A customer’s experience is hugely important in the successful adoption of circular products and services. However, the current focus is more narrowly on resource efficiency. Using a recent real-life example, here’s how you can future-proof your business with some concrete steps.
Picture it. You’re just off a long zoom call. You need caffeine. You go into the kitchen to try your new coffee. It’s a ‘more sustainable’ one this time because you’re trying to be more eco-conscious. You take a sip. But today it tastes bitter (poorer quality), it’s 50p more expensive (poorer value), and worst of all you have to return the packaging to a local drop-off point on your way to work (less convenient). And it’s Monday. Morning.
Sound familiar? You’ve just had an encounter with a circular economy (CE) initiative that has overlooked its impact on the customer experience (CX). My guess is you won’t be indulging your eco-conscience the next time you visit the supermarket.
Lack of CX consideration is unquestionably and expensively causing CE projects all around us to fail. The harsh truth is that with over 60% of customers now actively choosing companies with a clear sustainability strategy [1], that’s not a failure that most can afford.
CX is almost inevitably impacted in a circular economy. Price and quality can be affected when products are made with recycled contents and convenience can be impacted when customers are required to return reusable packaging. Yet, the vast majority of businesses are almost obsessed with fine-tuning the efficiency of circular products.
This also dominates the current research landscape [2]. But while new studies are emerging on the importance of CX, it seems we don’t fully understand how CX is impacted when circular products and services are adopted. Luckily, we can use our own eyes to learn from real-life examples.
The food and beverage industry provides an insightful illustration. For instance, a leading UK supermarket recently attempted to bring in reusable packaging for each shelf item. It stocked over 50 brands, from Coca-Cola to Heinz, in reusable containers that cost shoppers a deposit of £1. The deposit was refunded via an app when the container was returned to the store. The containers were then cleaned and returned to the suppliers for refilling.
One key reason for this failure was that it involved a complicated change to the customer journey (in this case convenience) that was too onerous on the customer. Specifically:
The change was too large
- We currently shop based on ease and impulse. In theory, it doesn’t sound like a big change, but in practice, it impacts convenience too much.
- It shows how important CX is because the steps required of the customer were enough to derail the whole CE project.
- From my own experience, I know that when I am tired and hungry at the supermarket, I don’t want to be forward planning my entire shopping.
- More research into the action-behaviour gap is required.
Lack of customer education
- This is an interesting one. Large changes in CX like this require a significant change in buying behaviour. A customer has to choose to buy products that have a different price, quality, convenience, etc.
- So why aren’t we using behaviour change science more? There is a wealth of research on why humans behave the way we do. If we’re going to solve problems like this, it’s time for urgent cooperation across disciplines.
Back at our supermarket, a selection of behaviour change theory ‘interventions’ could be deployed to help educate customers. Education campaigns are one of the most important methods of changing behaviour. For our shopper, this could increase understanding, support, and awareness of why they should change their weekly shopping habits.
Incentives, rewards, or taxes such as the 5p plastic bag charge are also effective. This is reflected in the procurement director’s comments following the stopping of the trial: “There is work to be done to create a culture and to encourage behavioural change among customers.”
In my view, although this supermarket initiative did not succeed in the way many had hoped, it certainly wasn’t a failure. Not only does it show that CE initiatives are starting to be taken seriously by big players, but they’d sensibly trialled it before a nationwide rollout so their financial damage was minimised. Perhaps most useful of all, it provides rich insights and an illustration of the importance of CX in CE.
Actions you can take
Survey your customers’ wants and needs: Do they want this project? Are they engaged and supportive? Are they willing to put up with the changes in CX, including price, quality, and value? What do they not want to sacrifice? (Bitter coffee – no thanks). Also observe customers and collect data to inform future decisions.
Minimise new behaviours and unfamiliar actions where possible and maximise behaviour change interventions such as educational campaigns. Trial changes in a pilot study and learn from others. This means looking at where other companies have succeeded and failed.
Final thoughts
It can cost millions of pounds to implement a CE project. Not to mention the financial risk of falling behind your competitors if it fails. The beauty of integrating a properly considered CX strategy into your circular products and services plan is that it doesn’t have to cost the earth and has potential high rewards. At the very least, it can be a relatively inexpensive addition to a project you are already doing. The evidence is clear and mounting and there to be used. What have you got to lose? In fact, can you afford not to?
