4 consumer barriers to adopting a circular business model

We believe that making a switch to a circular economy is the future. And if 'circular economy' isn’t a term you’re familiar with now, you will be very soon. The reason? We have an ever-increasing, pressing problem on our hands: what to do with waste. A circular economy gives us a viable, actionable solution.

The Problem

Unfortunately, waste isn’t going anywhere. And if it does go somewhere, that place is usually a landfill site. This isn’t surprising when you consider that – globally - we continue to produce tons of rubbish every year – 2.12 trillion tonnes in 2022 - and generally speaking, whichever country we hail from, we lack the means and infrastructure to be able to process or recycle a significant amount of it properly.

And there are added complications. Mismanaged and untreated waste leads to environmental disasters which threaten species on the land and in the sea (we’re including humans in that statement), as well as natural habitats and delicate eco-systems. Waste also leads to geo-political tensions as well as pollution as western countries offload their rubbish in order to rid themselves of the headache of disposal. Worse of all, waste leads to even more waste as increasing natural resources are mined and used up in order to cope with ever increasing levels of consumption.

The Solution

It makes sense then, to embrace a new way of life. A different way of doing business. To shift from the linear reductive economy to a more sustainable model, where holistic, environmentally in-tune solutions are found and where no one – man, bird or woolly beast – and nothing – the individual, the community, the natural world - is the loser.

The solution has been proffered and it offers a tantalising glimpse of a feasible, equitable, green approach when it comes to the running of future global economies: the Circular Economy. With a circular model, not only will waste be recycled and reused as a matter of course, far fewer items will need to be produced (and therefore thrown away) in the first place.

Of course, change at any level is painful, difficult and often messy. However clear the advantages and whatever the benefits, change takes a long time to implement and even longer to become the norm. The move towards a circular economy will meet varied, complex obstacles along the way, stumbling blocks if you will, that need to be met head on.

In this article, we are going to focus on one of the stumbling blocks: the consumer barriers to a circular economy.

The Main Consumer Barriers to a Circular Economy

In order to run a successful circular economy all the stakeholders in that economy need to be fully on board: governments, international organisations, industry leaders, employers, employees, scientific research groups, universities and communities. The list of stakeholders is huge and ranges from multi-national, far-reaching conglomerates made up of thousands of people down to the single man or woman on the street just trying to get by. One group of major stakeholders is the consumers, because, at an individual level, whoever we are, however we’re employed and wherever we come from, each one of us at some point or another will be a consumer.

Traditionally, it’s tricky to study consumers and it’s become even more complex following events of the last few years, including the global pandemic. Marketing experts constantly strive to understand what drives consumer demand and in which direction trends are going to go. Additionally, much of the research literature written so far about the circular economy has centred on the circular aspirations and practices of organisations and industrial businesses.

The problem is that there are as many types of consumer as there are products, each with their own set of circumstances, their own motivations, upbringing, culture, requirements and world view. True, a growing number of consumers are aware of the impact that consumerism is having on the planet and are open to the idea of making personal sacrifices to mitigate that impact. But actually putting these intentions into action consistently is a different story altogether.

So what could potentially be preventing consumers from fully embracing a circular economy currently. We believe there are five main consumer barriers: consumer scepticism, consumer cynicism, consumer disinterest, the need for convenience and customer vulnerability. Let’s take a closer look at each of these.

1. The Sceptical Consumer

There have always been those who have sought to minimise their carbon footprint and level of consumerism, but the last few decades have seen a huge surge in the number of on and off-line consumers who demonstrate their concern for the environment by where they choose to spend their hard-earned cash. 

Consumers have taken to social media in droves to mock excessive, unnecessary packaging, the words ‘sustainable’ and ‘environmentally friendly’ crop up in every unboxing video posted online without fail and it’s been proven by various studies that a significant number of customers are willing to both be loyal to a specific brand and pay a little bit more if they feel a company reflects their own ethical and ecological morals and values.

