Capitalizing on the Circular Economy
What is the Circular Economy?
In a previous post, I mentioned that one of the five consumer trends driving the demand for green technology is consumers' preference for “circular solutions.” These circular solutions, which promote closed-loop systems, are part of the circular economy, an economy that prioritizes repair and recycling over disposal and new purchases. Traditional businesses may see the circular economy as a threat to their business models, but that can be short-sighted. Inside every threat is an opportunity, and there are multiple examples of companies making the most of this trend.
Refurbished Smartphones—This isn’t new, but it was brought to market not as a sustainable solution but as a way to address the sub-premium market. When I bought my last smartphone, my telco gave me the opportunity to choose from just about every make and model on the market, but they were all used and refurbished. I got an almost new phone at a lower price than buying a brand-new phone. It was a financial choice but it also saved a perfectly good electronic device from the landfill.
Certified Pre-Owned Cars—The other most common example of used product marketplaces is certified pre-owned cars. These are cars that are used but have been refurbished under the reputable oversight of the manufacturer. This gives the dealership the opportunity to sell the used vehicle at a premium and provides the buyer with a little extra piece of mind that they’re not buying a lemon.
Used Made New—I recently came across a toy store in the UK called Loved Before Toys. They take toys and stuffed animals from children who have outgrown them and give them “spa” treatments and creative backstories for a new life as another child’s beloved companion. Cute, right? It’s also another way to divert usable items from landfills.
How do we create new circular solutions?
Think hard. The right-to-repair movement is gaining steam. Not too long ago, California and Oregon passed right-to-repair laws mandating that companies provide ways for owners of their products to repair instead of replace their items. It’s reasonable to foresee laws like this passing nationwide and beyond. Is your brand going to get ahead of this trend and gain a halo effect from being a first-mover on a positive trend? Here are some ideas:
Return of the Repair Shop—What if when you returned your item online or in the store, and they asked you if anything was wrong with the product, they followed that question by asking you if you wanted the item repaired instead of returned? Or, what if Walmart or Target had a repair kiosk for small appliances in every store? You could get that toaster you loved fixed good as new for a small fee instead of throwing it out.
Repair Kits— What if when you lost a button on your favorite shirt or when the arm fell off your kid’s most beloved toy, you could go to the manufacturer’s website and find everything you need to do the repairs yourself and have it sent to your home?
Certified Pre-Owned Everything—What if certified pre-owned programs weren’t just for cars and expensive electronics? What if every company had a repairs department focused on giving perfectly good items a little extra life? Think of all the items you’ve owned and thrown out or dropped off at a thrift store that would have been better off being exchanged for a newer model. It’s probably a long list. Imagine a Banana Republic online outlet stocked with slightly less than mint condition dress clothes.
And last but not least, ask your customers what they want.
It wouldn’t be a Curio Research blog post if I didn’t plug research. If you’re not sure what your customers want, ask them. In this case when ruminating on a product extension or a new service, I would recommend a series of co-creation sessions allowing internal stakeholders to directly interact with customers in a structured format and safe environment. This methodology provides research insights while helping teams build customer context and empathy making for meaningful innovations.
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