Circular Economy in Practice #3: 6 Key Strategies To Impact Consumer Markets
How do consumer markets need to change? What business models are rising with circular economies? How are our shopping habits going to evolve? How can designers and manufacturers best do their share?
In this episode, we pay a visit to Ditte Lysgaard Vind and review six strategies that have already started to prove successful on consumer markets, thereby accelerating the transition. For each one of those strategies, our editorial team highlights success stories from around the world, reviewing how those businesses leveraged the Circular Economy narrative to gain a competitive edge.
Check out the Circular Economy series page for complementary resources & bonus materials.
Produced by Camille Duran
Coordinated by Han Nguyen
Published by Gabriela Lemos Borba
Senior Editors Eleen Murphy & Joshua Burguete Kirkman
Transcribed by Tuly Sarah Costa
Music Credits: License by Ins. Green White Space.
TRANSCRIPT FROM THE EPISODE
Camille Duran (CD): Hey before we start on behalf of all the team, I wanted to say thank you for tuning in. i don’t think we do this often enough. We are growing fast, we are having fun and we do value the time you spend listening to this show there are a lot interesting other options and also a lot of sh*t programs you could be consuming instead. So thank you we do value your support and we are constantly pushing ourselves to deliver alright lets go…
CD: I feel like finding a co host for this episode at least to help me set the stage and that’s a good reason for me to get out of my cave a little bit. Let me figure this out. Oh I know someone.
Ditte Lysgaard Vind (DLV): Ditte?
DLV: Hey Ditte its Camille.
DLV: Hey how are you?
CD: Good. And you?
DLV: Great, thanks.
CD: Are you in a mood for a circular cup of coffee?
CD: Alright I am on my way.
DLV: Cool come on by.
CD: Alright cheers….
CD: My co-host today is called Ditte Lysgaard Vind, she is a circular economy expert, a friend of the show and her focus is on stakeholder management and communications. I like working with circular economy because many of the experts and inspiring figures are women and it makes our life much easier when trying to create gender balance on the show which we dramatically failed in our climate finance series, for instance. But please know we are trying hard.
ROBOT VOICE: Telephone transportation machine ready to go
CD: Yeah thank you that will be quicker. Ummmh can you walk the dog as well please?
ROBOT VOICE: Of course!
CD: Great and can you ask your husband to do the dishes?
ROBOT VOICE: Why not?
CD: I mean I could ask you but for the sake gender balance…
ROBOT VOICE: As you wish.
CD: Well thank you guys. You are definitely better than Siri.
ROBOT VOICE: Indeed, Siri does not do the dishes.
SIRI: I’ll pretend I didn’t hear that.
CD: Let’s go… In the meantime, if you haven’t listened to the previous episodes of our series, Circular Economy in practice – now is a good moment.
You’re listening to the Green Exchange, chapter three – your third chance to get practical with Circular Economy!
DESIGNING FOR CIRCULARITY, LONGEVITY, AND SHIFTING BUSINESS MODELS
[SOUND OF DOOR KNOCKING]
CD: Hey Ditte.
DLV: Hi, come on in.
CD: How are you?
DLV: Good! How are you?
CD: What a surprise, huh?
CD: Oh the microphone is set up and everything.
DLV: How lucky can you get?
CD: Was this prepared…?
Well, you are here to help me little bit with setting the stage for this episode we are producing right now. As you know, we have been talking about municipal waste stream, which is done. We have bunch of case studies out there. We’ve talked about industrial symbiosis. Now I feel it is really time to start talking about consumer markets and all the changes that need to happen on the supply chain and so on. I don’t know how to structure this episode. So I thought I would give you a call.
CD: There is the discussion about supply chain and what happens to the stores. Let’s talk about designing those products and the way things need to change. Like I suppose if I am a manufacturer or if I provide some sort of services, at the design stage, I need to rethink.
DLV: I mean, design is the absolute essential piece of circular economy whether it would be designing a particular product or business model or what not. How do you actually make sure that what you are designing is able to be redone later on, reused in different ways. Which means, that whatever product that is need to be disassembled easily and up-cycled.
CD: So designing for circularity, basically.
DLV: Yeah. And there are a million ways to do that. Another important point is to design for longevity and to make sure that products actually last.
[AUDIO CLIP: “Ok. Take this yogurt for instance. How can we make it more circular? Because right now, it is only 3% circular.”]