Perhaps inevitably and fuelled additionally by the media’s incessant focus on climate change and environmental threats, successful marketing tactics abound with the environmental credentials of a product being pushed to the fore as one reason to choose it specifically over the multitude of alternatives.

Naturally, this is all well and good if the product and its packaging are genuinely environmentally sound. But what if they’re not and the consumer finds out?

Consumers are far savvier than they ever were. They have access to the internet and this gives them access to each other. Many will research the claims of the companies from which they purchase. Sometimes, even a cursory bit of digging will lead to growing scepticism towards a company’s honesty and transparency if the company aren’t yet as environmentally friendly as they claim. Under the anonymity of a username or the protective shield of a computer screen, many consumers are not backwards in coming forwards when it comes to talking to a global audience about their discoveries or experiences.

Greenwashing is defined as the deliberate distortion of a company’s environmental practices and it has an enormous impact on consumers. They don’t like it and they’ll vote with their feet and their wallets. If they talk about it – which they invariably will – a brand’s image could take years to recover. Similarly, banging on about environmental benefits to the detriment of consumers’ own needs or even worse, forcing the consumer to compromise too much between functionality, cost efficiency and sustainability can also backfire, especially if they’re able to see, quite clearly, how difficult it is for them to recycle in the first place (see paragraph below, Cynicism).

The solution: It’s far better for companies to be honest and upfront, even vulnerable, about shortcomings and to admit that they might not yet be truly sustainable, but that they’re trying to make both the transition and a difference. Gimmicky ‘we’re green’ advertising and unsubstantiated claims might garner success in the short term, but if it’s not backed up by hard facts it will be a disaster in the long-term and risks consumer dissatisfaction and damaging, perhaps unrecoverable, backlash. It’s certainly no good in terms of embedding a circular economy. 

2. The Cynical Consumer

We’re all cynical at times, some of us more than others. After all, a little cynicism is a good thing, right? Nobody enjoys being taken advantage of and having a healthy dose of cynicism can be a lifesaver. Consumers, of course, aren’t exempt and cynicism can greatly influence their spending habits and patterns. ‘Consumer cynicism’ is a proper term and is defined as a customer adopting a form of behaviour (i.e. cynicism) as the result of being forced to interact continually with a system they mistrust but can’t always extricate themselves from.

So how does consumer cynicism create a barrier for a circular economy? The answer is because being cynical is a sign that consumers are less inclined to believe in the success of such an economy or the good intentions behind it. And, if they’re less inclined to believe it can work or function equitably, they won’t demonstrate enthusiasm for it, much less engage with or invest in it.

To temper down consumer cynicism therefore, it’s necessary to understand where it comes from. Unfortunately, a cynic would point out that there’s evidence a plenty to attest to the fact that the actions of successive governments are one of the causes of so much waste in the first place. The very things we’re repeatedly told to recycle are being disposed of by western governments under the guise of recycling. We’ve all seen articles about recycling being sent abroad to be dealt with, but which ends up instead being dumped and burned.

A cynic might suggest then that we need to deal with our own waste. Unfortunately, what’s also indisputable and one of the reasons why so much is currently sent abroad is that we lack the proper waste infrastructure to deal with both the amount and variety of refuse correctly. Recycling technology falls short. We’re told time and time again to recycle and reuse, but there’s a long list of items that can’t go in your blue bin and this varies depending on what part of the country you live in. It’s all so confusing. And then there’s the food industry and the impact of its packaging. With so much required to transport, protect and prolong the life of food and much of it made up of a mixture of recyclable and non-recyclable items, as well as limited options for buying food that doesn’t come shrink wrapped, boxed and labelled, it’s easy to imagine how personal recycling becomes, for a cynic, a quagmire of pointless wasted effort and despair.

 If all this is the case, how will it be possible to keep cynical consumers on side when it comes to a circular economy? Afterall, if they can see all this going on, why should they be inconvenienced or pay extra for a product just because it’s ‘green’? 

