How are Brands becoming ‘Circular’?
The circular economy represents a chance for businesses to come up with smarter and more restorative ways to create, use and dispose of products. It’s a beautiful vision which sees waste designed out of the economy, where businesses plot a whole product or service life cycle in such a way that there are no ‘leaks’ and the supply chain is a neatly closed loop.
The idea of a circular economy concept is far from new – it was conceived about three decades ago – but it’s only now that this philosophy has started to make waves and inspire a new era of consumption. A number of brands are starting to sit up and acknowledge that waste in itself is a design flaw, and a missed opportunity.
But what exactly does it take for businesses to become more circular and seek to ‘close the loop’? I’ve compiled a list of different approaches adopted by brands who are disrupting the old, linear approach to business and revolutionising practices in their industries.
Selling Services not Goods
I spoke about this approach in my last article which sees brands remaining owners of products and offering access to its customers as opposed to one-way consumption. We could say that in the 20th century businesses were selling cars, now they’re looking to sell mobility. One brand making the shift is BMW, who are now offering by-the-minute rental of cars that can be dropped off and picked up in major city centres through their venture Drive Now. A key benefit for BMW is that the raw materials used to produce the cars remains an asset, meaning they have more incentive to produce cars that are highly efficient and built to last.
Promoting Second-Hand Sales
The second hand market is huge for most products and is something of an untapped opportunity for many businesses. Some smart brands are facilitating the second-hand sales of their own goods and turning a practice that’s already happening ‘behind their backs’ into an invaluable brand-building exercise. IKEA created a marketing push to highlight the beauty of its second hand furniture, offering its customers a digital flea market platform to sell their items on. It might seem like a counter-intuitive business model, but its exactly the kind of forward-thinking that creates an unrivaled brand following in today’s changing economy.
Designing for Repair
Some brands are empowering their customers with the information, tools and parts to fix their products themselves, and designing their products in the first place to make the repair process as easy as possible. Patagonia, an American outdoor clothing label, is one brand that’s created something of a cult movement with this approach. The company provides detailed guides for repairing and caring for its products, which are designed to stand the test of time. So how has a brand that says it actually wants to reduce consumption gone on to boost its business tenfold? Simply put, this newfound approach to economics and consumerism is attracting customers who identify with the message of Patagonia’s mission – “build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis”.
Waste = Food
Businesses are realising that any waste coming out of their production chain is a missed opportunity, and that value can be extracted through some ingenuity and innovation. Being able to do this creates a more circular business and potentially an additional revenue stream. NRG, an energy company, started exploring applications for the gaseous waste emitted from its power plants. With the help from D’Wayne Edwards, a former Design Director at Nike, the company managed to design a shoe made from carbon dioxide emissions. It’s being hailed as a revolutionary breakthrough which is expected to inspire similar projects that will see CO2 turned into everyday products. In the circular economy, the waste from one production chain can be the food for another.
Collection of Goods
Another approach that some brands have taken is to collect used goods from their customers, and turn the raw materials extracted into new goods. In the apparel industry, PUMA and H&M have set up effective ‘take-back systems’ which allows customers to take in unwanted clothes (from any brand) to their stores and receive discounts on future purchases in return. This creates a closed-loop production cycle as the raw materials collected are recycled or remanufactured into new apparel, protecting the brands from volatile cotton prices in the process. After its first year of launching, H&M collected up to 7.7 million pounds of clothing – most of which was used to create a sustainable denim collection.
Designing for Modularity
In the circular economy, products are designed to be durable, upgraded and recycled. One way of achieving this is through designing modular products which have parts that can be reconfigured. Smart phones are a main culprit for products which become obsolete a lot sooner than they should. With Project ARA, Google have gone back to the drawing board and are designing an ambitious phone made up of modules that customers could swap out when parts break or when new and improved updates are available. The idea is, the ability to swap modules would lengthen the life of a smartphone—devices can last five years instead of two—and reduce the waste accumulated in the rush to upgrade.
The circular economy is about creating a world that thrives while using our resources in a much smarter and cleaner way. Brands that are embracing circularity are going beyond Corporate Social Responsibility, and implementing a fundamental shift in the way they do things. It’s essential not only because the approach is far better for the planet and its finite resources but because tapping into circular principles can also yield significant economic opportunity. The brands of tomorrow are those that understand that the long-term health of their business is inextricably linked to the long-term health of the planet and those who inhabit it.
Has this article triggered your curiosity about Circular Economy and the world of Conscious Business?
We’ll be coming together with Thomas Kolster, author of the book Goodvertising on Saturday 22nd October at Hilltop Gardens, Naxxar. This a free event however spaces are limited. Book your spot here: http://challenging-advertising-as-usual-tickets.eventbrite.co.uk/
More info about the event here: https://www.facebook.com/events/506012826261612/