CD: All those decisions that are being made by the product or service manufacturer or company, maybe that’s a good way to structure? Like, dedicating chapters to what manufacturing companies can do or what are going to be the changes there, and then changes around the modern consumption behaviour, what used to happen from that angle?
DLV: Yeah…For me, it’s all about the circular economy presenting an ideal opportunity for consumers to engage within sustainability, without having to compromise on price, design, convenience and all that.
CD: Alright. So everything should be calibrated for the consumer to be happy or not have to spend more money or drastically change habits. It should be a natural choice.
DLV: Yes, it should be the natural choice. One thing they do have to do, however, is change habits. Going towards the product as a service business model means that consumers need to be ok with subscribing to services more than buying products, which is a challenge for consumer markets. It is a different commitment. There are a lot of good things in it but it takes initially…even just like signing the subscription can be a barrier if you are not really good at marketing towards the consumer, making sure that they are safe and comfortable in the process.
CD: So, if we are to dedicate a section of the episode to the product as the service, would that make a sense to you?
DLV: Yes, that would make sense. To me, product as the service is a super interesting business model because what it does is completely change the incentives of the producer. Where you used to have your business growth based on how many products you were able to sell, you are now basically creating your economic gains through how long your products are able to last, because the longer you are able to circulate them the more money you’ll actually make. And also a simple thing for business is that if you’re actually in contact with your consumers at that exact point when they’re disposing a product or passing it on, then that’s a unique marketing opportunity. That is exactly where you want to be in contact with your consumers. So that, for me, is an extremely exciting change in the business model.
CD: How about sharing economy and trading products as an asset? This is called making markets more liquid, because you organize the number of transactions for each products or services in the market.
DLV: The shared economy and the digital platform around it is really enabling us to have a lot more transaction around whatever products we might have. And I think there is a huge shift happening in our relationship with our products and we are getting more and more used to passing them on, not just putting in a cupboard.
SHORT INTERLUDE: HOW DO YOU LISTEN TO THE GREEN EXCHANGE PODCAST?
“My name is Jakob Economou and I work with Cleantech Innovations. I just listen to Green Exchange on my way to work or on my home after work. I think it’s really great podcast, and great discussions. I have learned a lot from it.”
BRANDING THE CIRCULAR ECONOMY – MAKES SENSE FOR SUSTAINABILITY & BUSINESS
DLV: How do we actually brand circular economy in a way that is positive and something that people would like to be a part of? For me what I am looking forward to participating in and how to create the narrative of circular economy and how to really make it in a positive engaging way for consumers.
CD: So how do we communicate and narrative that is compelling enough? But you know, I get the feeling that if I am a consumer, taking the shared economy services for instance, when it’s going to make sense financially or economically for my purchase, and it is easy enough, thanks to the technology that enables us – I got it in my smartphone or have access to the information or I know where to go and buy – I feel like lot of people are jumping on the wagon without even really knowing that what they are doing or they are buying is really circular. Because the economic driver and technology enablers are there, it becomes sort of no brainer.
DLV: It’s not one or the other. I completely agree that the reason why circular economy is really catching on, and why there are a great number of businesses that are really pushing the agenda, is because it makes sense. That’s the beauty of circular economy. It makes sense for economic perspective as well as sustainability point of view. But it’s not one or the other, because what we are doing right now is a systemic shift. We really need to go to a number of ways and there are definitely lots of things happening just based on the fact that is common sense. But we really need to push it from different angels. Communicating that change is quite essential in my belief.
CD: Ok so, we can look for case studies where businesses or organizations in general have ben making great efforts in communicating the concept, and disseminating the narrative. Would you be happy if we heard a podcast episode about these points?
DLV: I would be very happy for that.
CD: Ok, great. Hope we can deliver this now that you’re putting on pressure. I am going to get back to work. Thanks for taking some time and we will be in touch soon.
DLV: Cool. Thanks for coming by.
CD: Of course.
[GANDALF CLIP: You shall not pass!]
CD: Ooops, sorry, that’s not where I want to go anyway, so…yeah, I will find another way.
[CAMILLE RETURNS TO THE STUDIO]
CD: God, this guy was angry. Ok, so where were we? Where was I? Yeah so Ditte helped us define how to segment the consumer market discussion. We talked about:
– Designing for circularity,
– Product as a service,
– Designing for longevity,
– Reuse, Repair and upcycling,
– Sharing schemes,
– and effective communication strategies.
