Incubating Consumer Behavior Change By Making Student Reuse On Campus Convenient
by Tamar Burton
The lesson of The Three R’s - Reduce, Reuse and Recycle helped us shape our view of the environment. Building sustainable communities is an important challenge faced by millennials and requires innovation to enact consumer behavior change. America’s college students have embraced new solutions pertaining to reducing and recycling, but the area that hasn’t been addressed properly is reuse.
According to research by the NPD Group, the average U.S. household has over $7,000 worth of unused merchandise ranging from electronics and furniture; to textbooks and sporting goods. Overall, this excess merchandise accounts for $1 trillion worth of idle surplus. Think about reuse, everybody does it, right? Typically, the response given is: yes, I promote reuse on these websites. But, probe further and inquire when they last engaged reuse, and the response is a surprisingly dated: a year ago, two years ago, or I don’t recall. Clearly, reuse is not an adopted behavior although subconsciously it is.
Tradepal’s one-click technology seeks to remedy this by making reuse easy and convenient. The platform simplifies the reuse process to enable users to list items in seconds, broadcast their virtual sale to their campus and friends, and seamlessly buy, sell and barter with peers. It also gamifies reuse as students are able to quantify their environmental impact through a dedicated carbon savings calculator.
Tradepal has recognized the problem with stuff and set its mission to make reuse as easy as recycling. Several colleges and universities have embraced the initiative to offer a convenient way for students to promote reuse by launching a campus reuse network on Tradepal. Tradepal made a commitment to action with CGI America to deploy its reuse platform to 100 college campuses and derive 20,000 metric tons of carbon savings from reuse by June 2014.
Millennials hold the key to a sustainable and resilient future. By integrating innovation on campus, higher education provides students with opportunities to experiment and determine the best methods for introducing sustainable solutions. These experiences will prove pivotal in scaling consumer behavior change beyond college campuses and into the mainstream.
"We are paying the price, the cost of carbon, but our economic system, our market system does not contain a price on carbon pollution. So it is effectively invisible in our economic calculations. It is an externality." - Al Gore
A recent Federal Reserve Bank of New York (FRBY) study suggests that millennials are retreating from big ticket purchases. After examining the trends, the study found that student debt reduces other types of borrowing such as mortgages and auto loans. After taking a closer look at the student debt numbers, it appears that the buying power of millennials has been significantly impaired. The majority of students are now graduating college with a negative net worth. This purchasing behavior shift could also be a symptom of the ongoing decline in disposable income growth.
The following statistics from FRBNY frame the issue students are facing:
student debt has increased from $260 billion in 2004 to $1.2 trillion in 2013
an estimated 37 million Americans have outstanding student loans
the average student debt upon graduation has increased from $9,000 in 2004 to $30,000 in 2013
Matt Taibbi’s article Ripping Off Young America: The College-Loan Scandal, in the August 2013 edition of Rolling Stone magazine, sheds light on the hardships facing college graduates as education costs are spiraling out of control.
It is worth noting that seven million of those 37 million borrowers are currently in default. The outstanding student debt now dwarfs both outstanding auto loans ($800 billion) and credit card debt ($700 billion). As student debt levels have quintupled over the last decade, it is fair to assume that it’s having a significant impact on the U.S. economy and the way millennials will consume in the future. The real question is whether this is a permanent or a temporary shift in consumer behavior?
Over the past decade, brands have made a shift to balance profitability goals with having a mindful purpose. A study by the University of Iowa found a direct correlation exists between brands with extensive corporate social responsibility and lower stock risk during down economic cycles. This brand loyalty is particularly found with brands that support environmental issues.
As millennials account for the over 95 million digitally connected Americans, they also possess a keen desire or ‘socially conscious’ to make a difference. Recently a growing number of studies have reported on the strong desire of millennials to embrace brands that support a cause they hold dear. Some studies have even labeled millennials the most aspirational generation.
