2. How can companies cater to customers who prioritize sustainability while also seeking affordability?
Consumers today are particularly price-sensitive, with many households facing higher energy costs and soaring inflation. Consumer behavior is shifting towards an hourglass model, where a growing segment demands luxury, customization, and sustainability, while a larger group is primarily focused on price. The middle market is disappearing, and companies need to adjust their product and service offerings accordingly.
It is crucial to understand and define target groups accurately. In a recent study conducted by EY VODW for a player in the insurance sector, varying willingness to pay for more sustainable insurance products was observed among different companies. Large enterprises showed more interest in such products than small and medium-sized enterprises. Companies must recognize these differences and respond accordingly.
Companies must therefore thoroughly understand their customers and their environment, define their buyer persona, engage in conversation with their target audience, and not shy away from proposing new value propositions. One approach is to involve younger and influential generations more in companies. These individuals bring their unique perspectives and interests, which can be translated into successful products and services.