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SELLING CIRCULAR VALUEModerator: Pieter van Os | Reversed Concepts –CIRCOSpeaker: Wouter Buijze | Bundles
Wemakethebest
qualityaccessibleto
everyone
Learningsfromthelaunchofacircularbusinessmodel
DDW2016workshop
How?“Makequalityaccessibletoeveryone”
o Removemostimportantbarrierofhigh
qualityproducts- initialcosts
o Studyreusability- design,logistics,reuse-
togetherwithchainpartners
o Extentlifetimethrougheffectiveand‘smart’maintenanceandrepairs
o Reduceconsumptionthrough‘smart’usage
Why?
“Stopthethrow-awaysociety”
o Increasedmarketshareoflow-quality
‘disposable’products
o Wasteduetolowreusabilityofproducts
o Waste duetoshortlifetimeoflow-
qualityproducts
o Wasteduetohighconsumptionof
consumablesofinefficientappliances
What?
“Full-servicepay-for-usesubscriptionon‘smart’durableappliances”
o Fullservice:100%performanceguarantee
o Payforuse:perwashingcycle
o Subscriptions:paypermonth
o Smart:connectedtotheinternet
o Durable:longlifetime,efficientinconsumption→Miele
o Thetool:asmartplugwhich
monitorsenergyuseofa
specificappliance
o Theidea:notonlysaveenergy,
butcapturevalueofmaterials
throughextensionoflifetime
andreuse
Howwestarted
o Findpartners:manufacturer,software
developers,marketing,etc.
o Startsimple,offtheshelveappliance
o Chooserevenuemodel,pay-per-use
o Test:seehowpeoplelikedtheidea
o Try,fail,learn,repeat…
How we try to help..Connectingcustomerswiththe
bestqualitymanufacturersand
consumablesuppliers
Appliance Manufacturer
Consumable
Suppliers Customers
- Bestappliances
- Noinitialcosts/
lowconsumable
consumptioncosts
- Noperformance
risks/bestservice
- Remainflexible
- Sustainable
contribution
- Reachnew
marketsegments-
budget
- Reducematerial
costs
- Datadriven
learnings- product
development
- Reduceservice,
maintenanceand
warrantycosts
- Retained
customers
- Datadrivensales
- Reducedretail
marges
Whereweare
o Almost600customers
o Threeappliancecategories:washing
machines,tumbledryers,dishwashers
o Growthincreases12%permonthà 50
permonth
Wherewewanttogo
o 2500installedappliancesendof2017
o Newservicedesignsthroughcollaborationswith
high-qualitymanufacturersandsuppliersof
consumables
o Measureourimpact:savingsofmaterials&
consumables
o Buildtrustworthyandlong-termcustomer
relationships
o Createanoutstandingcustomerexperiencewith
highservice,funcontentandthebestquality
o Learnabouttheappliancesinordertoimprove
ourservice- addautomaticdetergent
replacement,fixbrokenpartsbeforetheyare
broken,providepersonaladvice
BHAGBigHairyAudaciousGoal
o Maketheuseofhighqualitycheaperthantheownershipof
throw-awayproducts
o Makequalitytheonlylogicalchoiceindesignandproduction
Ourchallenges
1Sales
� Educateconsumers
- Accessvs.
ownership
- Benefitsofsystem
change
� Lowemotional
purchases
� Shortdecisiontime
frame
3
Impact
� Circulardesignvs
offtheshelve
products
� Performance
guarantees
manufacturer
� Economic
feasibilityof
materialreuse
2Asset-financing
� Newasset
categories-
opposedtocars,
realestate,etc.
� Hightransaction
costs- smallassets
� Shorttrackrecord
ofcompany
Howtoscaleandrealizeimpact
Circulardesignconsideration
Product
Business
Model
Service
proposition
• Bundlesbusinessasstartingpoint
• Currentsituationkeybutkeep
‘why’andBHAGinmind
• Servicemodelstrategy
• Coherencyrequired
1.Whatelementsarekeyinthecircularserviceproposition/design?
o Howtodealwiththefactthatnotallbenefitscometogetheryet
andthefinancialbenefitsarenotdirectlyvisibleduetohigh
financingcosts,softwaredevelopmentandanofftheshelve
appliances.
o Howtobalancecircularbenefits/financialbenefits/quality
benefits
o WhatkindofservicedoesaDutchCalvinistcustomerwant
o Howtoexplainmymotherthatshewillneverownthewashing
machinesheisusing?
o Howtodifferentiatefromleasing/renting/subscriptions/etc
Howtoorganizeacircularbusinessmodelinastilllinearsystem?
o Theownershipandresponsibilityforthematerialremainswith
themanufacturer/lieswithBundles/istransferredtotheuser
o Theservice,repairs,maintenanceisofferedbythemanufacturer
/bundles/retail/thirdparty
o Theretailpartnershavetochangetheirrole/havetoaccept
newcompetition/arepassed
o Logistics(forwardandreverse)isdonebythemanufacturer/
retailer/Bundles/user
Whatcharacteristicsmakeawashingmachinecircular?
o Endlessdurability/managedobsolescence/lifetimetunedwith
servicecontractduration
o Motorishighestclassenergyefficient/canbereplacedbya
moreefficientone
o Componentsandmaterialscanbereused/easilyseparated/
replaced
o Itisreturnedtothesamemanufacturer/reuseorrecyclingis
managedbyageneralinstitution
o Themachineisremotelymonitored/operated
o Energymanagedisincluded/utilizationiscontrolled
o Themachineisoptimizedforperformanceproposition/sharing
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