”Products that nail both convenience and reputation show how powerful this combination can be, and how insignificant price becomes at that point.’’

- Nick De Mey, co-founder at Board of Innovation

What role does sustainability play for our marketplaces? Here is what we learned so far...

More and more people are pushing for change, most of them are consumers who are evolving their buying behaviours and influencing economic trends toward sustainability. Companies are gradually adopting some of the principles of the Sustainable Development Goals resulting in being more resilient even during the Covid-19 crisis.

Why do users buy second-hand or sustainable products?
Let’s face it - many of the consumer products on the market are harmful for the environment and most buyers are nowadays aware of it. Better alternatives are available, but only a few people switch to these products. Price and convenience still play a major role in the choice. Nevertheless, research shows that there are intangible and less explicit motivations behind our users’ decisions, like: “How does it make me feel?” or “how do i think it makes other people feel?”. This is why many sustainable brands and products leverage users’ emotional and social factors to build their reputation, but also try to remove extra friction in making sustainable alternatives easily accessible.

Our users value sustainability high in their purchase habits
As research conducted by tutti.ch in 2020 confirms, sustainability, only second to convenience, is one of the main motivations to buy secondhand fashion, furniture and tech products . The data shows that GenZ has a high affinity for buying second-hand items online and has an adoption rate that is about 15pp higher compared to the 25+ age group.

Ricardo Secondhand Day

Secondhand Day, which took place on September 26, 2020, is an initiative organised by Ricardo and other organisations to raise awareness about secondhand, CO2 emissions and promote a more environmentally friendly consumer behavior. Moreover, on this day, Ricardo launched a new feature, a detail that displays the quantity of CO2 saved when buying an item on Ricardo (see picture on the left).

Surveys showed that users are in favor of such initiatives and if they noticed the new product feature. The result of the survey is that, while people generally think Ricardo already does enough to promote second hand throughout the year, they also think it is important to have such initiatives in the future. By buying and selling on Ricardo, users believe they are having a positive impact on the environment and the community.

Knowing how much CO2 is saved when buying an item is important for Ricardo users. In fact, the CO2 feature on the platform gets noticed. 

“The world will not evolve past its current state
of crisis by using the same thinking that created
the situation.”

- Albert Einstein

The Circular Economy
There is a shift underway in the global market and consumption habits that is affecting the way products and services are created, distributed, and used: the Circular Economy. It’s not another green jargon but a new paradigm which small, medium and big companies worldwide are embracing, and it’s affecting most of the areas we cover with our marketplaces: from housing to mobility, to fashion, tech and jobs.

From linear to circular: the approach
Technological change on an unprecedented scale, the urgency of the climate crisis, and the emergence of new socioeconomic systems such as the sharing economy create the ideal conditions for a radical switch from a linear “take-make-waste” economy to a more circular one. The circular economy is a framework for an economy that is restorative and regenerative by design. It aims at eliminating waste through the continuous use of resources and products.

The business opportunity and how to finance it
According to a recent research from Accenture1, the Circular Economy will generate a market growth opportunity of 4.5 trillion by 2030. This value can be generated not only by reducing the cost of eliminating waste (energy, materials…),
but also by creating new business models or opportunities to pivot established ones and, with new businesses, millions of new jobs.
The EU’s “Circular Economy Action Plan” and government initiatives such as in Switzerland, aim to detax companies introducing circular solutions. Pioneering institutions in the financial sector are already capitalising on the circular economy opportunity (more on how to finance the circular economy here).

The numbers of the circular economy

  • The sharing economy market is expected to grow twenty-fold by 2025.
  • 71% of customers are expressing a greater interest in circular business models, such as rental, resale, and refurbishment, as well as investing in higher quality apparel following the pandemic.
  • Fashion: the resale market grew 25 times faster than the broader retail sector in 2019 and is expected to be bigger than fast fashion by 2029.
  • Housing: Retrofitting 2 million homes for energy-efficiency could create nearly 2 million new jobs.
  • Mobility: The number of EVs on the road is expected to reach almost 10 million this year, as sales grow despite the Covid-19 pandemic.

(Sources: The Circular Economy Handbook, ellenmcarthurfoundation.org)

Circular marketplaces and new business models
Already today, traditional online marketplaces and well-known brands are switching to circular solutions: IKEA launched the resale of pre-owned furniture, Zalando a secondhand fashion platform. But it’s not just about secondhand. New models and startups worth keeping an eye on are emerging, switching from the concept of ownership to “product as a service” and helping to reduce waste in some of the most polluting industries in the world. Mud jeans provides organic cotton jeans to customers through a leasing model, IFIXIT offers digital manuals and kits to repair electronic devices. The Swiss market can count on good circular examples as well: Cyclon by On is the first 100% recyclable shoe available on subscription, Thingsy is an app that allows you to easily manage your receipts, returns, repairs, resale and sharing of products digitally. 

How can we make our companies more circular?
As a designer, I tend to be positive about the future, and continue to believe in the power of design to change the world. Business is design as well, so I like to think that the circular economy can happen only by design.

3 principles to think more circularly as an inspiration for our companies:

  1. Find out where value is lost or where the biggest waste challenges lie, solve existing issues and start in small scale 
  2. Embed circular economy and design thinking into organizational culture to rethink products and services to optimize usage, reduce waste and close material loops, and test your ideas in a lean way
  3. Enable transformation through new connections and partnerships in the private and public sectors.

 

Marta Andreoni, Senior UX Designer und UX Design Lead at PUX

We had a very insightful discussion with Christine, Head of Brand Management & Advertising at Ricardo, and Stefan, CTO and Climate Officer of Zattoo about the central questions of sustainability for digital products and their challenges and opportunities. In this video, we summarized the highlights of this discussion.

In the monthly Product and UX letter the PUX team shares insights about projects, interviews with product gurus and personal anecdotes inside and outside the TX group:

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