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Thriving Brands Think Circular

07/15/2014

 

Great_Recovery_systems2The traditional relationship between brands and consumers is being tested on multiple fronts.

Built on the assumption of unlimited and cheap natural resources, the ‘take, make and dump’ mindset predominant today  has begun to change. The circular economy is the most innovative approach to business consumer relationships seen in decades. While more established in Europe it is gaining traction in the US as well.

JWT’s recent trend report on the circular economy highlights five ways that some businesses are reshaping their operations and relationships with customers.

Selling Temporary Ownership

Dutch denim brand, Mud Jeans, began a scheme last year in which customers pay a monthly fee for jeans, returning them at the end of the lease period (a year is the minimum). Mud then cleans the jeans and makes any necessary repairs before re-leasing them or, if the jeans are beyond repair, recycling them through its denim manufacturer. This way, Mud retains ownership of the raw material, helping to protect the company from volatile cotton prices, while customers can update their wardrobe annually without the sizeable upfront cost.

Second Hand Sales

One of the easiest ways for brands to eliminate waste and participate in the circular economy is to give goods new life in the second-hand market. Patagonia, the outdoor-gear brand, set up the first multi-seller branded store on eBay, enabling customers to list their used Patagonia items. In four US Patagonia stores (Seattle, Palo Alto, Portland and Chicago) customers can trade in old Patagonia goods for store credit. These items are then sold in a Worn Wear section of the shop.

Collecting and Recycling Goods

In the apparel category, European retailers including Puma, H&M and American Eagle Outfitters are partnering with I:CO, a Swiss reuse and recycling firm that sets up collection points in stores for worn textiles and shoes. Customers who contribute get discounts on future purchases.

Product Repair

In a circular economy, broken goods are upgraded or repaired and used for as long as possible rather than tossed out. Handles on Patagonia’s Freewheeler luggage, for instance, have four red screws holding them in place, making it simple for customers trying to repair jammed or broken handles to see which parts to unscrew. Dell and Lenovo design certain computer components for easy removal and replacement, shipping them to customers along with instructions. While these brands lose out in the short-term on a potential new sale, by making repair easier they foster longer-lasting relationships with consumers.

Designing For Endurance

While seemingly a logical concept, it’s likely we’ve all experienced the demise of product endurance replaced by planned obsolescence. Levi Strauss men’s brand Dockers is selling Wellthread, a small capsule collection that’s built to last and to be recycled. Trousers, for example, feature reinforced buttonholes and pockets.

All of this should be good news to consumers who are weary of product that just doesn’t hold up. For retailers and brands the circular economy represents a new path to customer connection and profit.

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