The "Green" Trend in Germany and What It Means for Companies Selling to Germans?
Updated: Nov 24, 2020
Environmental issues are getting more and more important for Germans!
The constant public discussion about environmental issues and climate change is in Germany really present and ultimately influences the behavior of customers. The mindsets of Germans about how to treat their environment changed rapidly over the last five years.
Recent extreme weather conditions made all of us unpleasantly aware of the problem. The gigantic bush fires in Australia are just the latest example, which is still present in many people's minds. Next to that, we experience a lasting public discussion, and the Fridays for Future movement and constant demonstrations of not only the young people let many Germans think about what is their personal responsibility of the environmental destruction and what they can do to decrease it.
Most Germans want to maintain their lifestyle while buying the alternative product, which leaves a little less carbon footprint behind.
The "green" trend arrived in the center of the German society!
Not only the pace of the change in people's mindset but also the share of people who care about sustainability within the German society is remarkable. After the public attention to this topic, the trend reached the vast majority of the society in Germany. It is no longer merely a small part of Germans who are willing to take action. Many consumers started to consider their environmental footprint on their consumption. Some even try to reduce consumption and are willing to sacrifice comfort. However, rather a small percentage of Germans are limiting their consumption for the environment. Most of Germans want to maintain their lifestyle while buying the alternative product or service, which leaves a little less carbon footprint behind.
Of course, not all Germans now want to change their consuming behavior. As in every controversial topic, there are some even against any "environmental bullshit". In fact, there is a group as a counter-movement to "Greta's" Fridays for Future named "Fridays for Hubraum", which means "Fridays for engine displacement".
The trend is affecting businesses selling to Germans
Consequently, what the changing mindset of the mainstream in Germany mean for your business, and which marketing strategy makes sense depends on your target group. If your target group consist of people with a sustainable lifestyle people or if it is broader and includes the mainstream you want to consider how you can react to the prevalent environmental mindset to seize an opportunity or to avoid falling behind the industry's standard.
As the needs, expectations, and purchase decision process of German customers changes, companies targeting German customers need to adjust to this trend especially as it seems to be a long term trend. When we look in the future, it seems rather unlikely that the change will stagnate or even reverse. Such a shift in people's values and demand consequently has its impact on businesses selling to Germans. The questions are what companies need to consider and how companies can gain profit.
Three aspects, businesses who (want to) sell to Germans need to consider
Three main aspects need to be considered. Of course, it all depends on the industry, target group, and specific business circumstances.
1. The environment becomes a decisive factor at German's purchase decision
Germans decide what to buy also according to how "green" they think it is
Consumers try to include ecological factors in their purchasing decision. They think about whether the volume of the package and plastic is necessary, how long the product has been shipped, and how the product was produced. It would be best if you tried to reduce such environmental factors.
But keep in mind that it is crucial how your target group perceives these factors. Using cardboard instead of plastic in your packaging can have a more significant impact with fewer extra costs than changing something at the production as the customer feels whether he has plastic or paper package in his hands rather than whether the product was produced with "green" or "dirty" electricity. Of course, the more you can reduce, the better.
Manipulate how your target group perceives how green your product is
Next to reducing the unfriendly environment material and the carbon footprint, you could adjust your marketing strategy. You could manipulate how your target group perceives the environmental impact, through smart marketing. Associating your brand or online shop with environment-friendliness trough your messages in your ads for example. Also, you can emphasize your environment-friendly propositions underpinned with fitting color, "green" shipment, and perhaps ecological incentives. Flixbus, for example, gives customers the option to compensates for the bus journey by contributing some money to atmosfair, a certified climate protection project; the online shop Treecelet plants trees for purchasing their products; or the online shop Looxis plants trees for customer reviews.
2. How to make money out of this trend?
When it comes to giving money, people are more reluctant.
Indeed, German consumers state in surveys that they would pay more for a sustainable supply chain. Depending on the study 28 to 77 percent of Germans would pay more for "green" products. However, it is a different story to say something than actually to pay. When it comes to giving money, people are more reluctant. Studies show that when it comes to either giving money to reduce carbon or to take it for yourself, most Germans rather take most of the money for themselves.
It is all about marketing strategy
Having this in mind we know that it is rather difficult to convince Germans to pay a higher price just for the environment, even though it is important for them. But how can you charge a higher price to compensate your higher costs or how can you even increase your margin?
By providing customers with benefits coming along with them being environment-friendly, benefits for the customer itself rather than only for the environment. Making the customer feel being responsible and superior about buying environment-friendly products. Also, to provide customers reputation and prestige among their social contacts for buying such "green" products.
Make your customers feel superior and provide prestige
To increase the willingness to pay, it would help if you focused more on providing your target group with feeling superior and showing to their friends that they are so sustainably responsible than on plain ecological facts. However, this marketing strategy might seem bold in the beginning and requires a well-adjusted marketing mix and a truly "green" supply chain. But sometimes it might be enough to put some labels on the product and to advertise with these labels ("green washing").
3. Companies should avoid falling behind the standard as many companies in Germany become "greener"
The hygiene effect
Finally, companies should consider the negative impact of being seen as not sustainable (below the standard) and especially about being seen as part of the problem rather than part of the solution. Being ecologically responsible is, according to Prof. Herfert, becoming a hygiene factor in Germany. That means if someone is not hygienic (environmentally responsible), he starts to smell, and it gets impossible to not notice. Hence, the company stands out very negatively. On the other side, if a company is hygienic (environmentally responsible), no one praises you for washing yourself, and you don't stand out positively.
Don't stink (or don't fall behind)
That means that companies should really avoid falling behind and monitor the industries standard to make sure that they are keeping up.
For those companies that have truly green values and conduct their business accordingly, on the other side, it gets more difficult to stand out in the future. Truly green companies (whether out of genuine belief or marketing strategy) need to actively signal and show authentically how much better they are.
Conclusion and Recommendation
1. It is a trend that is affecting businesses
Consumers in Germany become much more aware of environmental issues and try to reduce their impact. Companies who are selling to Germans find themselves in a different situation facing different needs and values of customers than five years ago. Companies now need to increase the sustainability of their products and consider how customers perceive the sustainability of their products to make the purchasing decisions of their customers easier.
2. How to make money out of this trend?
Because German consumers hardly pay more for sustainable products, companies need to find ways on how to provide benefits for the consumer coming along with a sustainable product, such as the feeling of doing a good deed and getting prestige.
3. Don't fall behind or be a pioneer
Finally, companies with a low degree of sustainability need to be cautious and taking steps to be not seen as part of the problem instead of the solution. Whereas companies with an extraordinarily high degree of sustainability should make sure that they are seen as way better than the industry's average.
 Statista (2019): Anzahl der Personen in Deutschland, die bereit sind, für umweltfreundliche Produkte mehr zu zahlen, von 2015 bis 2019, de.statista.com/statistik/daten/studie/264571/umfrage/kaeufertypen-zahlungsbereitschaft-fuer-umweltfreundliche-produkte
 Hüthig (2019): Umfrage: Zahlungsbereitschaft für Nachhaltigkeit, neue-verpackung.de/64374/umfrage-zahlungsbereitschaft-fuer-nachhaltigkeit
 Unfortunately, we are not allowed to disclose this source
 I use an analogy brought up by Prof. Herfert regarding a possibly similar effect of ecologically responsible management on company reputation and business success as would be expected along with Herzberg's famous hygiene-motivation factors for employee satisfaction, complaints, and performance.
 Discussion with Prof. Dr. Matthias Herfert