A recent Nielsen survey found that 42% of 18- to 34-year-old millennials believe a response following a posting a complaint or comment regarding a brand should be received on social media within 12 hours. While millennials may not have the cash flow of older customers, brands have realized the possible consequences a negative comment could have on their brand image and sales and have taken greater steps to please millennials and to intercept their complaints prior to becoming viral.
This new shift in conscience capitalism is evident not only in what we purchase, but also how we cater to our customers. As is evident by the U.S. auto industry bailout in 2008 as GM, Chrysler and Ford were trying to avoid financial disaster. Feeling the effects of the financial collapse and burdened by gasoline prices hovering near $4 a gallon, consumers were ready for new solutions. Yet these industry giants lacked innovation and failed to listen to their customers as they continued on the path of business as usual.
During this time, Elon Musk, TESLA Motors CEO and Chairman, was on a mission to replace fossil fuels by changing the world by offering clean and renewable energy sources and reintroducing the electric vehicle. The EV1, sold during the late -1990’s to 2002 was not as fortunate as evidenced in the 2006 documentary, Who Killed the Electric Car?. When you contemplate the fact that more solar energy strikes the surface of the earth in a single hour than is provided by all the fossil energy consumed globally in a year, then the answer seems obvious. Now fast forward from the 1990’s and in a little over a decade, innovation may win this time around, and older brands may start offering the solutions that consumers are demanding rather than remaining on a path of resistance.
Public relations firm, Edelman conducted a global survey in 2012 and found that 72% of consumers responded they would recommend brands to others if they supported a good cause. Given this strong statistic, marketers should be keen to ignite corporations to evolve the various ways they envision, produce and market their products. The main selling point being, if they don’t, they will fall by the wayside.
By Tamar Burton
A new shift is occurring as universities around the world have set their sights on attracting students from abroad. In a quest to cultivate knowledge-based economies, governments around the world are making huge investments to improve the quality of their universities. The new bar is academic excellence. In the new global economy, to be considered well-educated, one must be exposed to ideas and people and transcend national boundaries. Human capital is being cultivated as global universities compete for the best and brightest. According to the NAFSA: Association of International Educations, it is estimated that international student enrollments contributed $21.81 billion to the U.S. economy during the 2011-2012 academic year.
Global Educational Forecast by 2025:
50% - almost all of this rapid growth will occur in the developing countries, with more than 50% in India and China alone.
350,000 students - the combined capacity to attract international higher education to foreigners in this decade by traditional source countries, with Jordan and Malaysia each hoping to attract 100,000 each by 2020 and Singapore, hoping for 150,000 by the year 2015
8 million - the projected number of students to travel to other countries to study abroad by 2025 - almost 3 times today’s numbers.
262 million students - the projected number of students seeking global enrollment in higher education by 2025
“Something big is happening…Making the most of human capital—a key to competitiveness and prosperity—is more and more the work of globalized universities competing for the best thinkers and the best ideas.”
- The Wall Street Journal, May 2010
Author: Tamar Burton
The new year has arrived with a renewed hope for the environment as the private and public sectors direct their attention to the growing shift from “business as usual” to renewable energy technologies. Sustainability initiatives and climate change garnered mainstream attention following last year’s increase in natural disasters. It also positioned 2012 as the most extreme weather year on record for the lower 48 states, according to the National Climatic Data Center.
In the months following Sandy, the second costliest hurricane following Katrina with an estimated $62 billion in damage, many neighborhoods are still reeling in the after affects. Natural disasters have provided the needed catalyst for sustainability initiatives as great turmoil resulted in a newly discovered interest in the growing climate problem. The extreme weather events in 2012 summarize what scientists are predicting to be the “new normal” as the climate continues to warm. As city officials in New York and New Jersey focus on rebuilding, the Clean Tech Revolution is gaining relevance. An example of one opportunity that is focused on smart growth is New York Governor Andrew Cuomo’s Cleaner Greener Communities Program. Launched in 2011, the program has established $100 million in competitive grants and plans to use innovative technologies to improve its economic, energy and environmental development while building sustainable communities.