RECYCLING FISH NETS, RENTING DIAPERS, AND OTHER CIRCULAR ECONOMY STRATEGIES
CD: I put the team on a hunt for PRACTICAL EXAMPLES for each one of those strategies. And we have Eleen and Josh on the line, who are going to point us to case studies for each chapter.
CD: How are you guys doing?
Eleen Murphy (EM): Hi Camille, we are doing well!
CD: So I should mention before we start: This is not an endorsement section. These companies do not pay us money to get exposure.
By the way, it will always be clear to you when companies are funding the show. We sometimes collaborate around content marketing but our editorial independence and integrity is not for sale. let us be clear. We should we start with “designing for circularity”. Eleen, what have you got on the front?
EM: Well, designing for circularity means real commitment from a company, right? I have found this company manufacturing carpets for residential and business sectors and they have become the first carpet manufacturer the EMEA to adopt cradle to cradle design. And they are really pushing towards circular economy.
CD: And their name is?
EM: Their name is Desso Carpeting. So, on their site they have lot of information actually about what they do and actually do it. They explain that to close a loop, you have to be able to take used goods back and recycle or reuse the materials. So for them it means they’ve set up the system to collect used carpets and they’ve developed also what they’ve called “take back technology” to receive used materials and to recycle them. So that’s really good.
CD: When we talk about designing for circularity, it’s not only the product itself but it is also circular supply chain, right?
CD: Great. So we put the link on the page and we can give an example maybe for designing for longevity and that’s you Joshua working on that one.
Joshua Burguete-Kirkman (JBK): I have found this really interesting fashion designer. He’s called Cridland and this guy has gone out and made a sweatshirt that he has guaranteed for thirty years. So think about that for a second. One of the things about longevity in fashion in particular is to understand whether something is actually going to be in fashion still after 30 years. And I guess what Tom has done so well here is that he has managed to make something that is every day. We’ve have seen this style of jumper stay in fashion for so long. I guess you can assume that after 30 years from today the same style will be relevant still. In terms of winning over the message of this type of fashion, I can read out some names here, Leonardo DiCaprio, Hugh Grant, Stephen Fry, James Bond, Daniel Craig, etc. James Bond wears that! May be it is bullet proof!
CD: Well, alright, that’s a great one. We will put the link as well. I want to talk about product as a service that was a big one with the discussion with Ditte. It’s a major shift. There are lot of great case studies out there, we had to pick one. It was you Eleen working on this. What’s your choice?
EM: Well, my choice is actually nappies or diapers, that’s what called in America. And this is one of those things that are very hard to deal with, very hard to think about how to recycle them. Parents are usually very busy; they don’t really have the time to maybe wash the reusable ones for example. So it turns out not only is there reusable nappies and they are well designed and easy to use but increasingly in Europe we’re seeing companies cropping up that provide reusable nappy rental schemes, and laundry schemes. So what they do is that they rent out nappies, maybe to the parents home and the nappies are collected at the end of the day. They’re brought to laundry place to wash them and then brought back again in next week or next day. So that’s pretty interesting.
CD: So I pay like a subscription as a parent? For me the move is the same, I put it in a bag and someone picks it up, washes it and brings a bunch of clean nappies for the coming week.
EM: Yes so it is a really great service. Takes a lot of pressure off the parents as well. The service or the company is called Lavanda in Italy. They also present education seminars to spread awareness to parents, telling them about the advantages of washable nappies, compared to disposable ones. So there’s health and environmental advantages as well. So that’s also really interesting as well.
CD: Reuse, repair and upcyling, a number of companies are doing great work in that direction as well. Josh, your extreme sports fibre influenced you in your choice here.
JBK: That’s right! Well, I have found this really fascinating company online, called Bureo. I think I am absolutely butchering the pronunciation, “Bureo” what do you think? Is that right? [Laughs].
Bureo, so they are from Chile and they’ve come up with the idea of ‘net positiva’ which is a really cool label for what they’re doing. They are collective up old fishing nets, and the fishing nets are huge problem in the ocean around the pacific. So, they are grabbing the fishing nets, they are processing them and actually they are making skate board out of this old fishing nets. Fascinating stuff!
CD: So that would be an example of upcycling, right?
