Capgemini survey also finds interest in green vehicles continues to rise.
Capgemini’s annual Cars Online study is out and it shows continuing trends towards online shopping and greater interest in green vehicles. The study surveyed more than 3,100 consumers in eight countries: Brazil, China, France, Germany, India, Russia, the UK and the US.
Key findings:
- Almost 90 percent of consumers today use the internet to research vehicles.
Nearly 40 percent would like to buy a car over the internet, and half would purchase parts and accessories online, the main drivers being price discounts and dissatisfaction with the dealer/retailer process.
- Reinforcing the 08/09 findings, green vehicle ownership continues its upward trend: 41 percent own a fuel-efficient or alternative-fuel vehicle, up from 36 percent the year before, and 30 percent plan to buy one. Fuel economy and environmental impact are the primary reasons.
- Customer loyalty remains vital with 68 percent of respondents likely to purchase the same make/brand again as their current vehicle, up from 61 percent last year. In addition, 63 percent would purchase from the same dealer where they bought their current car.
- The vast amount of information available on the internet is resulting in a shrinking buying cycle. Over two-thirds of respondents begin the research process two to four months in advance. Over half of respondents expect a response to an enquiry made online within four hours, and nearly three-quarters said they would look for another company if the response was too slow.
- Less than half of consumers with cars still in-warranty have their vehicles serviced at the purchasing dealership, emphasizing the importance of delivering a strong aftersales and servicing experience. Spare parts and service typically offer a profit margin up to ten times greater than that of the initial sale.
Capgemini’s recommendations for the industry:
- Eliminate the bureaucracy and inefficiency inherent in the current buying model. Consumers want a faster, easier way to buy vehicles. Improved lead management systems, dealer optimization and online buying capabilities are among the tools that can be implemented to help achieve this objective.
- Get serious about online selling. Consumer interest in buying vehicles and parts and accessories over the Internet is real. Providing a viable online option will be a key to maintaining customer loyalty in the coming years. Models may vary – ranging from services operated by individual manufacturers or dealers, to sites run entirely by third-parties such as eBay, to joint ventures between the two – but online buying will become the preferred approach for a significant group of consumers.
- Focus on the aftersales and servicing experience. Keeping in-warranty consumers coming back to the purchasing dealership for servicing is imperative, particularly at a time when vehicle sales are slow. Service and spare parts operations typically offer a profit margin up to 10 times greater than that of the initial sale. In addition, the service experience can be a factor in securing customer loyalty and driving future repurchase decisions.
- Manage your marketing mix according to each market. A one-size-fits-all marketing approach won’t work in today’s diverse automotive marketplace. Understand where to spend on the web and where to continue to invest in traditional media. And be sure to incorporate new media channels such as blogs and discussion groups into the mix. Web-based discussion groups, in particular, are growing in popularity. Consider how you, as a manufacturer or dealer, can facilitate or participate in these kinds of discussion sites.
- Communicate with consumers before they reach the showroom. By the time vehicle buyers enter a dealership they are likely to have done a considerable amount of research and reduced their list of choices to one or two vehicles. The opportunity to influence them is nearly lost. Using new types of such as a Virtual Adviser, can help automotive companies grab consumers’ attention before it is too late.
- Go green now. Consumers, automotive companies, governments, utilities and other types of businesses will increasingly focus on alternative-fuel vehicles. In the near future, “CO2” will become as important as “mpg” in vehicle buying decisions. It is becoming clear that alternative-fuel vehicles have the potential to be a market-changing force. However, the continued development of this business will require collaboration both inside and, more importantly, beyond the automotive industry.
Technorati Tags: automakers, automotive, green, online-shopping
Countries today face numerous environmental challenges, such as climate change, air and water pollution, natural resource management, natural disasters and industrial accidents. The costs of not responding adequately to these challenges can be considerable, in some cases representing a significant drag on OECD economies, according to a new OECD study.
Based on a literature review in selected areas of environmental policy, the OECD report suggests that the economic costs of failing to introduce environmental policies that are “sufficiently ambitious”, can be considerable – i.e. a non-negligible share of GDP. For example:
The costs of not introducing the European Commission’s “Thematic Strategy on Air Pollution” have been estimated to represent about 0.35 1.0% of EU 25 GDP in 2020 (EC, 2005).
In non-OECD countries, 1.7 million deaths and 4.4% of the burden of disease (e.g. reduced years of healty life) have been attributed to unsafe water supply, sanitation and hygiene according to the WHO. Ninety per cent of the deaths involve children under 5 years old (Prüss-Üstün et al., 2004).