With the advancements in clean technology, comes a need for greater social responsibility and increased stakeholder engagement. In the past months, we at Tradepal have engaged with various corporations, agencies and institutions to explore best practices to bridge the sustainability gap between consumers and businesses. The greatest disconnect we have noticed following the influx of social media and technological advancement, is how to accelerate consumer behavior change. According to psychologists Wendy Wood and David Neal, consumers often “act like creatures of habit, automatically repeating past behavior with little regard to current goals and valued outcomes.” When considering the adoption of new behaviors, it seems to come down to the intent and behavior of the individual.
In an effort to ignite behavior change, former President Bill Clinton appealed to advertising agencies last June at the Cannes Lions International Festival of Creativity in France. He asked advertisers to leverage the power they have to transcend their messaging and assist in shaping the future of our planet. In the digital age, sustainability is no longer a tree hugger concept. Organizations including start-ups, large corporations and state and local governments are embracing renewable energy, green transportation, electric motors, recycling and reuse initiatives as a means to create efficiencies while reducing our environmental footprint.
As we embark on 2013, the following concepts offer suggestions for transitioning consumers toward positive behavior change:
Video: The Ellen MacArthur Foundation
Author: Tamar Burton
Wishing you a very happy holiday with those you hold dear.
Happy Holidays from your Pal’s at Tradepal!
We are all familiar with the terms climate change and global warming, yet the process of identifying the cause and then effectively agreeing on best practices to reduce the issue has been an ongoing dialogue for over three decades. While commitments to reduce environmental impacts vary, it is important to achieve a declining average carbon intensity, or amount of carbon emitted per unit of energy consumed, from primary energy over time. These primary energy sources include fossil carbon fuels, solar energy, gravitational and rotational forces of tides and oceans, geothermal heat and wind energy are converted into energy carriers and then energy services. A major contributing factor to decarbonization is the substitution of cleaner fuels with low carbon content, with fossil fuels having a high carbon content.
How to limit warming to 2ºC
According to PricewaterhouseCoopers (PwC) newly-published fourth edition of the Low Carbon Economy Index, we have not taken the necessary steps globally to increase the rate of emissions cuts in major emerging economies to effectively slow down the warming trend. The PwC points out the brevity of the situation in a world that is far from being on target to achieve a sustainable or resilient energy future:
"Our Low Carbon Economy Index evaluates the rate of decarbonisation of the global economy that is needed to limit warming to 2ºC. This report shows that global carbon intensity decreased between 2000 and 2011 by around 0.8% a year. In 2011, carbon intensity decreased by 0.7%. The global economy now needs to cut carbon intensity by 5.1% every year from now to 2050. Keeping to the 2ºC carbon budget will require sustained and unprecedented reductions over four decades. Governments’ ambitions to limit warming to 2ºC appear highly unrealistic.”
Each year the global carbon budget is evaluated to assess the amount that has been ‘spent’ and how much emissions reductions are needed to achieve below the 2 target. The internationally agreed upon warming target of 2ºC above the pre-industrial levels which, according to analysts, is the threshold that could prevent the world from experiencing ‘at least six degrees of warming’ by the end of this century. The critical issue is that the 2º scenario is no longer valid. The PwC research stated that even if we achieve an improvement in our rate of decarbonization by six-fold, we still gain only a 50% chance of avoiding the 2 degree threshold. Note that an increase by 6ºC of warming is the equivalent to 10.8ºF.
An area of concern stems from the growing energy demands of emerging economies such as Russia, Mexico, and India. The rising GHG emissions from emerging economies have far exceeded the record decarbonization levels of industrial countries such as France, Germany and the U.K. According to the International Energy Agency, its figures published in May stated that CO2 emissions in 2011 rose to 31.6 gigatons, an increase of 3.2 per cent from 2010. Although many countries have stepped up their efforts to reduce emissions, without a radical policy shift we are on track for a warmer planet.
Opportunities for Low Carbon Technologies
For countries seeking new sources of economic growth, the next wave of growth could be derived from investment in low carbon technologies such as solar panels, electric cars, carbon capture and storage and innovation in biofuels. According to Reuters, in late 2010, China has committed to an investment of $1.5 trillion toward the advancement of seven strategic sectors through 2015. They identified several emerging sectors that accounted for approximately 3 per cent of the GDP at the end of 2010 which outpaced the growth of traditional industries. The strategic sectors include low carbon technologies, renewable energy, new-energy vehicles, bio-technology and next-gen IT.
