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