Circular Business Model
The circular business model takes a different approach to the take-make-dispose consumption model, to which many have become accustomed. It calls for reusing and recycling as much as possible, plus repurposing and selling items that have outlived their initial use. Organizations around the world are creating new strategies to support circular innovation. However, one company, which has successfully provided a full-service circular model, stands out; it can be a role model for other businesses.
Selfridges, a chain of high-end department stores in the United Kingdom, launched the Resefridges platform as a part of its "Project Earth" initiative. The program encompasses resale, rental, refill, repair, and recycling; each enhances the active life of products, drives down waste, and promotes new shopping habits. The retailer offers a rental platform, making over 2,000 items rented in 2020, and will launch new initiatives, including kidswear accessories rental subscription service. There are 900 different refillable available from 48 brands, and over 13,000 products in Project Earth edit were verified to include at least 50% recycled materials. Moreover, customers can repair their purchased products from the retailer in-store and online channels.
KEYS SUCCESS FACTORS
At Selfridges, the implementation of a full-service circular economy attempt was created based on the goal of changing the way people shop and the way they do business which empowers people and businesses to shift in behavior to be more sustainable in the future. While most companies find it challenging to change to a circular economy due to the lack of proper waste infrastructure or technology to enhance the model, Selfridges decided to create partnerships to make projects viable. It collaborates with a peer-to-peer rental platform, “HURR,” a dry-cleaning partner, “Oxwash,” to provide rental service, and luxury after-case specialists, “The Restory,” to support repairing.
CIRCULAR BUSINESS MODEL APPLICATION
This circular business model shows that involving sustainability as a primary strategy in running a business is possible and that organizations can apply it to promote the behavior that enhances a circular economy. Firms should revise their business model by adding sustainability as a critical strategy and should collaborate with other companies to overcome obstacles in applying the circular business model. For example, Unilever, a consumer goods conglomerate, prioritizes circularity in rethinking and tackling the urgent issue of plastic packaging. The company partners with financial backers to pioneer new technology that converts PET waste into material for food packaging.
Promoting a circular economy requires revising fundamental business models. This must come together with creating partnerships to accelerate the actions to enhance every strategy to be viable and operative.
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