Short Answer. Ever since sustainability has climbed the corporate agenda, businesses across the globe are looking for ways to become more sustainable, reach carbon neutrality and reduce their carbon footprint.
Detailed Answer. The Situation Ever since sustainability has climbed the corporate agenda, businesses across the globe are looking for ways to become more sustainable, reach carbon neutrality and reduce their carbon footprint.
The motivation to do so comes from different avenues such as internal, competitor, market push and government regulations.
No business leader doubts that sustainability should be on the company's agenda and as a result companies across the globe are taking carbon emissions more seriously and looking at topics like sustainable supply chain, sustainable products, sustainable raw materials, sustainability in the workforce, sustainable business models etc.
The Problem But once you have a sustainable product, sustainable production process, sustainable packaging and a sustainable distribution process, is that the end of your sustainability strategy and journey?
No matter how sustainable the production process is, if products still end up in landfills, we’ll continue going in circles. The solution A subscription-based business model is the missing puzzle piece helps keep products away from landfills specially when they still have useful life in them. Subscriptions create a closed-loop way of consuming products where products are built to last and their lifecycle can be extended through sharing among multiple consumers.
In a subscription model, consumers have the motivation and incentive to return the product back to the vendor/manufacturer. Ultimately, products don't end up in landfills because at the end of the rental cycle, they are either pushed into another rental cycle, refurbished, or recycled for parts that go into the manufacturing process of more products.
"We have been quite ambitious with our sustainability goals from the start. We stared with making the product as durable as possible. Then we invested in CRS standards in our factory in China and then we added subscriptions in an effort to build a sustainable business model for Bugaboo.
Rolf Smeding
Director of Business Development
The Benefit Not only does a subscription-based business model keep products from landfills and extend their lifecycle, it also enables companies to learn more about the usability of their product directly from the consumers. A subscription-based business model not only aligns with sustainability goals but also offers several possibilities in achieving them.
Example : Companies like Apple, Yuno, Bugaboo and more are taking active steps towards becoming responsible and have identifies subscriptions as a key component in doing so.
Apple's Trade In and iPhone Upgrade Program
Apple already have a trade-in system in place where Apple customers can send their old Apple products in exchange for apple credits.
Apple also offers an iPhone upgrade program, which is a subscription in which members pay a fixed recurring fee and can exchange their old iPhones for newer models.
Both programs enable Apple to get access to their old iPhones. Since iPhones are high-quality and build to last, Apple can extract tons of useful material from the old iPhones and use it for the production of new ones or resell them on second-hand market places.
Yuno & Grover's Consumer Electronics Subscription Service
Companies like Grover and Yuno, who sell products but don't make them, are also taking steps towards sustainability. They've introduced subscription-based models, which means customers can rent products instead of buying them outright. This helps in making products last longer and encourages circular use, reducing waste and promoting a more sustainable way of consumption.
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