ARCO,
There is especially an opportunity for this shift within the interior design and architecture space, where products and materials are frequently used and switched out. The common business model in today’s design industry still struggles to create with the end in mind: spaces are created to be used for a specific purpose and not optimized to be re-used again. Research from
By transitioning to innovative business models with a circular focus, design businesses will still be able to share important products with customers while reducing resource extraction on one end and waste buildup on the other. Some of the circular business models of the future that we’re starting to see are products as services, product use extension and take-back programs.
Products as Services
One of the latest innovative business models we’re seeing is one where items that were typically sold as products are now being sold as services.
These service models enable customers to keep up with the latest and greatest products without contributing to waste. Businesses are able to take back the products when they start to wear and tear or the customer no longer needs them, finding ways to reuse the materials or get them ready for a new customer. The success of the business changes from volume to performance, therefore extending the life of the product. This mindset shift will also mean a shift in the way products are designed, as designers and manufacturers are incentivized to create products that are longer lasting and use ingredients that withstand wear and tear for longer. Businesses that turn to the product as a service model will have to consider the durability and impact of the materials they work with in a way they hadn’t before.
Product Use Extension
Another circular business model explores opportunities to extend the life of a product after its use. In the architecture and construction space, this can mean finding ways to renovate existing spaces with existing materials rather than bulldozing and starting fresh. A recent Bloomberg article highlights how the
Architects are typically inspired to create something new, but there needs to be a shift in excitement to transform older buildings just as well, especially with a circular mindset. Not only does it create more carbon emissions when we build a new structure, there are also outdated energy systems and embodied carbon within materials of older buildings that contribute nearly 40% of total global greenhouse gas emissions, according to the
For interior design, product use extension can mean creating modular products that can easily be taken apart.
Take-Back Programs
Take-back programs will likely be the easiest transition for traditional business models into more circular practices, although they will require innovative logistics. Often, organizations with this model have developed a way to reutilize the materials from used products to create new products, enabling the business to rely less on resource extraction. It also tends to build a strong loyalty with customers who have an incentive to continue buying products, knowing they will either be able to trade it in for a newer model or receive a payment of some kind.
The take-back model has already been adopted within the fashion industry, especially with businesses that are already using recycled and regenerated ingredients in their design. However, there is an opportunity for the design industry to also utilize this model. For example, Aquafil’s carpet recycling centers have provided
Building a Circular Business Model
Moving from a linear to a circular economic model brings multiple benefits, including the reduction of pressure on the environment, the optimization of the availability of raw materials and an inevitable boost to innovation and economic growth. The companies that lead the way with circular business models have given us an example of what is possible and an inspiring hope for our future economy.
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