WRAP: Consumer demand creating economic opportunities for resource management
The private sector can progress waste reduction methods and promote recycling and reuse by building new business models around the consumer, WRAP's technical specialist Greg Lucas has claimed.
Speaking exclusively to edie, Lucas claimed that any business models built around minimising waste would first need to develop an understanding of consumer attitudes towards recyclability and second-hand reusability. Once this understanding has been established, Lucas suggested, businesses can begin to accelerate product deployment tailored to consumer preference.
“The business model now has to be built around the consumer,” Lucas said. “Understanding the consumer demand for second hand or refurbished products across each sector, and being able to make that information available across the supply chain, will drive demand.
“It will highlight the type of activities and models that businesses should be working on. It will involve some research about what the customers demand, such as what issues can be solved, and will result in companies providing a new service to the customer.”
Lucas claimed that circular economy was a relatively new concept for most consumers, and that businesses would have to develop the right language when attempting to sell products under a closed-loop mantra.
There are a variety of levers, Lucas noted, that can all be used to improve waste management. Repair and reuse, recyclability and durability and longevity can make it easier for consumers to dispose of products without it being sent to landfill. Lucas predicted that some sectors would have to focus on certain waste reduction methods in order to get the public on-board with the agenda.
Using guidance provided by WRAP, companies across a plethora of sectors have started to involve consumers more by offering products and services that shift consumers from the end of the product line into an integral cog of the circular economy.
WRAP launched its REBus Life Plus programme in December. The project, supported by the EU Life+ fund, aims at providing businesses with new operating models that improve resource efficiency in a profit-generating manner.
European manufacturing firms spend around 40% of their total costs on raw materials, and REBus Life Plus looks to reduce the reliance on raw materials in order to boost revenues. Argos has already found success using the programme, launching a gadget trade-in service across 788 UK stores.
In exchange for trading in mobile phones and tablets, customers will receive an Argos gift card to spend on anything in the Argos range. The items are then refurbished in the UK and re-sold.
Pick and mix
As Lucas mentioned, different resource models will appeal to different sectors and for electronics, trade-ins and reuse are growing in popularity. O2 has been joined by the likes of Apple and Three UK in promoting reuse and trade-ins to slash at e-waste levels.
Another scheme growing in prominence under resource management is the sharing economy. Companies can cut down on the amount of raw materials being used by offering products and services that cater for numerous people rather than individuals purchases.
The concept is gaining traction in the automotive sector and in a world of fast fashion, which sees £350,000 tonnes of clothing sent to UK landfills annually, sharing economy and servitisation are seen as viable business options.
In the UK, garments have an estimated life span of just two years and three months. Data from Zero Waste Scotland reveals that the average Scottish household owns around £4,000 worth of clothes, but wears only 70% of that each year – most commonly because it no longer fits.
H&M has become one of the fashion industry’s leading lights on resource management. In the past year alone, the Swedish retailer collected 7,684 tonnes of used materials through an in-store recycling scheme; developed a new recycled denim range; achieved a 29% increase in its use of organic cotton; and launched a €1m funding scheme for clothes-recycling innovations.
Through WRAP’s REBus initiative, other resource options are appearing in the industry which engage with consumers and cut back at the amount of products wasting away in wardrobes.
Alexandra Wood Bespoke Tailoring is a company supported by REBus Life Plus. The company uses a hiring system for luxury menswear for special events and business functions and has since opened an online store and sells through other British suppliers. A similar scheme is also available for women through the REBus-supported Rentez-Vous company.
Both business models help to alleviate the growing volume on unused clothes, by offering products through a renting agreement. Customers are actively involved in the value chain of the products, which are designed to serve numerous temporary owners.
Introducing the right business model will come down to whether consumers will want repaired or rented items, less likely amongst electronics, or placed into contracts over products, less likely in textiles, Lucas claimed.
Lucas stressed that this demand, and the subsequent operating shift that will follow, is an economic opportunity for businesses that now have the chance to strengthen relationships and build trust with their consumers, while opening economic revenues through new services.
“Business cases are very rarely just financial, and there are some good social and resource implications in these models as well,” Lucas added. “But, I can’t stress how important it is that even for charities, these types of business models bring in a sustainable revenue. It’s not just a cost to the organisation, it’s a much more balanced business case.”
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