Behavioral Economics Approaches to Nudging Sustainable Consumer Choices in Retail Environments

Abstract

The problem of the global retail industry is extremely acute: an ongoing intention-behavior gap does not allow eco-friendly consumers to choose sustainable goods during the purchase. This study can assess the effectiveness of behavioral economics, namely green nudging, in eliminating this gap in physical and electronic retail. The study uses a mixed-methods technique that combines frameworks of choice architecture and recent experiments in the field to examine how minor alterations of the decision environment can affect consumer choice. The results can be statistically analyzed and show that the intervention with the highest effectiveness is Default Nudges, which has the highest 48% rate of conversion into sustainable options, which is three times higher than the base control groups. In addition, the use of Social Norms and Visual Salience led to the stable increase of the adoption of eco-labeled goods by 15-22%. The researchers find that it is statistically more effective to reduce choice friction than to use informational campaigns; consumers are more likely to forego a sustainable choice by a margin of 32% when they are asked to take any extra cognitive burden or manual opt-in. The methodology investigates how the traditional models of prices were replaced by the System 1 intuitive triggers and how psychological cues may be mapped out to physical shelf positioning and digital interface configurations. The findings indicate that, with small effects, informational nudges can be used to produce large-scale changes in behavior at close to zero marginal costs, whereas structural nudges created through the inertia lever may have. The study finds that a quantifiable shift to a circular economy can be triggered by aligning retail architecture with human psychology and thereby contributing greatly to Sustainable Development Goals (SDG 12 and 13).