Is it greener on the other side?

By Phil Weafer April 01, 2014 Green

In our annual look at the greening in and of the hardware channel, we search out current consumer attitudes and the state of the programmes promoting energy efficiency. Phil Weafer reports.

To view a PDF of the complete feature as it appeared in NZ Hardware Journal magazine, click the download this story button at the bottom of this page.

Whatever your view may be on energy efficiency, whether you’re an eco-warrior or couldn’t care less, there is no denying that green-consciousness is growing and growing throughout the retail world in every sector.

Still, gauging the results of surveys and statistics behind attitudes and trends to energy efficiency in New Zealand, it seems that there is certainly a greater awareness around the topic, but consumers are still coming around to the benefits over the price.

 

TOO PRICEY? ATTITUDE ADJUSTMENTS AHEAD?

According to a recent study conducted by Roy Morgan (see sidebar on page 24), while the people of New Zealand are conscious of and active in regards to environmental issues, the majority of those surveyed feel that environmentally products are overpriced.

Pip Elliott, General Manager of Roy Morgan Research NZ, says: “Three quarters of New Zealanders believe, rightly or wrongly, that “environmentally friendly” products are overpriced (compared to 68% of Australians), which presents a challenge for retailers and manufacturers of such items.

“However, with 61% of Kiwis considering themselves ‘an environmentalist at heart’ (compared to 58% of Australians), and less than a third believing threats to the environment are exaggerated, many probably still buy green-friendly products in spite of this perception.”

And there is impetus behind all of this: “Four out of every five Kiwis feel that if we don’t act now we’ll never control our environmental problems – an attitude that inevitably colours their purchasing decisions. After all, at the end of the day, we all have to play our part in saving the planet. Buying sustainable, eco, biodegradable, non-toxic and/or organic products is an easy, conscience-soothing way to do that.”

This attitude towards prioritising the monetary value of products over their efficiency is very variable and highly dependent on the product in question.

Looking at a recent Canstar Blue survey about reasoning behind a purchase (see sidebar on page 22 for more details), the purchase decision behind products such as heat pumps is far more about energy efficiency compared to not only small domestic appliances such as microwaves but also to a lesser degree even other, “hungrier” appliances like washing machines.

 

MAKING IT GREEN(ER) AROUND THE WORLD

While the current consensus is that Kiwis are not at the same level of eco-awareness as say Americans or Europeans, the US and UK markets certainly make for interesting comparisons when looking at the marketing of energy efficient products and services.

And it’s not just about efficient goods being sold at retail either, with many big box hardware stores such as the Home Depot and B&Q actively making changes and making a big thing about the energy efficiency of their premises. On the Home Depot website, there is a substantial special section highlighting the work the corporation does to heighten awareness of energy efficiency and its corporate responsibility (http://thd.co/1jt3ymz).

Here, Home Depot underlines not only the work it’s doing to not only seek, stock and sell environmentally friendly products, but also that the store itself will be as green as possible through efforts to improve efficiencies and reduce emissions. The webpage goes so far as to say: “You can count on us to be actively involved in pursuing environmental excellence through our stores and vendors”.

In the UK, B&Q has been one of a group of retailers participating in a Government-backed initiative that’s been run by the British Retail Consortium (BRC) since 2008. A report published by the BRC in January this year summarising the results so far of the initiative makes for impressive reading.

For example the changeover in packaging used in home improvement retail. The BRC report says the original plan was, to reduce packaging by 15% between 2009 and 2012 (against a 2007 baseline) and the progress which exceeded the target saw participating retailers reduce packaging by 25%.

Interestingly, both the BRC report and the Home Depot website draw attention to the efforts made to reduce emissions and increase efficiency in-store. With so many new big box retail stores planned to pop up all around the country, is this concerted effort being matched here in New Zealand?

 

IS GREEN THE NEW BLACK? KEEP IT KIWI

So what about local efforts? Like Home Depot in the states, many retailers here work alongside the ENERGY STAR programme which is run by EECA and has proved successful in raising awareness of energy efficiency and standards in the 12 years since its inception.

EECA’s General Manager for Products, Terry Collins, points to a merger with Australian authorities which has broadened the horizon of the programme and has helped spread the word about the work being done by the Government. Focusing on heat pumps, and speaking about the results of the work done by EECA alongside supplier and retail partners, Collins says that back in 2000, only 4% of New Zealand homes had heat pumps whereas now 25% have a heat pump installed.

“About 2005 we introduced ENERGY STAR logos onto heat pumps. The ENERGY STAR logo identified the top quarter most efficient heat pumps. At the time we introduced the programme, about 17% of the qualifying models made up about 21% of sales. Today, the qualifying models are still about 21% but they are two thirds of sales. So through the use of that ENERGY STAR identifier, we’ve pushed everybody into buying the most efficient products.”

This increase in interest of consumers in energy efficiency is being seen in many forms. Matthew Cutler-Welsh of Homestar, the online self-assessment tool that allows Kiwi homeowners to rate their own home in terms of its “health” (its warmth, comfort and cost efficiency), says the Homestar site has seen an increase in users in the last few years.

He says the site now has over 20,000 records and that 48% of traffic is returning users which shows that Kiwis are using Homestar to help progress along the journey of improving their home. Cutler-Welsh says that EECA’s Warm Up New Zealand scheme spurred uplift in the condition of houses, however he adds there is still a way to go before standards improve: “The vast majority of our existing homes are still of a fairly poor standard,” he says.