- Estimates of the economic costs of climate change vary widely, with recent assessments generating figures as high as 14.4% in terms of per capita “consumption equivalents” (Stern, 2007), when both market and non-market impacts are included.
- The costs of natural disasters (e.g. floods, windstorm, earthquakes, etc.) for the poorest countries can be as much as 13% of annual GDP (The World Bank, 2006).
- Inefficient management of the east Atlantic bluefin tuna fishery may be resulting in reduced fishery yields with a value of USD 1 3 billion (Bjørndal and Brasão) (2005).
Some of these costs are already being reflected in public budgets, firms’ balance sheets as well as household budgets (e.g. increased public and private health expenditures, unemployment benefits for out-of-work fishers, remediation costs for contaminated sites, dikes and other flood protection infrastructure).
Even when the costs of inaction are deemed important, identifying the areas where environmental policies need to be strengthened still requires careful comparison between the costs of inaction versus costs of action (the latter are not covered by this report). This report provides introductory perspectives on the methodological issues in evaluating costs of inaction, and discusses some of the future problems likely to be encountered in this very complex area.
Technorati Tags: climate-change, environment, fishery, green, greenhouse-gases
Capgemeni and Merrill Lynch’s new World Wealth Report finds that green investment activity among High Net Worth Individuals (HNWI) grew substantially in 2007. “In much greater size and proportion than in recent years, investors have been supporting innovative research and development initiatives in search of alternative fuels, renewable energy and other advanced technologies.”
Wind and solar were particularly strong sectors. “In fact, in the three years ending November 2007, gains in the wind segment exceeded 300%, while solar posted the highest growth in 2007, roughly 150%.” Additionally, the solar energy sector saw the greatest IPO activity in any green sector.
By the end of the year, however, the green energy sector was, like virtually every other part of the economy, “burdened by poor overall market conditions.”
Noting that, “Governments across the globe have played an active role in stimulating the growth of green initiatives, paving the way for lucrative market opportunities,” the report concludes that future investment opportunities will likely grow at a rapid pace.
Technorati Tags: green, investment-strategy, wealth
A new report from eMarketer takes an indepth look at the state of “green online marketing” and how the current wave of environmental marketing differs from the one that played out in the 1970s.
According to the report:
- The current incarnation of green marketing is playing out on the Internet.The We Campaign,a massive environmental awareness project launched by green activist and former Vice President Al Gore, has allocated a substantial portion of its projected $300 million budget toward online advertising.The campaign is using display ads,video ads,e-mail,social networking,mobile outreach,viral marketing and other new media tactics to push its cause.
- Corporations of all shapes and sizes are trumpeting environmental initiatives on their Web sites.Retailers (Wal-Mart and Home Depot), technology companies (Apple and HP) and packaged-goods manufacturers (Unilever and Procter & Gamble) are experimenting with large-scale environmental programs and road-testing them on the Web.
Some of these companies are also imposing environmental standards on their suppliers that have impacted product designs, materialssourcing, manufacturing, distribution and other aspects of the supply chain.
- Consumers who are on the receiving end of corporate green marketing efforts are using blogs and discussion forums to dissect and discuss marketers’ claims. Many self-appointed watchdogs are highly attuned to corporate “greenwashing”—that is,the act of misleading consumers regarding the environmental practices of a company.
- Consumers are increasingly taking the environment into consideration when making purchasing decisions. A majority of consumers perceive themselves as green on some level,and large percentages of consumers say they are willing to pay extra for eco-friendly products. Furthermore,consumers are demanding that corporations exercise the same level of environmental consciousness that they do,and many companies are heeding the call by taking a greener approach toward a broad range of their operations.
- How is today’s green marketing trend different from the one in the 1970s? For one,the Internet makes today’s communications loop immediate and virtually infinite. For every company that stakes out an environmental position, there is an army of fact-checking bloggers ready to parse the veracity of the claim. In addition,environmental crises have grown in complexity and severity over the past decades. In the 1970s,it might have been possible to view the pollution of Lake Erie as a relatively isolated phenomenon, but today’s ecological ills are generally perceived as intertwined.
The full eMarketer report Green Online: Growing Awareness is available for purchase.
Technorati Tags: green, online-marketing
The greener a supply chain, the more likely it is to be economically successful in the long term, according to a new study by Capgemini and the Global Commerce Initiative. Collaboration is the key to a new supply chain model that addresses changes brought on by environmental regulations, the study finds.
