Brands, desire and the circular economy

March 12, 2014

 

This blog was origially posted by Dragon Rouge

 

We’ve been building and supporting a linear economy for as long as most of us can remember, and brands have played a crucial role in making it work – they fuel the make-stuff, sell-stuff, throw-stuff-away model. And people, or consumers as they’re generally known, are fully bought in to this model of consumption.

 

In the world of branding and design, the more we work with the linear model, the more we see that it can’t continue to create value for brands. The resources and materials required to sustain its growth simply aren’t going to be available. Even if we ignore the negative environmental impacts from the waste generated, from a purely economic point of view, the model hasn’t got long to go before the cracks become canyons.

 

This challenge isn’t new, it’s what drove the original corporate social responsibility initiatives. Only now, we can convene around an economic model that looks increasingly set to revolutionise how we do business and how we consume goods and services. Philips already have a circular economy team up and running, as do Cisco and Kingfisher have committed to taking 1000 closed loop innovations to market by 2020.

 

The circular economy moves away from the planet-saving, community-enhancing rhetoric that is such a turn off for marketers and many businessmen and women. It states a clear, long-term business-led problem and poses a clear, long-term business-led answer. It turns costly, negative issues like waste, into positive, value-creating resources. There is far more carrot than stick and after four years of recession and slim pickings on examples where CSR or sustainability initiatives have created business value – we need the carrot.

 

Through Brand Futures and Family of the Future, Dragon Rouge has explored how brands can adopt closed loop, sustainable business models while continuing to present consumers with desirable propositions. The resulting concepts require significant change but ultimately provide additional benefits for the consumer and additional value creation for the brands.

For Argos, for example, we explored a circular business model built on the strapline Lease it. Love it. Argos it. In 2030 we see Argos leasing products that have been designed for disassembly, not obsolescence. Their loyalty has sky-rocketed as people choose to lease a whole package of white goods, consumer electronics and furniture from them. In turn, they provide first class services for upgrading, repairing and/or replacing broken items and ensuring the products they lease are performing to the highest standard. Manufacturers are required to design for repair, durability and ultimately disassembly, to facilitate the smooth running of the business model. When a product reaches its end of life, it remains the property of Argos, to ensure its remanufacture, ready to come back into the system.

 

By 2030 Primark is also operating a fully circular business model, enticing consumers to Subscribe to Style and boosting the UK economy with a remanufacturing industry. And Rio Tinto has established itself as the global leader in sourcing, grading, re-purposing and processing the world's used metals, plastics and minerals – largely through an established business in landfill mining.

 

With the family of the future we look at how circular business models can meet the needs of the future household unit. In 2030 Gillette are providing modular homes with personal care services and Marks and Spencer provide their local communities with a maker-space where locals can repair items or create new ones accessing various appliances from sewing machines to 3D printers.

 

Dagon Rouge, has recently confirmed its membership to the Ellen MacArthur Foundation’s Circular Economy 100 programme, a group of companies, regions and innovators working to enable the transition to a circular economy with M&S, Philips, Vodafone, Unilever and IKEA among its members.

 

We are starting to get a decent picture of the feasibility of circular business models, from a business, supply chain, policy and design perspective. But in order for these innovative models to take off, we must create accessible, desirable propositions that consumers will want to buy into. For this to happen, marketers must be part of the journey too.

 

Transforming consumption from a linear to circular economy cannot happen without an engaged, motivated and incentivised consumer. Should we fail to engage marketers and consumers, we risk looking back on the circular economy as an interesting tale in the story of sustainability. We’ll have got so near, yet very far. The front end of circular models such as take-back or performance-based propositions must provide clear, desirable benefits to consumers. Environmental benefits like resource efficiency or low-carbon will only capture a minority of people. We need to appeal to the mainstream with the promise of convenience, status, health and affordability.

 

We have begun to scrape the surface, in collaboration with the Foundation, by conducting a piece of UK-wide quantitative research to understand current consumer attitudes and behaviours towards circular propositions. We’ll be sharing this research over the summer but it’s clear that people at the heart of the circular economy need to be understood, listened to and excited by the outcomes as they start to come to market. Visualising these new business models is an important step in the journey. If we can’t help people to picture a circular economy and how it would work day-to-day, and how aspirational and appealing it would be, we will fail to create the momentum needed to make it a reality.

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