, it was under 10%. At the same time, I believe that if we improve our communication and make some changes to how the option is presented, we can increase it to 30-40%.”
Feedback from customers
One thing we are quite proud of is how Woola packaging creates wow-moments that people want to share. In the context of this experiment, we asked Medifum and Hammas32 if they received feedback from their customers about the sustainable packaging option offered.
Ken from Hammas32 said “There were a few customers that got in touch to thank us, applauding the opportunity to opt for sustainable packaging.”
Medifum also received positive feedback from their customers. Medifum’s representative Kadri Eisler shared, “One customer commended us specifically for using packaging made of leftover wool, as her husband also finds ways to use waste wool.”
How can retailers empower shoppers to make more sustainable choices?
The results of our experiment offer a stark contrast to the survey results mentioned in the beginning of this article. However, it turns out that it’s quite common that as we as consumers don’t always act according to our values. Thomas Husson of Forrester calls it “The Green Consumer Paradox”:
“Consumers constantly trade sustainability for price, speed, performance, or convenience; even the so-called “green consumers” do.”
– Thomas Husson of Forrester
Husson also says that organizations can empower people to consume more responsibly.
Our project started out as an experiment to see how many consumers are willing to pay a symbolic amount of money to receive their order in sustainable packaging. While we found some answers, we also started raising more questions about how retailers can help shoppers make more sustainable choices.
Halfway through the experiment, we decided to lower the prices of sustainable packaging to see if that may have an impact. And it seems to have worked! Which got us thinking… What more could we do to influence this decision at checkout?
What if we made the checkbox opt-out rather than opt-in, meaning it would be checked by default? (Inspired by the well-known organ donation example.)
What if the option was more visible? It’s possible that some online shoppers didn’t notice the option in the current form. RePack has ran similar tests and found that 20-30% of online shoppers opted in for their circular packaging when it was offered via popups like these:
If you’re a retailer that would like to offer sustainable postal packaging at a small extra fee, be sure to consider the above when setting up the option in your checkout.
Limitations of our experiment
Our experiment was not perfect. It was limited to two ecommerce stores operating in a similar space: (dental) health and wellness.
It’s also worth noting that both Medifum and Hammas32 sell to the Estonian market. This is something that Kadri from Medifum highlighted when we discussed the results with her.
“We are actually very happy with the results. People tend to forget that sustainability is still not very high on the list of considerations for the average Estonian consumer,” Kadri shared.
Indeed, a 2021 report from the Estonian Consumer Union shows that 56% of Estonian consumers have considered the environmental impact of their purchases. While that’s a huge improvement from just 18% in 2014, it’s still much lower than similar pan-European statistics (e.g. that 70% European consumers identify as environmentally aware).
So, we’re definitely also looking to extend the experiment geographically, beyond Estonia. Stay tuned for updates on this topic by following Woola on social media or subscribing to our newsletter!
