The Happily Ever After of Sustainable Businesses (V) - The Final Chapter
We have all heard the raving success of innovation such as Spotify, Uber, Lime, Airbnb on creating an access economy where people buy access to the service that they need instead of buying the right to possess the item, and it works well. Business owners are becoming more creative in ways that they can offer their products to people. The problem here is whether people are ready to rent or only gain access to everything that they use?
The reluctance to rent everything
Referring back to the Behavioural Study on Consumers’ Engagement in the Circular Economy report, it was interesting to read that 91% of consumers have never rented nor purchased anything secondhand, based on the categories they had been surveyed for. This includes the categories of clothing, consumer electronics, small and major household appliances and furniture. With a mere 6% that have at least purchased one of the above categories secondhand. We need to hack the mindset by thinking what made it OK to rent music but not OK to rent the oven or the coat?
When it comes to household appliances and personal electronic devices, between 41-48% do not want to rent or lease the items. For more personal items such as clothing, up to 50% of the respondents still like to possess a new and unused product that they use habitually. Which means that perhaps rental services may not be attractive for them.
However, when looking at the rest of the responses, the concern that people have are that they prefer not to be bounded by contracts. They did not know it was possible. In fact less people thought that it was more expensive than buying the product or trusting the company was an issue.
All of these perceptions could be areas of innovation that small businesses may work on. In better communication, liability and commitment free services that provide flexibility. As long as, consumer expectations have been met and trust is built, as we discussed in the previous chapter (check out part II about consumer expectations).
The lust for trends
Finally, if we think about why Spotify and Uber became successful. They used innovation to solved a problem that people had. They created a very convenient alternative that was attractive enough to consider not possessing the item. In addition, renting these items did not appear to be “cheap” in some way, if anything, it was trendy.
Yes, you heard it – trendy. We have to admit that there will always be a group of consumers that would like to stay close to the latest technologies or fashion movements. It would be unrealistic for us to believe that timeless designs will eventually be the only thing that people fall for. Many creatives would be out of job and out of luck if that were the case! To renew and rebuild is certainly a model that would be attractive to those that like to stay on trend, so as to rent.
Think outside of the box
In continuation to closing the loop on customers that may not find longevity of consumer goods attractive, one of the elements in rental is to give access to those that have a desire to be the tester of all things trendy. Finding ways to doing so without creating waste and harm to the society. Innovation is key here.
Who said that the rental concept must be limited to the same product? What if one day consumers could purchase credits that allow them to exchange items for different products every time? Across different companies?
What kind of experience can sustainable companies bring to consumers, perhaps even in a collective way? Uber started with people that needed access to a taxi ride. Moving on to serving people that didn’t mind sharing the ride with someone else. Ultimately expanding to different ways of transportation such as bikes, scooters and planes. Ultimately, it is to get you from A to B. Could the future be that access economy provides access to more than one modality or necessity at the same time?
This brings us to the end of this mini-series of thoughts and opportunities for sustainable businesses to innovate and be a profitable business. As the story developed through the chapters, more and more questions were provoked. This is to demonstrate that, as business owners we seek maturity and prosperity through continuous learning, exchange of ideas and finding new ways to remain relevant and create a better impact.
Myth is a catalyst for innovation, and ideas of doing things differently. Join our community to be inspired and have the opportunity to engage directly with likeminded businesses. Or speak to us (email@example.com) to help you spark inspiration and put together a strategy that works for you, and aims at bringing competitive advantages to your sustainable business in the long run.
Have you found your happily ever after yet?