B2B vs B2C: A very different circular business model challenge – Board of Innovation

A challenge most consumer products face is the complete lack of information about who owns your products and where they end up. It takes a lot of effort and alignment within an extensive value chain to pass this info along retail channels, distributors, resellers, and potential aftermarkets. At best, some companies ask consumers to register on their website but even in that situation, the goal here is to upsell new products later, not to make any difference in the circular economy. The info gathered might not even be suitable for that purpose. 

This knowledge is far more available for B2B industrial goods. The reason why this info is being tracked is rarely driven by sustainability goals. Instead, liability concerns or maintenance contracts drive transparency. If a windmill gearbox in the middle of nowhere breaks down, everyone involved has a strong incentive to quickly know who produced this machine and who could/should help out. For the circular economy, this creates at least a decent starting point to offer additional services on top. 

While toys-as-a-services are still fairly niche, this business model approach is already very familiar in many industrial contexts. The party who “owns” an asset will make decisions about what happens after a product has been used and potentially what needs to happen in the next stage of the life cycle. Assets made available under a service model, are more likely to be taken back, refurbished or be recycled.

Further adoption of this model in the consumer space is recommended. However, many bottlenecks still exist. For example, the rise of monthly subscription services has already created a backlash. Many consumers and families are seeing too many different service providers,  all with their own support channels, payment policies, and so on. At some point, the bundling of subscription services for families could take a cue from facility management service in a b2b context. In that model, a single service provider takes care of multiple assets.

Most industries today have evolved towards clear waste management policies. Nobody would “dump” a gearbox in the wrong waste flow. There are rules and standards already in place that offer some guidance or framework to follow.

For consumer goods, too many flows today are “recommended” policies to follow. If a consumer doesn’t properly follow guidelines, there are rarely checks or decent fines in place. A broken (or unused) toy car can be thrown in the regular waste bin. No questions asked.

This one is not easy to tackle. Enforcing better behavior relies on better product and material knowledge. But how can one family understand all the different material properties and make the best decisions per product? Large B2B organisations have dedicated specialists to help out.

The other person, in a B2C context, will experience the direct consequences of choices. e.g trash and old items piling up in their own garage. The more people are aware that certain products should belong in landfills, the more a person would feel guilty when he or she would throw an old toy straight in the bin. Ticking an anonymous box in a spreadsheet is easier from that point of view.