PEAK STUFF by pluralthinking
09.2017
Part 2: Rethinking Ownership A CULTURAL INTELLIGENCE THINKPIECE
A LETTER FROM
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THE EDITOR
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ith the proliferation of digital platforms, increased concern for the environment, and downsized living space, people are changing the way they consume. People want to know how things are made and what happens to them once they no longer want to own them. People are also questioning whether they need to own products at all if they can just access them instead. This has massive implications for diverse products and brands. Does your brand stand up to scrutiny from the environmentally-conscious consumer? Does your service or product risk becoming unnecessary because it is used infrequently or doesn’t meet consumer needs well enough? Our work at pluralthinking is frequently about understanding consumers in different parts of the world. Young people are often driving change, but they are bringing older generations with them. For brands to be successful they need to address people’s problems and match their concerns in ways that make their lives easier or more interesting. Brands need
to understand how they truly address consumer needs, and this might require a radical shift in understanding about what their product or service is really offering the consumer, and who their competitors are. This is part 2 of a three-part series Peak Stuff: Pragmatism or Puritanism? In Part 1: Getting rid, we discussed how people want to own less ‘stuff’. In this Part 2: Rethinking ownership, we look at how people are increasingly concerned about the product lifecycle and avoiding waste, which is driving the circular economy, and how the desire to own less is leading to new models of ownership in the sharing economy, which centres on access rather than ownership. Part 3: Life after stuff considers how consumers are seeking experiences and a life ‘on the cloud’ instead of physical ‘things’. We’d love to continue the debate with you! Say hello@pluralthinking.com or join us on twitter @pluralthinking
BRETT TEMPLETON brett.templeton @ pluralthinking.com
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CIRCULAR ECONOMY THE SHARING ECONOMY SO WHAT?
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CIRCULAR ECONOMY I want to repair and reuse my stuff
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e are living in a post-recession and post-materialist era. Consumer values, needs and lifestyles have changed and ecological awareness has increased. The circular economy provides the opportunity to counterbalance unneces-
sary waste and clutter. Today’s most forward-thinking companies are declaring an open war on waste, finding cunning, affordable, and profitable ways not just to recycle stuff, but to repurpose it - UPCYCLING is a thing now. is in. Many businesses are beginning to depart from the linear, ‘take, make, dispose’ economic model. They are starting the new, challenging task of creating a circular, closed-loop economy where less waste is needed. Everything can potentially be reused. This new economy will change the way companies select materials, work with their suppliers, make their products and interact with their customers. In other words, it has repercussions for the entire value chain and it has potential to completely transform the way businesses are run. Obviously
resource-intensive
industries, such as clothing, furniture and food will be the most affected by the circular economy, but the principles of the circular economy will continue to gain traction across all sectors. For example, France has passed a new law which comes into effect in 2020 to ensure all plastic cups, cutlery and plates can be composted and are made of biologically-sourced materials. Dutch brand Mud Jeans are leasing jeans to consumers, and then turning used denim into other products, for those who want guilt-free consumption and ‘seek a world without waste’.
CIRCU ECON I want to repair and reuse my stuff One sub-trend has caught special attention from consumers: (Re)valorising many fruit and vegetables.
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hriving Portuguese cooperative “Fruta Feia” (ugly fruit) sells imper-
Businesses also need to be aware that there is
fect-looking fruit; hard-pressed consumers still feeling the long arm
a new D.I.Y. sub-trend occurring where people
of recession and rigid EU rules that reject and waste “ugly fruit” that
want to have an active role in repairing, upcy-
doesn’t conform to over-zealous colour and shape criteria both created
cling and creating their own possessions and
a sizable market for this cooperative. The war against rejection of ‘ugly’
belongings. Unsurprisingly there are growing
staples is becoming more mainstream, moving beyond social enterpris-
number of websites and apps dedicated to this.
es; Intermarché, one of the biggest supermarkets in France, ran a highly
This sub-trend also embraces vintage and sec-
popular campaign about turning ‘ugly’ fruits that would have been thrown
ond-hand. For example, Ikea Norway created
away into healthy, affordable soups and smoothies. The success of these
platform for customers to sell their second-hand
and similar campaigns has coincided with several popular media stories
furniture. Although the campaign only lasted
on skilled chefs who are now creating nutritious, appetising dishes from
8 weeks, it resulted in the sale of every used
produce just past its sell-by date, while popular Austrian TV show ‘Waste
product.