When asked what the biggest factor behind a home’s negative result on the Homestar site is, he responds: “Property values might still be about ‘location, location, location’. Performance is mostly about ‘insulation, insulation, insulation’!”

Another initiative that will be looking to improve energy usage is the New Zealand Smart Grid Forum (the “Smart Grid” being the interaction of appliances and power grid with a view to improving cost and efficiencies), the members of which were announced in March. One such member is EECA’s Terry Collins, who says that, while there have been no concrete plans put in place so far, future proofing has already been put in place with heat pumps. Already, many of the heat pumps sold in New Zealand today can at some point in the future be connected to a Smart Grid with a control box.

Terry Collins says: “Even though no decisions have been made about how to control the unit, the unit can be controlled already. Buying efficient equipment makes a lot of sense and if you start thinking about how much you can save over time, using our calculators, only a small bit extra sometimes really saves you a lot on your bills.”

“Facts and figures help, but a lot of decisions about homes are more emotive than that. Retailers and suppliers have an opportunity to get creative about how they demonstrate the benefits of being warm, dry and healthy.”

 HOW CAN WE GET GREENER?

So there certainly seems to be a shift in the market and the country in general towards a more efficient, green-conscious society. What role do suppliers and retailers play in this? The people in the know that contributed to this article offer some suggestions. Roy Morgan Research NZ’s Pip Elliott, is one who sees a role for hardware stores in this eco-movement.

“Hardware stores are well placed to cater to this market. Whether it’s with wood sourced from approved plantations, organic fertilisers, biodegradable paintbrushes or any number of items to help people make their homes as environmentally sustainable as possible, hardware stores can actually support and encourage this market.”

EECA’s Terry Collins, who says the sum of EECA’s programmes hopes to save the same amount of energy in one year that Hamilton uses in a year, says that raising the awareness of the long-term cost effectiveness is key. Collins says the programme works closely with retailers and suppliers involved with the scheme through mutually beneficial marketing.

“We do mutual benefit marketing, we get together and work out messaging for consumers to get a hold of these products. We’d encourage more suppliers and retailers to get in touch with us to work with that. We are one of the top 30 advertisers and marketers in the country and we don’t market our own product – we market a class of product and let the industry compete on other features in the market. All the things we get from our research are that it’s independent advertising and it’s in the Government procurement programmes too.”

Matthew Cutler-Walsh at Homestar says suppliers can do much to promote energy efficiency at the same time as generating revenue. Looking at specific product areas, Cutler-Walsh sees opportunities for suppliers around insulation, lighting, ventilation, low VOC materials and surface finishes.

From the retailers’ perspective, he says they could take the training provided by Homestar to upsell energy efficient products. Additionally, he says that it would be greatly beneficial for retailers to be more familiar with energy efficiency rating systems such as MEPS and WELS because it’s a simple fact that products with higher ratings will offer greater performance for the consumer.

Free choice currently precedes a state of affairs where there are rules around building more efficient/comfortable homes. Matthew Cutler-Walsh says that the top Homestar rating is required for homes in the new Special Housing Areas around Auckland, and that’s a precursor to the Unitary Plan.

He concludes: “So there’s a lot of scope for retailers to help make life easier for builders and specifiers by knowing which products will contribute and what evidence they can provide on their efficiency.”

 

A GREENER TOMORROW – IN MORE WAYS THAN ONE

As the Canstar Blue research on page 22 shows, there is still a level of hesitancy amongst Kiwis around energy efficient products being perceived as too expensive. The flipside is that this is just an objection to overcome which is like a red rag to a bull or an incentive to most salespeople.

Speaking to people working in programmes to promote energy efficiency, this should be seen as a chance to generate sales for retailers and suppliers alike. Matthew Cutler-Walsh implores retailers and suppliers to take advantage of the role they play in promoting energy efficiency.

“Facts and figures help, but a lot of decisions about homes are more emotive than that. Retailers and suppliers have an opportunity to get creative about how they demonstrate the benefits of being warm, dry and healthy.” 

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YOU CAN SEE WHY CONSUMERS BUY

Canstar Blue has released some figures expressing the factors behind the purchase of certain products. What with increasing interest in appliances around the hardware channel, this study offers some interesting, although not altogether surprising, insights. Value for money, functionality and energy efficiency came out on top most often.

The following percentages indicate the relative importance of different attributes when buying an appliance. The chart included separates out the energy efficiency component for the sake of showing the substantial difference in its importance as a buying factor between the various products.

Source: Canstar Blue (www.canstarblue.co.nz).

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DO KIWIS NEED AN ATTITUDE ADJUSTMENT?

Roy Morgan continues to look at the attitudinal statements made by Aussies and Kiwis around the environment and green issues. Looking at the latest results, it appears Kiwis certainly identify themselves as environmentally conscious, but are perhaps somewhat hesitant to spend extra dollars on environmental friendly products.

So Kiwis come out slightly less “green” than our Aussie counterparts. From these figures, there is further scope for educating the market and consumers on the long-term cost effectiveness of energy efficient products. The following outlooks are dated December 2013.                       

Source: Roy Morgan New Zealand (www.roymorgan.com)

 

Australia

New Zealand

“Environmentally friendly” products are overpriced

67.9%

75.4%

I try to recycle everything I can

88.5%

86.4%

At heart I’m an environmentalist

58.3%

60.5%

Threats to the environment are exaggerated

32.2%

32.5%

If we don’t act now we’ll never control our environmental problems

76.3%

79.2%

I avoid staying at accommodation that does not have genuine environmental policies

18.7%

14.7%

 

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