JBK: Yes they are finding another use, yeah!
CD: I guess repair and reuse of fishing nets are obvious one here, they make new products and there’s quite some added value. When you sell a skateboard you don’t sell it for ten bucks! It’s probably a good market as well.
JMK: That’s right. You know these skateboards are going like, you know, you can spend like 200 dollars for a skateboard. So being able to create this new product, upcycling from the old fishing net, one that has been used well for sure, it has probably done its job. But then they break down and the fisherman usually would just cut them in drifts in the sea. They have managed to find a way to stop that from happening. It is also creating a new a product in the same process.
CD: Great. That’s a good one. Eleen, sharing schemes?
EM: Yes, so, I picked an example that everyone is kind of aware of, which is car sharing or ride sharing, like Uber or that kind of thing. There’s a quite a lot of them. The one that I picked that stands out in Europe is BlaBlaCar.
EM: Have you heard about it, guys?
CD: I have used it many times.
JMK: [Speaks French].
EM: Yes it is a French company. So they are the world’s largest long distance ride sharing community apparently. So, what happens is drivers and passengers can connect using this service, and then they agree to travel between cities together and they share the cost of the journey. So that’s really great. And it is very popular as well. There seems to be like 25 million members across 22 countries now. So that’s Impressive.
CD: So, That’s really great example which is very large scale now. I think that car industry is really adjusting to this new company. Can you talk about the numbers and if there any threats to the car industry in Europe?
EM: Apparently, according to recent study, this could trim global vehicle sells down by five hundred and fifty thousand by 2021 and cost manufactures more than 8 billion dollars in lost revenues. So, you know, it’s a big change!
CD: Absolutely. It’s a good one. Last but not least, we were talking about effective communication strategies and how brands are taking their customers on board on their journey towards circular economy, and are not shy on communicating their differentiator. I think that Joshua have a good example.
JMK: Look, I have a really out the box example. Once again it is in the fashion industry which you know, the fashion industry has had a very big dirty secret for far too long. This one is called MUD Jeans. They are a label who basically releases the jeans for 7.50 Euro each month.
CD: So it’s product as a service.
JMK: That’s correct. It’s product as a service but the way they are communicating is so clear and easy to understand, and the options to the consumers so great in my opinion. So, basically, you get three options: you get the jeans, you decide to get hold on to them, if you like them. So that is the very straight forward one, very much business as usual. But, if you feel like changing them up or get a new pair, you simply just return them and select the other pair you like! You continue to pay the monthly fee but you have a completely new item to wear and ‘dance the night away.’ At the end of the day, you send them back and you get a 10 Euro voucher to use again on something else. So, it’s a fascinating way for people to keep their wardrobe changing whilst not wasting any valuable materials like cottons and all the energies that embedded in that material.
CD: When you google them, MUD Jeans, their tag line is ‘Circular Denim.’ They are very upfront about it.
JMK: That’s right. They are very clear and that’s what make these kind of proposition so powerful, because if you are not clear about what’s going on with this type of wearing someone else’s jeans, that’s kind of weird for most people. So, you have to be really clear about what you are doing, why you are doing and what the other benefits are to do it other than just environmental. With 7.50 Euro, you get to have a different pair of jeans each month, if you wanted to. So there’s a different value, not just environmental, it is actually a fashion value proposition too.
CD: Alright. Thank you, guys. We cannot get more practical within the time we have. We should so this more often.
EM: Yes, it was great fun!
CD: Please note that we are going to investigate those strategies further in coming episodes. We will explore how they are applied to textile and fashion sector. But before that we have a surprise coming up.
I got to chance to talk economics and transition with the vice president of European Commission, Jyrki Katainen, currently in charge of Jobs, Growth, Investment and Competitiveness. And in this interview, he is making important announcements. So make sure you don’t miss out. We’ll also talk to Bas de Leeuw, Managing Director of the World Resource Forum, out of Switzerland.
Before wrapping up, I want to mention that we are going to start live streaming our events on Facebook, so you can participate in the debate from your living room.
So what you can do right now is open Facebook….come on, everyone is waiting. Search for ‘The Green Exchange’. You’ll see my grandmother with blue headphones on the banner, click ‘LIKE’ and we’ll keep you posted from there!
That’s all for today. Hope you liked it. Coming back soon with more green knowledge, inspiration and entertainment. Keep up the good work, in the meantime.