Cooking’ centers around the idea of cooking food found in trash cans. But it’s not just about recycling and upcycling; it’s also about designing durable and easily maintained products. When people invest in more beautiful or expensive items, they want opportunities to repair and main-
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tain these things.
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ULAR NOMY The Government of Sweden announced income-tax rebates for mon-
status and popularity. There are significant
ey spent on repairing and slashed the rate of VAT for repair-shops and
numbers of consumers who participate in the
up-cycling studios. Vogue UK ran a piece on master cobblers. In times of
circular economy to be expressive or to be seen
recession the repair services see uplift. Although most generations are im-
as being political or popular.
pacted by circular economy, younger millennials and Gen Z are especially invested in this sub-trend, because it’s a great way to save money. The fi-
Whatever the reason, it has to be said that cir-
nancial scarcity and economic instability that they have grown up with has
cular economy has caught the attention of many
changed their purchasing habits. Indeed, younger millennials and Gen
major players. For example, in March 2016 soft
Z can be more resourceful, more creative and entrepreneurial than older
drinks giant Coca-Cola has called on global
generations in finding ways to save money and the circular economy is
governments and regulators to ignite a ‘cultur-
seen as a perfect match.
al shift’ towards closed-loop business models, calling them to take ‘leap of faith’ to back the
What does this mean for your brand? Providing ways of reducing waste
circular economy. The same can be asked of
during production might help you sell your product. Finding ways to help
marketers.
the consumer maintain their loved product through repair or repurposing can be a way of encouraging consumers to part with more money in the first place, or later in the life of the product. Taking products back off consumers when they are no longer wanted, or worn out, can encourage
All the things you threw out... are now in a hipster’s house
consumers to return to the store. It also provides resources, such as fabric or plastics, that can then be re-used by the company. H&M and M&S have been demonstrating this with their fabric waste for vouchers scheme. Knowing that broken or worn products won’t end up in landfill can make for guilt-free purchasing. Of course, marketers also need to be aware that a minor, yet still significant part of the circular economy does not stem from consumers’ scarcity but from consumers’ lifestyle choices, expressiveness and perceived Clem Bastow
IKEA: a circular store that now reincarnates “stuff”
In the UK, IKEA offers a ‘reverse vending machine’ for compact fluorescent light bulbs. Customers insert the bulb and receive a coffee voucher in return.
In France and Belgium IKEA provides customers with store vouchers in return for old items such as Lack tables or Billy bookcases. These items are recycled or resold ‘as seen’.
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Piloted recycling any plastic furniture (not just IKEA). This was very successful; people were holding onto broken furniture because they didn’t know where to throw it away.
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In the Netherlands and Norway, IKEA is in the early stages of allowing customers to bring in old textiles - rugs, linens, cushions, pillowcases – and turn them into something else, such as interesting flooring.
IKEA now collects old mattresses for recycling in 20 markets. IKEA is rolling out materials in all markets to help customers repair their products. Ikea plans to launch initiatives for broken or lost parts. The company is considering releasing blueprints for hinges and screws and even entire products. IKEA may be able to print and dispatch small spare parts in the future.
Examples Edible Cupcake Packaging Dr. Oetker, the German baking company, has released a line of edible wafer cupcake cases, designed to replace paper alternatives. The initiative follows a host of other edible Dr. Oetker products, such as digestible cake decorations. Edible packaging doesn’t just help to reduce waste, but also reignites excitement and novelty into the cooking category.
App sells unsold restaurant meals The app Too Good To Go allows consumers to purchase unsold meals from nearby restaurants, cafes and bakeries for a discounted rate, providing affordable meals and reducing food waste.
Z E R O W A S T E S U P E R M A R K E T T H AT F O R C E S C USTO M E R S TO P R E - C YC L E Consumers are expected to bring their own containers for almost everything at Montreal-based Méga Vrac Supermarket. Additionally, the store has partnered with local providers and manufacturers in order to minimize the amount of packaging needed for transportation, thus further deepening the stores ecological commitments.
W A S T E W AT E R U S E D F O R B R E W I N G Inspired by California’s devastating droughts, San Francisco based Half Moon Bay Brewing Company is using NASA technology to brew beer from recycled greywater. This is water that’s been treated after use in
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sinks, showers and washing clothes.
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THE SHARING ECONOMY W h y ow n s o m et h i n g t h a t I o n ly u s e s p o ra d i c a l ly ?
