For the last ten years, we’ve successfully advised cutting-edge businesses on how to transform their models from linear to circular. Here we highlight the positive changes, acknowledge the challenges, and shed light on the ever-increasing urgent need for accelerated action.
Here comes the good, the bad and the ugly truth…
The Circular Good
Circular business models have come a long way.
Back in 2013, circular models were considered cutting-edge, embraced only by the most innovative players. But, skip forward a few years, and they’re going mainstream in many markets, with industries like tech and fashion leading the way. This growing interest positively reflects a changing mindset among consumers and businesses alike. Every well-run business is now exploring circular business model options.
Younger buyers, in particular, have embraced the concept of circularity.
New customer markets, especially younger customers, are embracing the idea of purchasing preloved products…and they’re transforming the market. Buying or wearing preloved items is no longer seen as ‘second-rate’ or ‘nauseating’. In fact, now more than ever, younger buyers are actively seeking out ethical and planet-friendly options. With less of an obsession for ‘owning forever’, options like renting or reselling play a large part in their lives as does being part of a community. Businesses have a huge opportunity here to strengthen brand loyalty through building robust emotional connections with these customers.
Circular competition is hotting up.
Nothing spurs businesses into action like a dose of healthy competition. With the rise in circular options this competitive landscape is expected to further propel the circular economy in the coming years. Get ready to wave goodbye to linear models of the past.
The question now is: Can existing businesses adapt quickly enough to survive?
The Circular Bad
Lack of focus on customers’ needs.
To unlock the full potential of circular business models, companies must focus on their customers’ changing needs in greater detail. Understanding and adapting to these needs is crucial for businesses to be able to identify additional value. This seemingly simple, sometimes overlooked factor, has the power to make or break the adoption of circular practices.
Missed commercial opportunities.
Despite the progress made, many companies still view circular business models as a responsibility of their sustainability teams, rather than recognizing the immense commercial potential they offer. A whole-business shift is necessary to fully embrace circularity.
Failing focus on the value of greater circularity.
While resale is an important aspect of circularity, there is an overemphasis on such simple, transactional relationships between brands and customers. In order to maximise the benefits of circular business models, businesses need to now explore more high-value additions like repair services.
And…the ugly truth!
The pace of change HAS to pick up.
The climate crisis demands radical action on consumption of new products. Unfortunately, the rate of change in adopting circular business models is not fast enough. Industries like fashion, for example, must halve their carbon impacts by 2030 to effectively combat environmental challenges. Impactful change must happen now.
Focusing on materials and design is not enough.
Many companies focus first and foremost on circular materials and design without fully considering the circular business case that justifies these changes. Circular practices now need to be seen not just as a materials sustainability issue, but also as a huge commercial advantage when implemented correctly.
Resale is just a beginning, not an end.
Establishing resale options for your brand is just the beginning. True circularity requires a comprehensive approach that considers factors like displacement and customer loyalty. It requires you to figure out if your business model is truly driving down new product consumption.
How are you shaping a more prosperous and sustainable future through circular business models?
So much has been achieved over the last decade and it’s always great to see how far businesses have come – especially our clients! Yet, there is still a long road ahead for many.
We’re committed to guiding your organisation through its circular transformation journey, unlocking the commercial advantages and environmental benefits that circularity offers.
We’re here to help you understand how you can implement the best circular business models effectively into your brand. Without compromise.
Contact us here to discover how our expertise and experience can help you future proof your business.