Consumer-driven market shaping in the era of climate change

Markets are complex ecosystems that extend far beyond a single party. By viewing markets as ecosystems, it is clear that consumers, firms, governments, and other parties are all market actors, connected and interdependent. Market shaping at the core is related to permanent successful changes within the market ecosystem that increase value creation.

In an attempt to understand what makes a market-shaping event successful, Lipnickas et al. proposed that effort reduction for market actors is key and can act as a catalyst to creating system-wide changes. Such effort reduction can be applied in the short, or long term. Interestingly, market actors (such as consumers and companies) can be willing to expend more short-term effort to reduce their total long term effort expenditure. This means that if companies perceive long term benefits, readjustments to their practices will be made early in order to maintain a beneficial position in the future. In fact, all market actors within the ecosystem will adjust accordingly in order to reduce their longer-term effort. While each market actor can influence market-shaping, the latter could also be triggered by an event. Climate change has become increasingly important in changing consumer behaviour and hence triggering consumer-driven market-shaping via consumer activism and purchase behaviour.