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he sharing economy prioritises access over ownership. More people are recognising that owning can be inconvenient, uses too much natural resources and takes up too much space. That’s why some folks simply pre-
fer having access instead of purchasing and owning products. If consumers have an excess of any resource, they can share it with strangers, who are likely to pay them (and the facilitating website) for access. For example, people are moving towards borrowing tools that might only be used occasionally, rather than purchasing and storing them. Although sharing has always been a component of the human history, recently it has received increased attention. This is partly due to the economic crisis, and partly due to new digital platforms that allow sharing to take place quickly across geographic spaces with people you didn’t previously know. The sharing economy is popular because it delivers inexpensive, efficient and often highly innovative solutions to various aspects of daily life. This can be borrowing or exchanging clothes, sharing cars, dog walking or renting holiday homes. Sometimes these are necessities, and sometimes these are recreational pursuits. This is especially visible in the travel industry with millennials aiming for the personalized services of AirBnb than traditional hotels. But the sharing economy is not exclusively a millennial domain. In fact, a growing group of seniors are participating in the sharing economy by using their time, talent and assets to increase their income and social lives. The sharing economy is in many ways a perfect fit for retired people, because it allows seniors citizens to rent out their spare rooms, offer up the use of their idle cars and put to use skills they accumulated over their lives. Seniors are likely to have all these assets and now they can offer them at their convenience, working is much or as little as they want.
If you want to share you must have trust first Convenience and flexibility are the key features of the sharing economy, but trust is the sharing economy’s biggest issue and challenge. For starters, how can consumers trust their money and their card details to a complete stranger? As with other things, technology platforms and big data provide a huge help. For better or worse, the internet stores massive amounts of information about us. And analysis of all of that data can be an immensely accurate way to verify identity of the participant in the sharing economy, even without traditional verification methods such as a driving license (which is often in another language) or LinkedIn account (which many people don’t have). Companies interested in the sharing economy would be wise to invest in in algorithms and platforms that provide such swift and extensive verification. And after this initial trust hurdle is solved, it becomes easier for consumer to choose the specific ‘peer’; consumers can rely on ratings, comments or direct contact with their chosen sharing economy peer. Brands also need to be aware of increasing number of free or low-cost services like The Library of Things which stock everything from DIY equipment and camping gear to kitchenware and wetsuits. Similarly, the Italy-based campaign Barter Week inspires tourists to exchange goods and services for a free stay in thousands of Italian B&Bs. Social enterprises and campaigns like these are often seen as democratic alternatives to more mainstream and bigger sharing economy enterprises. Sharing economy brands that support community development, neighborhood ties and genuine and altruistic social relations can build a comparative advantage over its more famous competitors, while bigger companies can
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take cue and learn from them.
Why buy when you can borrow? The Library of Things stocks everything from DIY equipment and camping gear to kitchenware and wetsuits.
There are many opportunities for brands to collaborate and indirectly participate in the sharing economy. For example, John Lewis started a new partnership with Airbnb, which offers their customers the chance to attend masterclasses in the art of hosting. The sessions are held in John Lewis department stores and serve as an open forum for discussion between hosting veterans, John Lewis’ own Home Design team, and potential customers of Airbnb interested in listing their homes on the platform. Naturally John Lews hopes you’ll pick up new bedding and towels on the way on... And in November 2016 Airbnb launched new “Trips” product where travelers can book tours and activities led by local experts. This feature allows Airbnb users to browse and book a range of tours and group activities, such as “truffle hunting,” Korean embroidery lessons, food-market tours, reality-TV
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casting and multi-day “immersion” experiences in a dozen cities around the world.
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This Airbnb product is opening up diverse collaboration possibilities for an enormous number of brands, while simultaneously making Airbnb both a starting point for vacation planning and a close companion while travelling.
More and more diverse brands and industries see the commercial opportunity of linking up with the sharing economy. For example, MasterCard partnered with Lyft during the Christmas holiday. It decked out the interior of Lyft vehicles in Christmas decorations and handed out gifts such as cookies and concert tickets.
So, despite some issues and controversies, the sharing economy is here to stay. In fact, it’s proving to be extremely popular among consumers while more and more businesses are considering how they can join in on the “sharing” — either through individual projects or by partnering with other brands. In fact, more and more different industries, categories and brands are joining the sharing economy and competing with traditional commerce models. If they want to keep up, more traditional enterprises need to think about how their brands can do more “sharing” and how they can facilitate sharing within their consumers.
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Sharing is caring
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App that lets travellers trade rooms in their homes for free The Nightswapping app allows users to trade their own rooms for accommodation at someone else’s place for a home-from-home travel experience. No money is exchanged. Users must first become members of the Nightswapping site before they can host guests in order to earn ‘nights’. Individuals who are wary of hosting strangers but still wish to try the concept can buy nights at other members’ homes before committing to the full service.
