15 minute read
Before we get into the detail of our third blog on Outdoor by ISPO, let’s just pause for a moment to consider today’s title: we live and work in Wales; we’re talking about design for durability; we spied an opportunity for a cheap pun on a Manic Street Preachers track. You might have to just accept this happened and read on.
And whilst we’re distracted from the topic at hand, it’s also worth celebrating the great work that the outdoor industry is doing in terms of sustainability. It’s all too easy, when putting a sector under the microscope, to focus on what else could be done, ignoring what is already happening. At Outdoor by ISPO, we saw examples of production-side initiatives (recycled and recyclable materials, as we discussed in our first ‘blog; lower-impact natural / regenerated materials such as Refibra Tencel from waste cotton and SeaCell algae-based materials; PFC-free durable water repellent technologies as discussed in our second ‘blog; natural dyes made from residual waste from the food industry) and innovative approaches to offsetting broader climate impacts of the industry such as Patagonia’s Regenerative Organic Agriculture project. Outdoor Industry guru Anne Prahl has written about these initiatives much more eloquently than we ever could. We also heard about the different ways that brands are being transparent about their sustainability performance (which will be the subject of our fourth and final ‘blog). What we’re interested in having a more in-depth look at, however, is the consumption-side activities that brands are engaging in; in other words, what services and business models are brands adopting that extend the usable lifetime of their products?
If you’ve read our earlier ‘blogs, you will have noticed by now, that we’re pretty focused on what happens after the factory gates - how consumers buy, use, look after and dispose of their products at end-of-life - and, importantly, how businesses help them to do that. You may wonder why it’s so important to us? Well, the main reason is that we believe that, if we don’t tackle the issue of unsustainable consumption, the global environmental benefits of all of the great ecodesign activities on the production side could easily be wiped out. In the UK, the House of Commons Environmental Audit Committee recently published Fixing Fashion, a detailed analysis of clothing consumption and sustainability. One of their findings was that the carbon, water and waste savings achieved by WRAP’s excellent voluntary agreement, the Sustainable Clothing Action Plan, have been offset by the increased volumes of clothing sold. Now, we know that fashion is an extreme case; however, a quick peruse of the available literature shows that Patagonia’s profits have quadrupled over the last ten years. We’ll hold our hands up now - we haven’t done our homework on these figures, so it might be that this increase in profits is at the expense of other industry players; in addition, revenue from repair and resale of used clothing (of which more later) needs to be factored in. However, looking at Patagonia’s B-Corp reports for 2017 and 2018, it is only really in the last couple of years that resale has really gained traction.
So we’re going to go out on a limb here and say that we think that most of Patagonia’s profit comes from Selling. More. Stuff.
And, as we consider Patagonia to be industry leaders in consumption-side services, we think this will also be the case for the majority of outdoor brands returning increased profits. At the risk of repeating ourselves, production-side ecodesign might reduce the environmental footprint of an individual product, but if sales keep increasing, then the company footprint will continue to grow. All this leads us to one inevitable conclusion; the only way to really improve the environmental performance of the outdoor sector is, as Patagonia told us back in 2011, not to buy that jacket.
The challenge this poses for most companies is obvious; if a business doesn’t make profit from selling more product, how does it create sustainable value for its stakeholders? How does encouraging consumers to form long-lasting, caring relationships with their products make good business sense? We believe the answer lies in a reconceptualisation of the relationship between products and services; brands need to design business models that can deliver value for them and their users during the lifetime of a product so that they are less reliant on revenue at the point-of-sale. Or, as Al has previously described, their focus should be on realising the value-in-use of their products and services and not only on the value-in-exchange.
With literally millions of sustainable business models that brands could adopt, and a fair proportion of those based on maximising the value through the lifetime of products, how do brands go about choosing the right approach for them? We could go on forever on this topic (in fact, initially we did, which it why it has taken us so long to upload this ‘blog. Even now, it’s a doozie in terms of length). However, based on examples of great practice within and beyond the industry, we offer our top three tips for those businesses who want to pay more than lip-service to durability for sustainability:
1. Share the vision
There’s no getting away from it; the transition from selling products to creating value through durable product/ service market offers is a strategic one that affects everyone in the value network. For that reason, it’s really important to establish the direction you want to go in and look for opportunities to capitalise on shared values with your stakeholders (including your customers). Establishing a shared vision is what drives the business model, product and service design - and ideally to design out, or at least minimise, any trade-offs against sustainability objectives.
When Riversimple set out to develop an ultra-low emission vehicle, they first established a clear purpose: ‘To pursue, systematically, the elimination of the environmental impact of personal transport’. This purpose has driven their customer value proposition - selling the service of mobility, rather than vehicles; their service design - a monthly contract that includes the cost of insurance and fuel; and their product design brief - prioritising weight minimisation, fuel efficiency and ultra-low emissions at point-of-use. In doing so, Riversimple have acknowledged that there are some trade-offs to be made regarding the environmental impact of lightweight composite materials used in construction, and in the emissions associated with hydrogen production. In the meantime, they are pursuing projects on lower-impact composite materials and processes and keeping a watching brief on the ongoing research into green hydrogen. Their business model also makes Riversimple responsible for the end-of-life of the vehicle; it is in their interests that the vehicle stays in use for as long as it is the most fuel-efficient option.
