Customers must be at heart of circular economy, retailers agree
Retailers must be prepared to collaborate to create a 'behavioral catalyst' that will transform the circular economy concept into a viable, mainstream business model, a panel of sustainability experts has concluded.
Sustainability gurus from Samsung, Sainsbury’s, John Lewis met in London yesterday (05 November) at the annual WRAP conference, advising companies to create an ‘enabling environment’ for the circular economy.
The transition to a circular economy will be centred on the behavioural changes of both producers and consumers, the panel said.
WRAP’s chief executive Liz Goodwin opened the conference with a passionate speech calling on companies to act on the mounting resource challenge. Goodwin said: “We need to stimulate innovative business models, and we’ve got to make these innovations happen as well as changing consumer behaviour.
“We know more about food waste than the rest of Europe, but the important thing is starting to measure what we know and setting the right targets will help. Targets are needed because they focus the market but it’s difficult to set them across the whole of the EU.”
— WRAP (@WRAP_UK) November 5, 2015
The role of the consumer was considered to be the main barrier to overcome in order to truly establish a succinct, global circular economy. John Lewis is one of many in the fashion sector moving to sustainable sources of cotton in order to hit sustainability goals, but as the group’s sustainability sourcing manager Eoghan Griffin pointed out, the decision wasn’t driven by consumer demand.
Griffin said: “The main issue is balancing the circular economy with the customer’s constant need for new. We’re not getting a massive demand from consumers to have sustainable products. For us, our responsibility is to meet the more general demands.”
These sentiments were echoed by Goodwin who added: “The consumer has a huge role to play but at the moment they don’t understand and are unaware. There’s a role for the retailers to be enablers and give more information.”
Providing a perspective from the electronics industry, Samsung’s sustainability affairs manager Kevin Considine agreed there are still some key challenges surrounding the transition to a circular economy, but he believes servitisation could provide the answer.
Samsung recently announced the launch of a new refurbishment business model, which encourages consumers to return unwanted or damaged goods back to the manufacturer so that they can reuse the goods to create new products.
Considine explained: “Refurbishment is an increasingly important and growing sector which would allow us to get closer to our customers. There’s always a demand for a primary product but increasingly there will be demand for refurbished products.
Considine also called for a reform of regulatory systems to allow for more efficient business models compared to the “fragmented” regulations that big businesses currently operate within. “Businesses need time to develop their own approach, rather than a rush to introduce regulation,” he said, claiming he is an advocate of “more carrot, less stick” to incentivise positive change.
Food for thought
While the technology sector has this refurbishment option availble to discourage end-of-life, the circular economy becomes a whole different beast for the food sector.
This week, chef Hugh Fearnley-Whittingstall went to ‘war on waste’, with a new TV show highlighting the food waste caused by exacting supermarket standards. The show revealed that as much as 40% of farmers’ crops are being rejected due to aesthetics.
Judith Batchelar, director of Sainsbury’s Brand, spoke of the retailer’s desire to source food from more sustainable sources, while Sainsbury’s is also working on incorporating new initiatives to promote sustainability and reduce supermarket food waste.
“We want to make sure that the raw materials we are using – from the soil all the way through to the consumer – are sourced in the most sustainable way posible,” said Batchelar.
Batchelar pointed to an AD plant that recently opened at Sainsbury’s Cannock store – which turns food waste from the store into energy that is used to power in-store operations – as one example of how technological advancements are helping the company move towards circular business processes.
Despite technological advancements creating a bright new future for the food sector, Batchelar noted that by 2022 only 58% of people would be shopping instore – down from 78% in 2013. This is inadvertantly creating a ‘digital barrier’ between producer and consumer, so retailers could have to reach out digitally to connect and educate consumers.
Last year, Sainsbury’s did just that, launching a new online tool with Google that offers people practical help and inspiration on using up ingredients that would otherwise end up going to landfill.
But in order to truly advance digitally and reach out to the growing proportion of online customers, Batchelar admits that collaboration will hold the key. “It’s difficult for businesses that operate in a competitive space to galvanise and collaborate in a way that truly drives a step change,” she said.
“We need to create a pre-competitive environment to share ideas without it being construed as anti-competitive.”