Rent toys for your kids Pley.com knows that children tend to tire of toys and eventually outgrow them. The company stocks toys suitable for 0-6 year olds and allows users to create a wish list of toys and rent them.
The motorcycle ride-hailing app that helps fight traffic In Indonesia, a number of new startups tailored to the local market have sprung up, such as Go-Jek, which facilitates the sharing of motorcycle rides and fights traffic. Research has showed that people in the Asia Pacific are the most willing in the world to share and rent resources.
Service that you borrow or lend a canine for the day BorrowMyDoggy a website where dog owners can have their dogs taken care of by people who love dogs. Imagine it’s like online dating but for dogs. It offers dog-walking, dog-sitting and daycare for dogs through a network of dog lovers. Nearly 500,000 Brits have signed up to the service.
This is part 2 of a three-part series Peak Stuff: Pragmatism or Puritanism? Part 1: Getting rid is about how people are declutteri ather than material possessions.
So what? A
s we have shown, there are major cul-
finding alternatives to buying new products.
tural changes taking place. These are
Brands must find ways to connect deeply with
influencing the ways that people are
consumers, and one essential way is to recog-
behaving as consumers, and also how they are
nise consumers increased concern for waste.
interacting with brands. New products and cat-
Cultural trends can go so far as to remove
egory innovations are emerging. This has huge
brand categories. If people become worried
implications for a range of industries such as
about increased landfill, will they avoid buying
FMCG, drinks, hotels and clothing. Brands must
kitchen paper towel? If people begin to realise
consider not only what they are producing, but
how many paper coffee cups they buy during a
the life cycle of their products. Considering the
year, will they bring their own mug, or will they
after-life or second life of a product has great
decide they can make coffee in the office for
opportunities for brands to create new touch-
their coworkers instead?
points, as consumers reengage with the brand and new opportunities emerge for the consumer to return to the store. The circular economy creates online and offline opportunities for connection, as consumers seek replacements, enquire about maintenance or have less post-purchase guilt. But be warned; brands that are not concerned about their products sustainability life cycle are at risk of decline. The sharing economy creates new avenues for consump-
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tion such as renting, but also risks consumers
As well as being concerned with repair, reusing and recycling, there is a growing interest in ‘reincarnating’ products. As well as reflecting growing consumer interest, there is often money to be made when consumers return their used products, either through re-selling, upselling or selling materials on. Could your brand do more to close the loop, or tell consumers about your sustainable credentials? Could you develop a product that uses the ‘waste’ of another brand?
ing their homes and mind. Part 3: Life after stuff is about how consumers are seeking experiences and life stored ‘on the cloud’
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If you are a generic brand or service, you’re in trouble!
The sharing economy risks killing off loads of
Older generations are engaging with the
generic brands. Who would have guessed a
sharing economy too. Many are well aware
few years ago that established hotel brands
that they have more wealth and consumer
would compete with local people’s spare
goods than younger generations – seniors
rooms? But if the spare room better matches
want to share, and to supplement their sal-
consumer desire for a particular, if localized,
aries or pensions. They seek rich life expe-
aesthetic and a cheaper stay, then the ho-
riences to tick off their bucket lists and have
tel is in trouble. Consumers want something
more time and money to engage in travel
tailored to them, something specific to their
and novel experiences than the young.
location, or something a little bit different. Brands must offer a more unique product or exemplary customer service to keep up. They must really understand what is driving people and their interest, or dissatisfaction, as the case may be, with categories and brands.
To be insulated from these cultural shifts, brands must understand the underlying concerns and values that drive engagement with their products or services. Of course, this is where pluralthinking can help. This is part 2 of a three-part series Peak
In a nutshell, people are increasingly con-
Stuff: Pragmatism or Puritanism? Part
cerned about what happens to their products
1: Getting rid is about how people are
when they are done with them, and favouring
decluttering their homes and mind. Part 3:
alternative ways of consuming, such as shar-
Life after stuff is about how consumers are
ing or renting. The circular economy is not
seeking experiences and life stored ‘on the
just a hipster concern, or driven by poverty.
cloud’ rather than material possessions.
Affluent millennials are increasingly worried about the environment, waste and the cli-
Continue the debate!
mate, and they’ll engage older generations
Say hello@pluralthinking.com or join us on
with their make do and mend 2.0 mentality.
twitter @pluralthinking
What do you think?
pluralthinking
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