We’re always wary of using Patagonia as a case study (they must be getting bored with it by now), but they are so far ahead of the game in terms of service offers in the outdoor industry that it’s almost impossible not to. Until 2018, Patagonia’s mission statement was to ‘build the best product; cause no unnecessary harm; use business to protect nature; and not be bound by convention’. Their definition of the ‘best product’ included criteria of functionality, repairability and durability. This has driven their customer value proposition (long-lasting products with services aimed to extend lifetimes; service design (successfully prioritising repair and reuse over recycling through the WornWear initiative) and product design, including those pesky trade-offs around durable water repellency that we discussed last time.
2. Stop, collaborate and listen
Sorry, we did it again. Bear with us - it’s warm and sunny and perhaps a bit of silly season has crept in … and who doesn’t like a bit of Ice Ice Baby (apart maybe from Eminem, Queen and David Bowie)? But, we genuinely believe collaboration is the key to creating successful product/service offers, whatever their purpose.
Collaboration across the existing value network can help to ensure the shared purpose that brands have outlined is not only understood, but acted upon. We were lucky enough to work with Riversimple and QSA Partners on a feasibility project that engaged the value network in offering sale-of-service of vehicle components a couple of years ago (we can’t take any of the credit for the product and service design outlined above, though). We quickly identified that it’s important to make sure that people in the value network understand how the shared purpose affects their relationship to the business, and to identify where existing business objectives can be aligned to achieve the purpose. This saves a lot of wasted time, effort and heartache in the long-run.
Maximising the value of a service might also need require expansion of the value network. When Orangebox began to remanufacture chairs, they introduced new partners to take care of the remanufacturing logistics and processes while they continued to focus on core business activities. When a sustainable public procurement tender was released for complete office refurbishment, Orangebox collaborated with several other companies to deliver an award-winning solution.
We think there’s real potential for greater collaboration across the outdoor industry. For example, let’s consider the existing status of repair services. Our not-very-scientific analysis indicates that extending existing warranty and repair services are often the first steps that brands take in product lifetime extension. Most often,this links the service to ‘problem’ products, relies on consumers being engaged enough to search out repair and requires significant resources to run - indeed, a number of brands encourage ‘do-it-yourself’ repair guides which promote longevity without putting strain on repair services. In this form, warranty and repair offers little opportunity for creating value-in-use, and it is not in a brand’s interest to promote greater uptake. However, what would happen if the outdoor industry worked together to develop a global network of repair services? And who would be involved in delivering the service? Perhaps, like Vaude, it might make use of engaged customers through repair cafes? Or maybe the service offer might be ‘preventative maintenance’, offered as part of a lease for interested consumers, or to brands that already offer local rental schemes, such as Rent-a-Plagg and Vaude? Such a model could open up opportunities for companies to practice more effective product stewardship and gain value from multiple users, or resale of more products at end-of-life. Of course, it’s not that simple. All of these potential models come with risks - which leads us to our final tip…
3. Prototype, prototype… and then prototype again
The road to product-service systems is littered with good intentions, as Vaude’s experience with Ecolog will attest. It’s possible to create a technically perfect service, only to find that those pesky consumers don’t use it, that it leads to unintended environmental consequences that outstrip its benefits, or that the value network isn’t able to cope with the realities of the new business flow. When Orangbox ran a pilot-study on their chair remanufacturing scheme, they found that the social enterprise originally engaged to conduct remanufacturing was not able to manage the flow of products being returned, or to remanufacture to the specified standards. The transition to a more service-based business model can be slow, might occur through multiple iterations, and take businesses into hitherto uncharted waters where there might be sharks. That’s why it’s so important to find cost-effective ways of testing the riskiest parts of your business model.
Intentionally or not, Patagonia offer a useful example of how outdoor industries can engage in business model prototyping. Their first resale venture through Ebay provided a relatively low-cost way to test consumer readiness for an e-commerce platform. Physical resale platforms at flagship stores in the US informed Patagonia about the appeal of used gear to their regular consumers. Pop-up events at own stores and partner venues would have contributed to the company’s understanding of the appetite for repair and reuse. We may sound cynical here; that’s not the intention. We genuinely believe that Patagonia pursue the Worn Wear programme to achieve their pre-2018 mission (see 1), and also to contribute to their current mission statement: ‘We’re in business to save our home planet’. Better to do that by gently stepping into new ways of working, than to plunge in and regret it later.
For smaller companies who are considering changing their business practice, but are intimidated by the scale of Patagonia’s prototyping and the resources they have at hand to facilitate it there are much simpler, bite-size approaches available for testing new value propositions, products and services with customers and the value network. What’s also great is the wealth of information out there to learn from, both within and beyond the industry. Patagonia and Vaude have both published the details of their service experiments. Online resources such as the Ellen MacArthur Foundation website and publication Circulate provide detailed case studies of business models aimed at extending product lifetimes. The European Outdoor Group and other industry trade bodies can play a massive role in providing opportunities, support and guidance for making durability count. It’s a great time to try new things!
If you’ve made it this far, then congratulations! It’s a long read but one that we think is really important, and we’d love to talk more about it. Please do comment or ask questions via LinkedIn.
For our fourth and final ‘blog, normal service will be resumed (1,000 words or less - we have been warned!), and we’ll be talking about transparency initiatives.