The total potential impact of this supply chain redesign is significant, including reduction in transport costs per pallet, reduction of handling costs per pallet, reduction of lead time, lower CO2 emissions per pallet and improved on-shelf availability.
The study found that a big impact on new sustainability parameters can be made when the following concepts are merged and implemented: information sharing, collaborative warehousing, collaborative city distribution and collaborative non-urban distribution.
While individual company improvements will be implemented based on assessments of the added value of certain solutions in their specific situations, that will not be enough for collaborative initiatives, the study says. “Collaborative initiatives need industry leadership in order to move forward.”
The realisation of the collaborative concepts that comprise the 2016 future supply chain architecture will require a number of initial next steps, driven by industry leaders. The study says action must be started in one or more of the following areas:
- Information sharing – driving the collaborative supply chain
- Collaborative warehousing
- Collaborative city distribution (including home delivery and pick-up)
- Collaborative non-urban distribution (including home delivery and pick-up)
- New ways of working together in the physical supply chain (including management of required investments, capabilities, organisational resources and design, incentives and measures, social regulations like working hours, etc.)
Technorati Tags: green, supply-chain, sustainability
The world’s carbon market is one of the fastest growing major markets in the world. New research from Point Carbon, a provider of research for environmental and energy markets, predicts that if the US joins a cap-and-trade system, the market will continue to grow to a massive $2 trillion by the end of the next decade.
The study predicts the US market would have a value of roughly $1.25 trillion by 2020. The EU cap-and-trade scheme, meanwhile, would make up about 23% of the world market by that time.
The study predicts an average value of 50 euros per unit.
The study assumes a model along the lines of the original Lieberman-Warner bill, which would lead to a 25% reduction in admissions from current levels by 2020.
The report’s author makes a good closing point: “Having a concept of the future size of the carbon market is important for at least two reasons. First, market volume says something about the number, size and kind of participants that a market can accommodate. Importantly, a large market involves not only compliance buyers and sellers but also financial players, who will provide liquidity to the market. Secondly, an indication of 2020 market size will say something about the place we think emissions trading will have in a future climate structure – not immediately after the end of the first Kyoto commitment period, but well into the post-2012 regime. This is important for long-term investors in sectors exposed to a carbon price”
Technorati Tags: carbon-trading, energy, global-warming, green
The carbon trading market is growing rapidly, but not fast enough to meet the commitments of the Kyoto protocol, especially among developing countries, according to a World Bank report, “The State and Trends of the Carbon Market 2008.”
The global carbon market doubled or tripled in value for all segments, except for projects in developing countries which saw a leveling off of market volumes transacted under the Clean Development Mechanisms
The global carbon market more than doubled to $64 billion in 2007, the report shows. The European Union Emission Trading Scheme (EU ETS) also saw a doubling of both value and number of allowances transacted to the tune of $50 billion.
There are significant problems with the market, however:
“The overall data in the report masks some key vulnerabilities—especially for developing countries. All developing countries face a demand gap sometime in 2008 when buyers realize that there is not enough time to fulfill Kyoto commitments with new projects, and demand will have not yet kicked in from emerging markets in the US and Australia that are expected to be players in a future market after 2012.”
Another problem is that market growth is limited by the uncertainty of what will happen after the Kyoto protocol expires in 2012.
An interesting observation of the report is the degree to which business and environmentalists are working together:
“The world has truly changed today when power company executives and investment bankers talk about climate risk and environmentalists talk about leveraging the power of markets. Climate policy has mobilized the world of private capital to work in favor of protecting the environment. In so doing, it has brought together two
widely different worlds with very little experience and knowledge of each other.”
Considering how widely different these two cultures are, it is quite extraordinary to recognize how successfully they have worked together so far to produce concrete action to reduce carbon emissions.
In 2007, some prominent investment banks tried to further bridge the gap between the two worlds, as they hired specialist carbon staff, bought small and boutique carbon originators and made investments in the “infrastructure” of the carbon market, including exchanges and registries.
Technorati Tags: carbon-trading, green
American consumers may talk “green” but they have a lot of walking to do to catch up to consumers in Brazil and India when it comes to being environmentally friendly, a new survey finds. The National Geographic Society and the international polling firm GlobeScan have launched “Greendex” a tracking survey of consumer choice and the environment.
Consumers in Brazil and India tied as most “green,” while those in the United States scored lowest, or most wasteful.
