Customer Value in a Circular Economy
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This document summarizes a presentation on consumer value perspectives in a circular economy. It discusses how circular economy-based services can create value for consumers by keeping materials in use for longer. The presentation examines research questions about how customer value is perceived in a circular economy and how the value concept can be better utilized in circular service development. It then outlines findings from a consumer workshop where participants discussed renting versus owning products and their willingness to engage with different circular service models involving renting furniture, appliances and clothing. The presentation concludes that while circular services provide benefits, consumers still prefer ownership and that shifting mindsets will require adding personalization and a feeling of co-creation to circular models.
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Customer Value in a Circular Economy
- 1. 129.5.2017 Maria Antikainen Consumer service innovation in a circular economy – the customer value perspective Maria Antikainen, VTT Minna Lammi, University of Helsinki Taru Hakanen, VTT ICSERV2016, Tokio, 2016 @AarreResearch
- 2. 229.5.2017 Maria Antikainen Circular economy transforms business Technology as an enabler and accelerator Introduction RQ Literature Method & Results Conclusions The circular economy (CE) is based on: • Zero waste • Keeping materials in use for as long as possible • Preserving or even upgrading value by creating added value through services and smart solutions
- 3. 329.5.2017 Maria Antikainen RQs & method RQ: How do CE-based services create value for consumers? We need to.. § increase our understanding of the way customer value is perceived by consumers in the CE § understand the ways in which the value concept can be better utilized when developing CE-based services. Introduction RQ Literature Method & Results Conclusions
- 4. 429.5.2017 Maria Antikainen Consumers in CE § It is easier to gain acceptance of a new practice when it closely resembles other practices that are already common. (see e.g. Mylan, 2015) § In order to offer superior value, services have to be easy-to-use, time saving, low- risk and cost-effective (Antikainen et al. 2015; Lammi et al. 2011; Mylan 2015) § Some factors in consumer value creation more linked to temporal issues, some are more permanent (Antikainen and Lammi 2016) § The relationship with the product has an influence on how attractive they perceive owning vs. renting or leasing (Antikainen and Lammi 2016). Introduction RQ Literature Method & Results Conclusions
- 5. 529.5.2017 Maria Antikainen Customer value Benefits • Service quality • Strategic benefits • Economic benefits • Practical benefits • Personal benefits • Emotional benefits Sacrifices • Monetary sacrifices • Non- monetary sacrifices e.g. time effort, perceived risk Customer value in CE Customer value: a trade-off between benefits and sacrifices that customers perceive when they purchase and use a service (Eggert and Ulaga 2002; Lindgreen and Wynstra 2005; Ravald and Grönroos 1996) Customers’ roles in value co- creation are central (Vargo and Lusch 2004). Introduction RQ Literature Method & Results Conclusions
- 6. 629.5.2017 Maria Antikainen Consumer workshop § In Helsinki, February 2016 § 42 consumers- five groups facilitated by a researcher. § All discussions took between 2.5 and 3 hours and were recorded. § The discussions were in Finnish. § Themes: recycling, lending, renting, sharing secondary use of products, relationship with products § Three scenarios.. Introduction RQ Literature Method & Results Conclusions
- 7. 729.5.2017 Maria Antikainen Scenario 1: Would you be interested in renting a couch if... § There would also be a warranty (for example if the couch was dirty) § You could also change your couch to a new one after 5 years Introduction RQ Literature Method & Results Conclusions
- 8. 829.5.2017 Maria Antikainen Scenario 2: Would you be interested in renting a washing machine if... § It could send information about its condition to the service provider in order to receive maintenance before breaking down? § Detergent could be also included in the same service package, and you could pay based on clothes washed § You could also get advice on more efficient usage of the washing machine (for example, detergent dosage) to your email or mobile phone Introduction RQ Literature Method & Results Conclusions
- 9. 929.5.2017 Maria Antikainen Scenario 3: Would you be interested in renting clothes if... § You could change your wardrobe based on the seasons § You could get everyday clothes, not just clothes for special occasions Introduction RQ Literature Method & Results Conclusions
- 10. 1029.5.2017 Maria Antikainen Customer value in CE- Value of three circular service models Benefits Practical • Quality of the product • Immediate repairing • Increased performance • Flexibility • Additional services Economic • Lower risks Personal • Variability Sacrifices Psychological sacrifices • Feeling not so comfortable • Different payment model • Privacy Economic sacrifices • Higher price “All layers of life relate to all furniture. And I think that it would be terrible (to hire a couch), I don’t think that I would sit on a hired sofa. I would just keep it in a corner.” Let’s say that you can make a mistake when you buy something, so hiring would be a good idea because you can try it a week, two weeks.. Introduction RQ Literature Method & Results Conclusions
- 11. 1129.5.2017 Maria Antikainen Conclusions § The balance between the economic benefits and sacrifices is crucial. § Owning still preferred - change in mindset needed § Regarding some products, personal and emotional benefits tend to override other factors. § Adding personalisation and a feeling of co-creation needed § Small steps towards services Introduction RQ Literature Method & Results Conclusions