6 Reasons To Double Down On The Circular Economy For Your Innovation Right Now

But first, what really is the circular economy? Let’s start with our current economy, which is linear—a take, make, throw-away model. In contrast, the circular economy is a create-reuse model inspired by the cycle and regenerative power of nature (nature, btw, wastes nothing). Instead of endless consumption of dwindling resources and tremendous amounts of waste, the circular economy minimizes resource input, waste and pollution—and has the power to create an economy that is restorative (to people and the planet)

But, what’s in it for you?

Well, it also holds exciting innovation and brand opportunities that deliver on people’s genuine needs and wants (and that could restore the economy and build resilience into our local communities post-COVID-19, if you’re into that sort of thing).


Here’s why:

1. The Linear System is Broken, and People are Realizing it

7 million people motivated. Circular Economy

Before (and especially since) COVID-19, people have been waking up to the fact that global supply chains are failing us. Younger generations are looking for ways to live lighter on the earth, protesting all over the world to push governments and organizations into climate action. For older generations, while not everyone is motivated by sustainability or “green” values, more people are becoming sensitive to the downsides of “fast” consumption—the amount of stuff they own, the amount of waste they are generating, and the burden on their wallet and/or their mental health.

2. The Circular Economy is an Innovation Opportunity

The Circular Economy is an Innovation Opportunity

The Circular Economy can be explained via three simple principles: (1) Design out waste and pollution, (2) keep products in use at their highest value and (3) regenerate natural systems. But let’s forget about the earth and climate change (just) for a minute here. Seen from a brand lens, together, these principles actually illuminate a new innovation opportunity. A $4.5 trillion dollar one, in fact. (Don’t just take our word on this huge number: learn more via Accenture’s report ‘Waste to Wealth’ )

One global company realizing the circular opportunity is VF Corporation. This leading apparel company which makes Vans, Timberland, The North Face and many other brands, has established Circular Goals so they can become a  leader in large-scale commercialization of circular innovation by 2030. VF’s teams are focused in three key areas: circular business models, circular design and second life (more on this to come… read on!).


3. The Circular Economy is a Climate Solution

The Circular Economy is a Climate Solution

It’s not the only solution—but it’s definitely something you and your brand can do to take action on climate change. And it’s more impactful than you might think—a recent report by the Ellen MacArthur Foundation, Completing the Picture, says carbon emissions could drop 48% by 2030 if the Circular Economy framework was adopted globally by cement, plastics, steel, aluminium and food industries.


4. New Business Models for Long-term Customer Relationships

New Business Models for Long-term Customer Relationships

Business models based on a circular economy, like those that allow you to rent or subscribe rather than buy and throw out, do so much more than reduce waste. They’re also an opportunity to build better, longer relationships with your customers. According to Gustav Hedstrom, Business Developer at Houdini Sportswear, this can be thought of as moving from a “transaction economy” to a “relationship economy,” which as brand builders, we most definitely want!

Take Mud Jeans for example—a Dutch company that lets you lease your jeans. Wear the jeans as long as you like, swap them for the next year’s design or return them after a year. With this model, there are more opportunities and touchpoints to collect valuable customer data and obtain product feedback. Also, by offering free repairs, MUD learns early and often when their jeans have product quality issues. This is much more likely to foster a long relationship with a customer and signals the product has lasting value. Compare this to conventional models where brand reputations can be easily (and often unknowingly) tarnished by quality issues. We know that people are more likely to not buy a brand again if a product they own breaks (see point #1).


5. People Want Products that Have a Second Life

People Want Products that Have a Second Life

People love to have a great story to tell—not just through their life experiences, but also through the products they buy. Many are increasingly seeking products that have a second life, be it a bag made out of what used to be a dress in India, or furniture that used to be chopsticks. In fact, ChopValue brands its SMILE modular shelves as a conversation piece.

Companies like Nike, H&M and North Face have listened to their customers, seized the opportunity to take responsibility for their products after-life, and are investing in reverse logistics programs or collaborations to make it really easy for customers to return products to them for reuse. One partnership example is The Renewal Workshop, a company in Oregon dedicated to collecting, fixing, and reselling gear for outdoor brands that don’t have their own in-house program, including Icebreaker, Prana, Timbuk2, Pearl Izumi and Toad & Co.

“Research has shown that users are more interested in products having a second life than in receiving financial incentives to return them.”

– Noah Murphy-Reinhertz, Sustainable Design Lead at Nike 


6. Your Brand Can Get People To Regenerate Natural Systems

Your Brand Can Get People To Regenerate Natural Systems

Natural systems are big, unwieldy concepts, making it difficult for individuals to see where they can affect positive change over nature. Many people are waiting for country leaders and governments to take charge. But brands can be influencers to help people take climate action in their everyday lives (in exchange for brand benefits).

“You aren’t just eating breakfast, you are joining a movement.

– Nature’s Path Organic

We even see this innovation from smaller brands like Wise Apple, using “ugly” apples to make cider to reduce food waste, and Nature’s Path Organic, growing the world’s first Regenerative Organic Oatmeal in Saskatchewan, Canada. All these options allow people to buy into system-level regeneration of the air, soil and oceans. For a growing many, that’s a better alternative than waiting for politicians to act. And we see this in consumer behavior as well—it’s now the case for the majority of younger generations as (according to First Insight) 62% of Gen Z and Millennials prefer to shop from sustainable brands.

Circular innovation is an exciting future waiting to be redesigned!

2020 can feel like we are staring down a bleak road ahead.
But with our circular innovation glasses on, there are a multitude of possibilities and an exciting future waiting to be redesigned!

Get in touch if you want to bring these possibilities to your team or learn more about creating a circular innovation strategy for 2021! Our Circular Economy expert, Lindsey Boyle, created a consumer-centric session, bringing to life the Circular Economy via 3 simple principles + lots of brand & innovation examples. From Amazon Renewed to REI ‘good and used’ to Chop Value, we’re seeing new examples every day from around the world and can customize your presentation with examples you believe will most inspire your team.

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