I can explain the circular economy in three, well-known terms – reduce, reuse, recycle.
The concept of the circular economy is about disrupting the current, linear business model: manufacture – ship – sell – landfill. What if for example, we designed products to go BACK to their manufacturers where their parts can be reused and then transported using renewable energy?
The circular economy is about all this idea – taking advantage of the interconnected components of our economy and creating long term economic and environmental prosperity. Many businesses are starting to adopt this model, but a lot of them are asking the question “What will my customers think?”
Global bank ING explored this in their 2019 global survey titled, “Learning from consumers: How shifting demands are shaping companies’ circular economy transition,” which published this year.
The takeaway? The majority of consumers believe their actions can positively impact the environment, but education, cost, and convenience are still standing in the way.
First, the good news – consumers care.
48 percent of younger consumers (aged 23-34) have gone as far to boycott a brand that they believed had bad environmental practices! Also, over 80 percent of the consumers surveyed believe they can individually make positive change on the environment. Almost 50 percent would pay MORE for eco-friendly items…but not too much.
While environmental impact is obviously important to consumers, as a whole, price and the quality of the item can still override this factor. 54 percent of consumers will choose low cost fast fashion over more expensive, durable and sustainable items.
So what does this mean for sustainable businesses? Calling yourself “eco” and having transparent sustainable business practices may not be enough.
Market the durability and quality of your product/service AS WELL as try to stay competitive on price. This can help appeal to those consumers on the fence.
In terms of circular product models in general, consumers need more education about how to participate in circular behaviors, like repairing broken items instead of throwing them away. The study outlines an example in the electronics industry where only 21 percent think companies provide detailed information on the overall environmental impact of products and 39 percent can’t distinguish between recyclable and non-recyclable plastics.
An old journalist trick is to treat your audience like your grandmother. Explain your business practices and benefits like you’re explaining it to your grandmother who may like you, but knows nothing about business or sustainability and needs simple and clear education.
Another important takeaway is that after you educate consumers you should empower them.
For example, 48 percent of consumers think they simply don’t have the skills to repair their own clothes, which means they are more likely to throw away those torn jeans than to fix them.
Fashion businesses for example can post how-to videos on EASY sewing techniques and feature stories about consumers like them participating in the circular economy so that they feel like they can do it too. Making it look as CONVENIENT as possible is also important, according to the study.
The last key takeaway I’m going to talk about is that the majority of the people in the report are either “Circular Champions,” who already prioritize sustainability above all else or “Circular Sympathizers.” These are people who are concerned about the circular economy, but convenience will override their concern.
Circular Sympathizers made up 30 percent of the group and were 52 percent male, slightly wealthier, urban, and under 44 years old.
Surprisingly, Circular Champions who made up only 28 percent of the sample are quite different from the sympathizers – they were 56 percent female, above 44 years old, and perhaps most importantly – ALL believe their individual actions can make a difference.
The remaining 42 percent were deemed “non engagers” and were NOT EMPOWERED to make change.
Overall, sustainable businesses must not rely on only their greenness. We must put in the work to educate, inspire, and empower our consumers who care.