To create the survey, GlobeScan conducted Internet surveys of consumers in 14 countries, which together represent more than half of the world’s population and use about 75 percent of its energy. Rather than measuring each nation’s environmental impact, the Greendex compares the behaviors of individuals in four key areas: housing, transportation, food, and consumer goods.
Brazilians and Indians each scored 60 on the sustainable-consumption scale. Citizens of other nations scored as follows: China (56.1); Mexico (54.3); Hungary (53.2); Russia (52.4); Great Britain, Germany and Australia (each at 50.2); Spain (50); Japan (49.1); France (48.7); Canada (48.5); and the U.S. (44.9).
Housing factors included dwelling size; energy use for heating, cooling, and appliances; and water needs. Brazilians topped this category because they typically have smaller homes, rarely use air conditioning or heating, and rely heavily on on-demand, tankless water-heating systems.
Transportation behaviors measured included ownership rates and average usage of motorized vehicles, length of daily commutes, and utilization of public transport. Chinese scored highest on transportation, because, at least for now, most rely on bicycles or walking and drive few motorized vehicles per capita.
The foods category polled consumers on their consumption of locally produced foods, as well as their relative consumption of bottled water, meat, and seafood—products that typically have high environmental impact. Indians had the greenest food habits because they consume little meat and eat many fruits and vegetables.
The goods category looked at the items that people typically buy, reuse, and discard—including both day-to-day purchases and larger items such as televisions. Consumer preference for environmentally friendly products and packaging, as well as overall levels of personal consumption, were also considered.
The Greendex also found that people in developing nations felt more responsible for environmental problems and worried more about the impacts of global warming.
A few interesting findings:
- More than half of houses in the UK, US and Australia have 7 or more rooms.
- Only 5% of US consumers use public transportation most days, compared with 53% in Russia.
- 62% of Brazilians consume beef at least several times a week, the same as the percentage of Japanese who consume fish that often.
- 83% of Germans consume bottled water at least several times a week.
Technorati Tags: environment, green
Further evidence of the rise of “green investing” emerged today with the announcement that Kleiner Perkins Caufield & Byers has raised $500 million to target large companies pursuing “green” ventures.
Dow Jones Venture Wire reports that the energy-related fund was announced this morning with another fund that will bring the total being raised by the Menlo Park, Calif., firm to $1.2 billion.
Kleiner, which a few years ago began targeting fledgling ventures in areas such as biofuels and electric cars, now also wants to fund larger clean-technology companies that need bigger sums of money to get to market, said Kleiner partner John Denniston. Kleiner expects to invest anywhere from $10 million to $50 million in each of the companies – many of which already have revenue – and has hired an energy-investing expert from Goldman Sachs Group Inc., Ben Kortlang, to help run the fund.
A chunk of the money for the green fund is coming from Generation Investment Management LLP, the socially conscious London investment firm that was co-founded by former Vice President Al Gore, now a Kleiner partner.
Meanwhile, the New York Times reports that the Environmental Defense Fund has signed on to help Kohlberg Kravis Roberts & Company improve its green credentials.
Kohlberg Kravis’s partnership with Environmental Defense is aimed at creating measurement tools of environmental performance across several areas, from energy efficiency and greenhouse-gas emissions to water consumption and containment of toxic substances across all of its businesses.
The new partnership grew out of a watershed deal last year in which the Environmental Defense Fund and the Natural Resources Defense Council brokered an agreement with Kohlberg Kravis and the Texas Pacific Group to back their acquisition of TXU. In exchange, the companies pledged to reduce carbon emissions and abandon plans to build coal-fired power plants that would produce millions of tons of emissions that are linked to climate change.
Technorati Tags: green, private-equity, venture-capital
More evidence that going green can be good for business emerged from Ernst & Young’s recent forum on the evolving impact of climate change on business.
IBM’s Director of Corporate Strategy for Energy, Water and Climate noted, “Green initiatives have saved us money, saved energy and transformed our supply chain. All of it has been a good return on investment.”
There is one stark reality that hampers the greening of industry, however:
Consumers are demanding green products but expect the same functionality and will not necessarily pay more.
Some of the “Key Insights” of the forum:
- Green Initiatives are starting to benefit the bottom line.
- Companies must practice green strategies in-house in order to sell them.
- There is a new focus on sustainable products and services, rather than on measuring the carbon footprint.
- Firms should communicate with the public during the process of greening, not just at its completion.
- Green practices sthat are currently voluntary may soon may be mandated.
- The creation of a “Chief Green Officer” is a useful strategy for companies.
Technorati Tags: cleantech, green
