Green USPs for SMEs

In this article we will examine Green USPs for SMEs. This means Green Unique Selling Points for Small & Medium Enterprises.

Recent years have seen the emergence of issues relating to the environment and sustainability being elevated throughout society. This has fundamentally changed the marketing environment in which enterprises of all sizes operate in. ‘Green marketing’ is a wide-ranging process that ranges from outward-facing, environmentally-friendly branding to elemental product development. This is relevant throughout industries, with sustained societal pressure as well as governmental regulation and incentivisation. 

Organisations and brands which are or claim to be environmentally conscious, ultimately represent a spectrum. This spectrum ranges from holistic green products/services to recyclable material labelling. Some brands participate and promote green initiatives and/or support green causes, with direct financial support from sales.

Businesses now recognise the many benefits of having a green USP (Unique Selling Point) in their business.

Green Marketing: Exclusive to Big Brands?

The conventional view of environmental sustainability was as an expensive preserve of large companies who could absorb the related additional costs. This view is still held by some SME operators. However, there is londstanding evidence that embracing sustainability can increase profits and productivity even in smaller operations.   

There are a range of environmental and sustainability related measures that have been adopted across industries, particularly larger businesses in recent years. Moreover, there has also been the emergence of an expanding green economy, with a number sectors including for example, renewable energy. 

But, the reach of environmentalism is far more wide-ranging than this, with most large companies endeavouring to systemic environmental reviews. This sees environment impact assessments being carried out across these businesses operations and supply chains. Often, businesses will then use these environmental assessments to understand where environmentally friendly alternatives can be instituted.

Further, it also enables businesses to balance output with environmental harm. This can see alterations to business operations, processes and supply chains. Amazon is a central example of this, with their emphasis on a climate pledge on energy usage, sustainable operations, improved packaging and an ethical supply chain. The brand then uses these environmental measures as a central part of its communications strategy.

A further example of this environmental focus is plant-based meat alternatives from McDonalds, who, like Amazon, use these environmental measures as a central part of their marketing strategy. This is complemented by communications around organic sustainability concerning their meat-based product offerings. 

These ever-growing sectors have had an impact on more traditional industries, for example the fossil fuel industry which, through consumer and regulatory demand, are having to evolve. This has provided a backdrop for SMEs, with suppliers and buyers moving in a more sustainable direction. Although, typically SME operations by their very nature don’t have the environmental footprint of larger entities, they still can have a notable impact. It is the recognition of such an impact that can provide SMEs with significant commercial opportunity as exemplified by big brands such as Amazon and McDonalds.

Consumer Attitudes and Demands

Alongside increased governmental regulation and incentivisation, there are increasing consumer demands on brands relating to their environmental responsibility. In 2020, Deloitte UK released a report on environmental attitudes among consumers. It found that 43% of consumers actively chose brands due to their environmental values. Moreover, the same study found that 38% of consumers have reduced the amount of products and goods they buy. 

These findings clearly assert that an increasingly significant number of consumers consider the environment profile of a brand they engage with. SMEs must consider how they can project environmental profiles that facilitate capturing this consumer base. As such, SMEs need to consider streamlining their marketing towards these consumers who spend less freely.  

SMEs: What is Developing a Green USP?

The consumer context in which SMEs are operating within has changed in recent years. Established multinational brands are dedicating large portions of their marketing budget to projecting a sustainable and environmentally conscious image. It is therefore important that SMEs engage in similar activities, albeit at a far smaller scale, to effectively engage modern consumers. This can be achieved in a number of ways. At a basic  level, simple measures like eliminating unnecessary single-use plastic can help to change the image of a small brand.

Further, spending slightly more on packaging to ensure its fully recyclable can elevate products in the minds of some consumers. Moreover, general recycling incentives among staff can help project a sustainable image as well as efficiency. This staff environmental incentivisation is particularly relevant, as it encourages staff to act as environmental ambassadors within SMEs. This is then projected into interactions with customers. 

