Companies Are Working with Consumers to Reduce Waste
【A】As consumers, we are very wasteful. Annually, the world generates 1.3 billion tons of solid waste. This is expected to go up to 2.2 billion by 2025. The developed countries are responsible for 44% of waste, and in the U.S. alone, the average person throws away their body weight in rubbish every month.
【B】Conventional wisdom would seem to suggest that companies have no incentive to lengthen the life cycle of their products and reduce the revenue they would get from selling new goods. Yet, more and more businesses are thinking about how to reduce consumer waste. This is partly driven by the rising price of raw materials and metals. It is also partly due to both consumers and companies becoming more aware of the need to protect our environment.
【C】When choosing what products to buy and which brands to buy from, more and more consumers are looking into sustainability. This is opposed to just price and performance they were concerned about in the past. In a survey of 54 of the world’s leading brands, almost all of them reported that consumers are showing increasing care about sustainable lifestyles. At the same time, surveys on consumers in the U.S. and the U.K. show that they also care about minimizing energy use and reducing waste.
【D】For the most part, consumers control what happens to a product. But some companies are realizing that placing the burden of recycling entirely on the consumer is not an effective strategy, especially when tossing something away seems like the easiest and most convenient option.
【E】Some retailers and manufacturers in the clothing, footwear, and electronics industries have launched environmental programs. They want to make their customers interested in preserving their products and preventing things that still have value from going to the garbage dump. By offering services to help expand the longevity of their products, they’re promising quality and durability to consumers, and receiving the reputational gains for being environmentally friendly.
【F】For example, the Swedish jeans company Nudie Jeans offers free repair at twenty of their shops. Instead of discarding their old worn-out jeans, customers bring them in to be renewed. The company even provides mail-order repair kits and online videos, so that customers can learn how to fix a pair of jeans at home. Their philosophy is that extending the life of a pair of jeans is not only great for the environment, but allows the consumer to get more value out of their product. When customers do want to toss their pair, they can give them back to the store, which will repurpose and resell them. Another clothing company, Patagonia, a high-end outdoor clothing store, follows the same principle. It has partnered with DIY website iFixit to teach consumers how to repair their clothing, such as waterproof outerwear, at home. The company also offers a repair program for their customers for a modest fee. Currently, Patagonia repairs about 40,000 garments a year in their Reno, Nevada, service center. According to the company’s CEO, Rose Marcario, this is about building a company that cares about the environment. At the same time, offering repair supports the perceived quality of its products.
【G】In Brazil, the multinational corporation Adidas has been running a shoe-recycling program called “Sustainable Footprint” since 2012. Customers can bring shoes of any brand into an Adidas store to be shredded and turned into alternative fuels for energy creation instead of being burned as trash. They are used to fuel cement ovens. To motivate visitors to bring in more old shoes, Adidas Brazil promotes the program in stores by showing videos to educate customers, and it even offers a discount each time a customer brings in an old pair of shoes. This boosts the reputation and image of Adidas by making people more aware of the company’s values.
【H】Enormous opportunities also lie with e-waste. It is estimated that in 2014 the world produced some 42 million metric tons of e-waste (discarded electrical and electronic equipment and its parts) with North America and Europe accounting for 8 and 12 million metric tons respectively. The materials from e-waste include iron, copper, gold, silver, and aluminum—materials that could be reused, resold, salvaged, or recycled. Together, the value of these metals is estimated to be about $52 billion. Electronics giants like Best Buy and Samsung have provided e-waste take-back programs over the past few years, which aim to refurbish (翻新) old electronic components and parts into new products.
【I】For other companies interested in reducing waste, helping the environment, and providing the sustainable lifestyles that consumers seek, here are some first steps for building a relationship with customers that focuses on recycling and restoring value to products:
【J】Find partners. If you are a manufacturer who relies on outside distributors, then retailers are the ideal partner for collecting old products. Power tool maker DeWalt partners with companies, such as Lowes and Napa Auto Parts, to collect old tools at their stores for recycling. The partnership benefits both sides by allowing unconventional partners (for example, two companies from two different industries) to work together on a specific aspect of the value chain, like, in this example, an engine firm with an accessory one.
【K】Create incentives. Environmental conscientiousness isn’t always enough to make customers recycle old goods. For instance, DeWalt discovered that many contractors were holding on to their old tools, even if they no longer worked, because they were expensive purchases and it was hard to justify bringing them in to recycle. By offering instant discounts worth as much as $100, DeWalt launched a trade-in program to encourage people to bring back tools. As a result, DeWalt now reuses those materials to create new products.
【L】Start with a trial program, and expect to change the details as you go. Any take-back program will likely change over time, depending on what works for your customers and company goals. Maybe you see low customer participation at first, or conversely, so much success that the cost of recycling becomes too high. Best Buy, for instance, has been bearing the lion’s share of e-waste volume since two of its largest competitors, Amazon and Wal-mart, do not have their own recycling programs. Since the launch of its program, Best Buy changed its policy to add a $25 fee for recycling old televisions in order to keep the program going.
【M】Build a culture of collective values with customers. A stronger relationship between the retailer/producer and the consumer isn’t just about financial incentives. By creating more awareness around your efforts to reduce waste, and by developing a culture of responsibility, repair, and reuse, you can build customer loyalty based on shared values and responsibilities.
【N】These examples are just the tip of the iceberg, but they demonstrate how helping customers get more use of their materials can transform value chains and operations. Reducing waste by incorporating used materials into production can cut costs and decrease the price of procurement (采购): less to be procured from the outside and more to be re-utilized from the inside.
【O】Companies play a big role in creating a circular economy, in which value is generating less from extracting new resources and more from getting better use out of the resources we already have—but they must also get customers engaged in the process.