PwC concluded that business-as-usual is not an option and cites the need for more urgency on climate policy. Much of the reporting on climate change is calmly described through published studies and scientific journals hoping to garner the attention of those who will change the predicted outcome. Upon reading the Rolling Stone article, Global Warming’s Terrifying New Math, one feels a jolt to reality and thinks beyond the daily bubble where we filter out the negative realities of life. What rings true is we have only one planet. As extreme weather events become more and more common, it is no longer someone else’s problem or experience we are reading about. Climate change has hit home and is the responsibility of consumers, policy makers and business as we enter a new age of uncertainty.
Just two years ago, the Climate Vulnerability Forum and DARA created a partnership to raise the profile of the impacts of climate change and with it the benefits of transitioning to a climate resilient low-carbon economy. Released in September, the 2nd edition of the Climate Vulnerability Monitor was developed to measure the global impact of climate change and the carbon economy at a national level. This latest monitor uses 34 climate and carbon related indicators to calculate and compare the vulnerability of 184 countries in 2010 and 2030, and covers four impact areas (environmental disasters, habit change, health impacts and industry stress).
Some climate inactivity findings include:
To add some perspective, based on the latest U.N. population projections, five billion people will live in urban areas by the year 2030. These cities of the future will not only bear the burden of climate change and its symptoms, including an increasing demand for power, transportation and sewage, but in another 20 years the population is estimated to almost double.
In recent months, the focus on the carbon economy has swelled following reports of extreme weather conditions. Although this climate issue has been recognized for years, it has been a challenge of translating information into action. Bloomberg has provided a list of sustainability indicators around energy investment, the growing cleantech sector and climate change, among others. The list also provided insight into how these areas are perceived by consumers. Here is a snapshot:
Following the growth of urbanization and the requisite consumerism that built our economy, to reverse that direction is an endeavor. While the impacts of climate change are continually being explored, proactive ventures to implement cleantech, reduce electricity demand and carbon dioxide (CO2) emissions, and create jobs are growing. From its early emergence in the 1990s, cleantech was used to describe a group of emerging technologies. Since then, it has defined the shift from business as usual to the evolution of second-generation products or services to accommodate 21st century energy requirements. In 2007, this area received a record $148 billion in new funding in the midst of rising oil prices and climate change policies encouraging the focus on renewable energy.
An example of job creation is found in Sacramento where over $250 million in federal funding has been secured for clean technology and energy efficiency over the past 13 years through the American Recovery and Reinvestment Act. A leader in cleantech job creation, the region currently sustains over 14,000 jobs and has demonstrated success as an engine for job development and economic growth. By 2018, it is forecast that three clean technology sectors will amass revenues in excess of $325 billion, these include solar photovoltaics, wind power and biofuels. The increasing use of the natural resources of wind, sun and water will offer renewable energy opportunities as well as avenues to invest in the growing cleantech revolution. Investing in the resilience of our environment is essential, yet it will take a consolidated effort to implement clean technologies, create jobs and encourage economic growth.
Following years of consumerism, technology has offered new interpretations of ownership. Competitive services touting the benefits of “sharing” and “access over ownership” have gained ground as viable alternatives. Consumers have revisited past generations’ routines of sharing, swapping, lending, and bartering. Businesses are allowing access to both tangible items and less tangible assets of space and skills. Sharing services are progressively gaining traction in densely populated areas. However, the question remains as to whether they can cross to the mainstream and gain massive adoption?
Enacting consumer behavior change is a challenging endeavor. In a recent review of consumer behavior change, psychologists Wendy Wood and David Neal suggest that consumers often “act like creatures of habit, automatically repeating past behavior with little regard to current goals and valued outcomes.”
