A conversation on LOHAS

Recently I had the opportunity to speak with Gwynne Rogers of the Natural Marketing Institute (NMI).  NMI is a market research and strategic consulting firm with expertise in health, wellness & sustainability.   Gwynne is the LOHAS Business Director at NMI.  She focuses on strategic analysis and planning for LOHAS related companies.  She holds a Masters in Environmental Management and an MBA from Duke University. She brings five years of specific experience in environmental marketing where she served various companies such as Pitney Bowes, Advanced Coal Technologies, and the U.S. Environmental Protection Agency.

Matt Benson: What is LOHAS?

Gwynne Rogers: LOHAS stands for Lifestyles of Health and Sustainability. Our consumer segmentation model shows that 17% of US consumers fall into the LOHAS segment.  These consumers are dedicated to personal and planetary health.   They make environmentally friendly purchases, they also take action – they reach out to politicians, engage in daily efforts to protect the environment (such as taking a bag to the store or composting), support advocacy programs and are active stewards of the environment.

Source: 2008 LOHAS Consumer Trends Database

MB: Why is the LOHAS segment important?

GR: For most firms offering sustainable or green products and services, this segment of the population will form the core of their customer base.  They are the early adopters and influencers.  They are the most engaged consumers on green issues and most likely to buy sustainable offerings.

However, for many of our clients, for instance those in the consumer packaged goods (CPG) space, the 17% is not sufficient to be an attractive business.  Therefore, they will look to appeal to NATURALITES or DRIFTERS to make the business case work.   Even when a company is looking at a mainstream green product it is unusual for them to not consider the LOHAS segment the gatekeepers to success.

MB: What are some misconceptions of LOHAS consumers?

GR: For one, even the LOHAS consumer, the most green of the green have a variety of behaviors.  They don’t recycle everything.  They don’t buy organics at every opportunity.  They don’t always ride their bicycles to work.  There are so many ways to be green, no one consumer simply can not do them all.

MB: You alluded to the mainstreaming of “green,” I have recently seen the concept of “greenhushing,” where companies are hiding or being less aggressive in marketing their green activities. Have you seen this?

GR: I have seen it.  I think we have shifted a bit from companies trying to get credit for every single green activity towards something a bit more real.  There is a sense of authenticity that comes from not screaming about your green performance.  We see companies being more reserved and I think it could pay off.  Companies like Aveda and The Body Shop for instance – They are humble and transparent.

MB: What does your consumer research suggest about the perceptions of renewable power?

GR: Well, consumers are aware of renewable power more than they used to be.  There is increased awareness certainly, but they are not buying it.  The benefits are not clear, and most consumers consider it a donation rather than a value-added product.  They are generally supportive of policies and efforts to make our energy infrastructure more sustainable, but the majority of consumers are not willing to pay a premium on their utility bill.

MB: One thing that frustrates many about consumer research is that what people say they will do is often different from what they actually do.

GR: That’s true.  You will see that in many different product categories.  What is encouraging and compelling is that there is less of a gap between “Say vs. Do” for LOHAS consumers.  We have coded Nielsen panels with our segmentation model and shown that the LOHAS segment is more apt to follow through in their shopping.

MB: One of the concerns that many have is that the economic meltdown is going to derail the momentum for clean tech and green behavior.  What do you think?

GR: Well I’ll go back to basics.  Life is about tradeoffs….from work-life balance to deciding to go to the gym or go to the pub.  Green is no exception.  There is going to be a drop in green activities that have a cost premium to them.  On the other hand, many green products actually include an economic incentive.  One thing we have seen is that the zero cost green activities like boycotting, composting, and writing congressmen have increased.  That is encouraging.  The other thing that is encouraging is that those decisions and activities where there is a small cost have not dropped as much as some might have expected.  For example, for people who buy organic foods,  only 20% say they are buying less because of the economy.  These are committed consumers.

Simultaneously, for the 52 weeks ending in December, sales of organics were up 6%.  This is less than the historically typical 15%, but decent all things considered.

MB: What advice do you have for someone who is interested in thinking more about the market segmentation for green products?

GR: We have a number of white papers and reports available on our website, and our segmentation model might be useful analytic tool in future consumer research projects.

Note:  I originally wrote this post for CleanTechies, but decided to repost it here since it is relevant.

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