The CQ: The holy grail of greener living
The government has offered compelling incentives for homeowners to upgrade, but the consumer journey remains challenged.
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Buzzing at the Forerunner Office…
Consumers want to make climate-friendly upgrades — knowing how to get started must become easier
By Nicole Johnson, Partner
In early August, congress passed the Inflation Reduction Act, which provides clear economic incentives for consumers to make environmentally-friendly upgrades to their homes: through a home improvement credit, households can deduct up to 30% from their taxes on the cost of climate-related upgrades. It’s estimated that the move to electric-powered appliances like electric stoves and heating alone could save households $1,800 a year.
So many of the efforts and decisions to address climate are outside the control of consumers, and for those where consumers can have a hand, there's the perennial challenge of the cost, convenience, and/or performance tradeoffs often associated with greener consumption. The home is a compelling and impactful starting point for consumers to do their part and take action. Sustainability-minded home improvements can reverse the cost and performance challenges, with more efficient homes. Not only is the home the most expensive purchase most people make in their lifetime, it’s also a significant recurring expense with annual energy costs, upgrades, and maintenance. In fact, a recent Forerunner survey found that consumers are raising their hand when it comes to climate-friendly home updates: 43% of respondents said they would purchase clean alternatives for energy, heating/cooling, and home appliances while 34% said they would be open to using traditional products less in the same category. This level of interest from respondents exceeded willingness to make the same changes in apparel, beauty, travel, and food.
There is a clear pull in the market from consumers and there are increasing economic incentives in place, both important factors Forerunner has written about. The short-term cost savings associated with sustainable energy at home stands now tip the scale in favor of greener buying. The long-term upside will likely become top of mind as more cities and states require homeowners to disclose a “Home Energy Report” detailing their home’s energy-related use and associated costs. A home’s energy score can be as important of a selling point as a school district or renovated bathroom and kitchen. They can each materially increase a home’s value.
However, a clear obstacle remains: the convenience factor. While the government has a climate tax credit website, for home improvements, and most climate-related decisions, the consumer path for just getting started, and then for following through remains opaque and cumbersome. How do consumers learn if they qualify for credits? How do they find the right products for them and reliable service providers? How do they appreciate the magnitude of the cost savings? How do they afford the improvements upfront? And, what can you do if you're a renter?
Promising strides in the category are being made by companies like David Energy and Ohm Connect, which monitor and manage smart devices and energy appliances so that consumers can save money on electricity costs while conserving energy. Others, like Gradient, offer heating/cooling without harmful refrigerants, while Altered provides water-saving solutions. There’s PowerMarket for community solar, an attractive option for renters. There’s Elephant Energy and Wildgrid, which are in the early stages of tying it all together through a personalized experience that guides and informs consumers from discovery through purchase for home energy upgrades. And around the Forerunner table, the consumer-facing MainStreet for climate tax credits and financing as well as a platform that compels more individual service providers to enter the market would capture our imagination.
There are stand-out proof points that if business and government align, meaningful consumer changes will happen: in France, for example, the government recently offered subsidies of up to 9,000 euros per household for homes to replace gas boilers with energy-efficient heat pumps. In recent years, France has become the biggest market for heat pumps in Europe, selling nearly 400,000 heat pumps in 2020 alone.
When it comes to climate, Forerunner is optimistic that home improvements will be an inflection point for consumer change. The ingredients are all there for impact if the consumer journey can be transformed.
This Week’s Top 10 Consumer Insights
Looking to bolster its upcoming TikTok Shop, TikTok is planning to build its own fulfillment centers in the U.S. Early conversation suggests the move could challenge Amazon.
The era of perfect Instagram pics is over. Following trends on TikTok, Gen Z has given up the curated feed for posts that “feel weirder, messier, and more comfortable.” A meaningful shift towards authenticity.
A new proposal from President Biden could give employee status to gig workers. This would create a requirement to provide benefits and protections such as paying minimum wage, overtime, and contributions to unemployment insurance.
New research says that 91% of Gen Zers believe mainstream pop culture is a thing of the past. Instead, subcultures within gaming, entertainment, education, fashion, and beauty have emerged.
The threat of a strike by freight rail workers is back on as union workers rejected the tentative agreement offered by the Biden administration. A strike would put a new strain on supply chains.
Retailers are continuing to create their own podcasts. Sephora, Walmart, Blue Apron, Shopify, Amazon, Mattress Firm, and Nordstrom are among those with branded shows. The shows focus on storytelling versus selling — a noteworthy messaging trend in brand building and marketing today.
Balenciaga, Hot Topic, and North Face all joined the resale market this week.
Millennials are expected to spend the most this holiday season, $1,823 average, compared to Gen Z’s $1,104 average, Gen X’s $1,594 average and Boomer’s $1,199 average. The survey also notes that Millennials are more brand loyal than other generations, with 6 in 10 belonging to a customer loyalty program.
The #5to9 trend on TikTok — videos documenting impressive pre- or post-work routines centered on self-care, including working out, meditating, cooking, and journaling— proves that hustle culture is back.
Wholesale prices rose 0.4% in September, more than expected, according to the Bureau of Labor Statistics. Food prices drove the increase in goods inflation, with a 1.2% monthly increase.
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“Instead of trying to innovate and sell your way out of an economically challenging time, go back to your core customers and understand their own struggles. What is going on in their business? Where are the dollars flowing? How do they keep their jobs? So frequently we can get wrapped up in our own mess that we forget who we’re really trying to serve and how they need us to show up in their lives.”
— Brian O’Malley, partner at Forerunner, talks to WWD about how brands should adopt a consumer-obsessed approach to product creation.
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Brian O’Malley speaks to WWD on how SMBs can improve their holiday shopping season.
New Curology CEO Heather Wallace speaks with Bloomberg’s Emily Chang and former CEO David Lortscher, M.D. about passing the torch as well as the outlook for the company’s business.
The Motley Fool touts the perks of using the Chime app.
WWD covers Alchemy 43’s free botox injections for “National Face Your Fears Day.”
Scott Gravelle, the CEO and co-founder of Attabotics, visits TechCrunch’s Found podcast.
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