In contrast to ownership, the sharing economy while founded on the concepts of community and sharing, attempts to find value through financial savings for consumers. Like the sharing economy, sustainability initiatives are focused on advancing social equity. Both sustainability and the sharing economy minimize waste, optimize the allocation of resources and reduce carbon emissions with communities. When considering their adoption, however, it seems to come down to the intent and behavior of the individual.
Recent findings suggest that pro-environmental campaigns emphasizing financial savings (self-interested) over protecting the environment (self-transcending) have generally been ineffective. Although advocates promoted financial benefits in order to accelerate adoption of eco-friendly behaviors (i.e., saving energy results in lower bills), researchers Thogersen and Crompton found that financial incentives may make people less likely to carry out environmental actions in general. Self-interested values, such as economic welfare, wealth and power were found to be in conflict with the self-transcending values of protecting the environment.
Another study, conducted by researchers Fowler and Christakis, reveals that acts of kindness and generosity travel in social networks up to three degrees of separation. They believe that “cooperative behavior cascades in human social networks” and that “there is a deep and fundamental connection between social networks and goodness.” They added that “groups with altruists in them will be more likely to survive than selfish groups.”
The resounding message of the sharing economy is that it fosters relationships and builds communities. So far, it has focused primarily on the self-interested values of saving money and making money from the idle resources in order to appeal to consumers. The sharing economy should incorporate self-transcending values such as sustainability and goodness to its core message in order to achieve behavior change and cross to the mainstream.
Our mission, at Tradepal, is to power peer-to-peer commerce. Our goal is to contribute to building smarter communities. Our passion is to encourage the Forgotten R of the Environment: Reuse.
At this year’s Leadership Keynote, at Dreamforce ‘12, General Electric CEO Jeff Immelt and Gen. Colin Powell spoke with Marc Benioff in the packed Moscone conference hall. The candid talk offered attendees an opportunity to hear the vision of the two leaders regarding the future of job creation, entrepreneurship, cleantech and their views on climate change.
The following offers some takeaways from the hour-long talk:
On job creation:
Gen. Colin Powell:
"What we need is super people who will start examining the issues. Businesses create jobs, and the jobs that have gone aren’t necessarily coming back. We need to go up the ladder of sophistication and educate our kids for the jobs that will be in the United States."
[Regarding GE] “We’ve moved all the appliance production from Mexico and other countries back to Kentucky. A combination of the new manufacturing technologies plus better labor management relationships are going to open up another era of competitiveness for the United States.”
I think owning your own supply chain is a huge competitive advantage. The era of inexpensive labor is basically over. Today it’s all about markets. Being infront of your customer, having short cycle times, better speed, that’s what wins. Chasing low cost labor is yesterdays playbook.”
Toward the last quarter of the keynote, Marc Benioff directed the conversation to the topic of the environment by stating a big issue on everyone’s mind is the topic of global warming.
"We had a group of PHDs study climate science. Global warming is real, it is caused by man. It is hard to tell what the impacts will be… what it means for the polar ice caps.What the U.S. is good at is driving innovation. Seeing how the entrepreneurial spirit can help solve big problems. Anytime you can align innovation and commerce with a social need, things happen faster. If you can align entrepreneurship, innovation and science with a need - it is incredible to see the forces that take place.”
Gen. Colin Powell:
"We want energy independence. All the poor are coming up into the middle class 1 billion, 100 million, from industrialization. Demand for energy is going up. New sources of energy is needed."
I’m fully in agreement with you that global warming is real. I think it is indisputable. Surely, It it in our interests to cut back on the emissions we are throwing up there.”
On the topic of Green Technology:
"We invest more now in Ecomagination than we did before. We think over the long term this is a winner and we are long term players. Innovation is the power.
Entrepreneurship is the power. Identify the need, create one or two market mechanisms in between, let’s go!”
Directing the question to Jeff Immelt, Chairman of The President’s Council on Jobs and Competitiveness, Benioff asked, “What does the evolution of the economy look like?
"The U.S. can completely own its energy future - it will be the shame of a lifetime if we don’t do it.This great resource that we have, I view it as a national strength, a job creator and an economic driver for the next decade.”