Hi everyone and welcome to the fourth blog post of a Circular Victory! Last week we looked at the five Circular business models that will help to drive the transition into a Circular Economy. The five business models are Circular Inputs, Resource Recovery, Sharing Platforms, Product as a Service and Product Use Extension. Combined with the blog of the week before on Circular Strategies, we have built a strong basis to start analysing Circular companies. And that is exactly what we are going to do this week!
We are going to take a look at an interesting business case in the Circular Economy, Circos.
If you haven’t read the previous blog post yet, you can find them on my website or Medium.
Feedback from our audience
Before we dive into the business case for this week, I am going to have a look at the feedback I have received from some of my readers and listeners this week! I always love hearing from people and starting a conversation with them. This week, I was contacted by Luke, who is based in London and Katrien, who is based in Bruges.
Luke showed me an interesting example of a Circular business! Recently, a Reuse & Recycling Centre opened in Greenwich. You can bring used goods to their store and they will ensure they get reused or recycled. They also offer “Upcycling” workshops on site and refurbish and repair goods that have been brought in. In doing so, they extend the lifetime of the products. This store is therefore an example of a business active in the Product Use Extension model, as well as some Resource Recovery. But that is not everything! The profit that this store makes, is largely donated to Greenwich & Bexley Community Hospice charity. It is a great sustainable and charitable initiative, and I would encourage anyone living around that area to go check it out!
Katrien is based in Bruges and works in the recruitment business. Recently, she received an internal newsletter about the importance of training and retraining for the development of the Circular Economy. This is a really interesting perspective, that we have not analysed yet in this blog. Evolving to a Circular Economy is certainly not an easy transformation and it will require a lot of new skills and capabilities. In order to develop these skills and capabilities, education is and will continue to be crucial. This also brings us to an interesting realisation about the Circular Economy. The transformation to the Circular Economy is a radical change. It will impact every single area of our life. It is not just a concept within retail or manufacturing, it is a mindset that will have to be present everywhere. And as with so many things in life, education will be crucial in helping us to achieve the ambitious goals that the Circular Economy and climate change has set for us.
Now, let’s have a look at the business case for this week!
Business case: Rental of Maternity and Child’s Clothing
This is a business case that I find super interesting. When we think about clothing during a pregnancy or clothing for a young child, we know that sizes change rapidly and often. Especially babies seem to need new clothes all the time. Because they grow out of the clothes so quickly, the wear and tear on them is minimal. In a linear system, this can lead to excessive amounts of waste, as new clothes are purchased and disposed of all the time.
In this category, we have seen some Circular strategies arise naturally. Many new parents and pregnant moms will rely on secondhand clothing from family members who have gone through pregnancy before. Alternatively, parents will buy used clothing for their new-borns and then sell them back to the secondhand shop once the babies stop fitting in a certain size. Here we see people naturally evolving to some reuse strategies, to keep costs lower and to waste less. If you are a parent and you have done this before, congratulations! You have experience with Circularity!
But while many parents have found their way to reusability and sharing, I also know that a lot of parents have drawers full of old baby clothes that they do not know what to do with. This is where the business model of Circos, or many others like them, comes in. Circos offers baby and maternity clothing on a subscription basis. Every month you get to select the clothes and sizes you will need for the upcoming month. The clothing arrives in a box and you can use that box to send the clothing of the previous month back! This means less clutter in your house, a constantly updated and fitting wardrobe and a smaller footprint.
Circular Strategies
Now let’s analyse this model a little bit. Which Circular strategies do they employ? If you do not remember the strategies that well or if you want a refresher, you can have a look at the second blog post. Circos helps to reduce overall consumption by optimising the usage of each piece of clothing. They do this by facilitating the reuse of clothing between several different families. This is another Circular strategy. Circos also promises to carry the responsibility of refurbishment and repair. With the monthly subscription, you do not have to worry about stains or holes, Circos will take care of them for you!
Circular Business Models
We will also have a look at which business model Circos operates in. For a refresher on the five different Circular business models, have a look at blog post three.
Circos is mainly a Product as a Service system. By paying for the monthly subscription, Circos is offering you the service of being clothed. You do not have to worry about stains, holes, sizes etc. Circos takes care of these worries for you.
On a smaller scale, Circos could also be seen as a Sharing Platform. We might initially think of apps such as Uber under this category, but the essential factor of Sharing Platforms is the optimalisation of asset utilisation through collaborative use. In a clothing rental system, usage is optimised because several babies in a row can use a piece of clothing once the previous baby has grown out of it. We could see the babies or families as collaborators, with Circos being the platform in between them.
I think baby and maternity clothing in general, whether it be through rental or secondhand, is a great example of how the Circular Economy can both reduce waste and save cost!
Weekly challenge
Like any other week, there is a challenge for the listener again this week! Often people think about sustainable living as inherently more expensive than linear consumption. This week’s business case is just one of the examples that challenges that notion. In order to improve the sustainable mindset of my audience, I would love for you to think about other examples where doing something sustainably also reduces your cost!
I would love to hear your thoughts on this week’s post and challenge. You can send me your thoughts to acircularvictory@gmail.com or to my LinkedIn, Victor Lanckriet.
Thank you for reading and I’ll be back next week!