Furthermore, a simple measure like an SME investing in renewable energy can be harnessed not only to save money in the long term, but act as an effective marketing tool. Fundamental to SMEs developing green USPs is a willingness to use simple environmental steps they take in their operations, and using them as a central part of their communications. A key part of this strategy is effectively harnessing digital platforms to engage a younger demographic and educating them on issues of the environment and sustainability.

Green SMEs in the Hospitality Sector 

The hospitality sector is a broad, international industry that encompasses businesses and brands of varying scales. The industry has a large environmental impact, through high food consumption and energy usage. There has been a significant move within the sector towards brand differentiation through environmentalism and sustainability. Consumers increasingly make environmental considerations when making purchase decisions in the hospitality sector, particularly younger demographics. A 2020 IBM study found that 41% of consumers look for brands that use organic ingredients. This gives an insight into the utility of elevating the sustainability of ingredients for SMEs to engage consumers. 

Furthermore, recent years have seen the emergence of the ecotourism industry. The sub-industry is centred on boasting environmental credentials as a fundamental USP of individual businesses. This encompasses corporate and independent enterprises, as such it is an outgrowth of the increase in emphasis on corporate social responsibility. 

Heckfield Place – Hampshire

A key example of the ecotourism industry is Heckfield Place in Hampshire, England. This hotel’s biodynamic principles, biomass energy production and innovative composting system are a key part of its USP. 

Silo – London

Another example of effective green USPs is Silo, the UK’s first zero-waste restaurant, whose composting machine generates 60kg of compost from its food scraps everyday. 

Wild Food Café – London

London’s Wild Food Café serves organic products and uses only eco-friendly and biodegradable materials. Uniquely, this example adds 99p to bills to help plant a fruit tree in the developing world.

Green SMEs in the Retail Sector

The retail sector has been subject of much criticism due to environmental concerns surrounding the ‘fast fashion’ industry in particular. This provides opportunities for SMEs in the sector to engage in fundamental differentiation through sustainability principles. A 2020 study from McKinsey and Co found that 63% of consumers consider a brand’s promotion of sustainability as an important purchasing factor. This asserts the utility of smaller brands engaging in green principle emphasis to compete for consumers attention against less environmentally conscious large multinational competitors.

This is reflected in the rise of responsible fashion brand Nobody’s Child who have become a significant part of women’s fashion in the UK. This brand emphasises there sustainability goals and lay-out a responsible brand commitment, which includes standards on sustainable materials and waist reduction. There is also a growing recognition of the level of consumer concern for sustainability among established large retailers such as Asos. As a retailer they have moved to 100% recyclable bags. 

A 2020 study from RSA found that 35% of women intend to buy fewer clothes in the future. This asserts the impact of the increasing expectation among consumers that quality rather than quantity will likely help characterise the future retail sector. Further, the research also found that during the COVID-19 pandemic, 28% of people are recycling or reusing more clothes than normal. This provides opportunities for smaller clothing brands to engage consumers on sustainability and durability rather than price. This helps level the field against larger, lower-priced competitors. 

Moreover, research conducted in 2020 by IBM found that 57% of consumers are willing to change their purchasing habits to help reduce negative environmental impact. This may provide SMEs with an opportunity to engage consumers in the future, who have previously ignored their business because of the negative connotations that large retailers hold when it comes to sustainability.

Summary: Green USPs for SMEs

The creation of green USPs for SMEs is a process that can be systemic or relatively simple through implementing a few initial steps. It is concerned more with the overall identity and operations of a business, rather than just its marketing efforts, as green marketing should act more as a complement. There is clear evidence that consumer expectations and demands are changing, and with that comes a level of opportunity for SMEs across sectors. In a crowded digital marketing space, it is essential that SMEs look to provide clear and unique communications, in order to stand out. Moreover, it is a green USP and clear communications around this that can help to engage consumers in such an environment.