The success in adopting a circular business model (CBM) varies greatly from one business to another, as it depends on the stakeholders and customers-alike buying in, every step of the way. Here are some factors that can potentially challenge B2C and B2B in specific use cases.
KNOWING WHERE YOUR PRODUCTS ARE
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.
This knowledge is far more available for B2B industrial goods. The reason why this information is being tracked is rarely driven by sustainability goals. Instead, liability concerns or maintenance contracts drive transparency. For the circular economy, this creates at least a decent starting point to offer additional services on top.
OWNERSHIP VS AS-A-SERVICE MODELS
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.
STRUCTURED AND REGULATED WASTE FLOWS
Most industries today have evolved towards clear waste management policies. There are rules and standards already in place that offer some guidance or framework to follow.
For consumer goods, if a consumer doesn’t properly follow guidelines, there are rarely checks or decent fines in place.
It’s not an easy issue to tackle. Enforcing better behavior relies on better product and material knowledge.
PERSONAL AND DIRECT CONSEQUENCES
The people who are making decisions about the afterlife of used products have a different personal relationship with them.
One manager could make decisions in excel sheets on what might happen with a product located on the other side of the planet. The other person, in a B2C context, will experience the direct consequences of choices.
INFLUENCE OF ETHICS
In a B2B environment, many decisions are based purely on rational short-term economical drivers, or a need to meet compliance standards. For large-scale change to occur, the relevant parties must make informed decisions based on an ethical understanding of the impact of their choices. In this instance, shared responsibility and distributed decision making do not help.
In a consumer context, the shift in ethical standards of one individual can quickly shift a certain product-buying decision. The influence of ethics in a B2B context versus the B2C context is very different.