Consumers play a decisive role in the shift towards a circular economy
11 Sep 2018
When researching the influence of consumers on the transition to a circular economy, I came across a very compelling video on the World Economic Forum website: Mike Barry, Director for Sustainable Business for UK retailer Marks & Spencer, talks about the power of the consumer. He states that, among their customers, 10 per cent are passionately green, 35 per cent “like green,” but they want it to be easy, without sacrificing their lifestyle, and another 35 per cent are a bit more disheartened – “what difference can I make” – but if you provide leadership and inspire them with one little thing they can do this week, knowing that millions of others will do the same, then they are likely to change their behavior and consumption.
We all know that through their choices, millions of consumers can support or hamper the successful transition to a circular economy. The EU’s action plan on the circular economy recognises this by laying out five axes of action that help consumers make better choices. I will have the opportunity, at this year’s Swiss Energy and Climate Summit (SwissECS) in Berne on 19 September, to talk to two very different companies who work towards the ‘3 Rs’ of the first axis (encourage reduction, reuse and repair of products): Revendo and Ikea.
Revendo’s 60 employees repair and sell used Apple products through a webshop and seven branches in Switzerland. They offer a guarantee on their sale products and wipe all data through a certified process from the ones they buy. This enabled them to procure used phones from the Swiss police, who had originally planned to scrap them to ensure nobody accesses the data.
In 2017, Ikea operated 403 stores in 49 markets; its 194,000 employees design, make and sell furniture and homewares. Its recently established Second Life programme takes back used furniture and sells it in its stores. The seller receives the sales price in the form of an Ikea voucher.
There are several things that intrigue me about those two circular economy examples. Certain consumers want aspirational products and are willing to pay a premium for them. (And the fact that it is widely known that this product commands a premium price turns the product into even more of a statement, and thus more desirable.) It is interesting that some brands are so strong that consumers are willing to buy them second hand – so using the appeal of such particularly strong brands to extend the life of the product is a compelling way of furthering the circular economy. I hope to find out at SwissECS about scaling Revendo’s model: How many in the audience would consider buying a second-hand phone – let’s not forget the power of the haptic experience of opening a package containing the latest iPhone, carefully designed to justify the expense of the purchase (while still being significantly cheaper than a Tesla). And what is the potential of taking Revendo’s business model B2B – would companies consider buying used mobile phones and laptops for their employees? What incentives could the taxperson provide?
Now, Ikea does not exactly evoke the notion of “aspirational” in me. In fact, while I started buying from Ikea as a student, I had this idea for a long time that I would stop buying Ikea furniture once I got a proper job. (Having children changes many of one’s preconceptions.)
Among Ikea’s different circular economy initiatives, Second Life strikes me as particularly clever. In a world where consumers have infinite choice, and where you can buy almost everything at often wildly differing prices, building customer loyalty is key to a retailer’s success. With Second Life, Ikea has created an opportunity for customers to come back, and feel good about it., When you take into account that 545 million people visited an Ikea store in 2017 and then look at the numbers that Mike Berry mentions in his video (70 per cent of customers would make green choices if it were easy or they would see others doing so); then whatever one may think about Ikea’s drivers for setting up Second Life – the potential for impact is huge.
In my opinion, consumers will play a decisive role in changing existing processes towards a global, circular economy. Products with a strong brand could help to stimulate a change in consumer behavior and therefore catalyse that transition. And who knows what the future holds: Maybe consumers won’t see ‘cool’ products only as something trendy, but something that doesn’t contribute to global warming. Let’s check this in 2030.
Are you interested in this topic? Join our deep dive session on circular economy at the SwissECS 2018 conference on September 19 in Berne. Learn more.
Ulrike Linnig is Innovation Lead (Germany) at EIT Climate-KIC. Prior to that, she spent 13 years developing smart city, circular economy and smart energy strategies with technology leaders such as IBM, as well as transformation concepts for the public sector at Capgemini, a global IT consulting firm with more than 200,000 employees..
Related GoalGoal 9: Reboot regional economies