It’s an extremely valid point and one that is already being acknowledged by governments and industries alike as they set about trying to improve recycling infrastructure, incorporating new, advanced and up to date recycling technologies. Additionally, government policies have started to demonstrate that they’re fostering innovative and creative solutions to help industries deal with the shift to a circular model. Global corporations are also investing heavily in order to make the shift from the linear model and are being vocal about doing so and perhaps, more importantly, vocal about their own limitations and setbacks. From many companies, there has been a definite switch from putting the onus for recycling solely on the shoulders of consumer to a 'we're all in this together' mentality, where the consumer is provided with the knowledge and resources to make informed choices without feeling lied or sold to. It’s a start.

3. The Disinterested consumer 

Let’s face it, there will always be a number of consumers who are just not particularly interested in being sustainable or environmentally friendly, even if they say they are. This is known as the “intention-action gap”. Consumers such as these might say they like the idea of green products, but they don’t actually every get round to buying them. This is potentially the most difficult consumer to bring round. Convincing people to put their money where their mouth is can actually be harder than combatting either cynicism or scepticism combined. 

With this type of consumer, one solution could simply be to sweep them along in the changing narrative and hope that new values – embedded over time – will eventually become instinctive for them too.  A sort of herd mentality approach.

Another viable tactic for both governments and companies to take is to educate these consumers by showing them in no uncertain terms what’s in it for them. Why should they change their purchasing habits? Why should they bother to recycle? What are they going to gain from it? How is it going to make their lives better? Healthier? More convenient? What are the tangible, measurable results?

With this group of consumers, guilt won’t work. It’s vital to show empathy and understanding. No amount of cajoling or shouting by Greta Thunberg or David Attenborough is going to get through to them. Restrictions and lectures are pointless. Exciting possibilities, products and venues are the way to these consumers’ hearts.

And this creates an ideal opportunity for the creative industry. We’re talking here about the spheres of marketing and advertising, product design, graphic design and fashion (amongst many others). Linear narratives must be cast aside and the ways in which businesses communicate with their customers, how and where they do business with them and even what they sell to them must be reinvented. The people, the planet and profit can co-exist successfully, but a certain type of consumer will always need to feel as though they are the number one consideration. The trick is to come up with ways to make that happen which align with sustainability goals.

4. The Cash-strapped, convenience consumer 

Consumers enjoy and indeed, demand greater convenience than ever before; they’re used to being able to choose from an infinite number of products in all price ranges. They used to navigating websites easily, quickly and with little hassle. They’re used to supply chains that flow smoothly (mostly) and are willing to pay for next day delivery. They’re used to having what they want, when they want it for however much they want to pay for it.

As with the disinterested consumer, the consumer who’s in it for cost and convenience needs to be clear on what the circular economy can offer them. They need to be reassured that it’s a model that’s going to deliver (no pun intended). This applies to the cash-strapped consumer too. If the option’s available to them, most people will purchase a similar yet potentially less sustainable product elsewhere at a lower price, especially in the midst of a cost-of-living crisis where consumers are looking to cut their spending. Adopting a circular economy doesn’t necessarily mean that consumers will have less choice or, indeed, have to pay more for a product or wait longer for its delivery, but if they do, especially during the early years, it has to be made clear why that is the case and what the mitigating benefits are.

One of these benefits will be the quality and longevity of a product. Of course it’s unwise to pay too much for anything, but it’s also unwise to pay too little. Phrases your grandmother would use like ‘Buy once, buy better’ or ‘False economy’ can be persuasive here. Purchases need to be viewed as an investment; what’s the point in having convenience today but being inconvenienced in the future. It makes sense not to have to replace an item because the quality’s bad and it’s worn out or broken. 

It’s hard for any of us to put ourselves outside the present moment and a shift in mind-set though definitely needed, will take time. Much like exercise or a balanced diet, we might not see the advantages this week or even this year, but we’ll certainly witness them in the years to come. Short-term pain, long-term gain. Quality, longevity, durability should always factor into a consumer’s decision-making process and we need to redefine ‘cost’ to mean more than what’s on a price tag. It should also be measured in terms of cost to the environment, cost to the consumer if they have to replace it, cost based on usage (i.e., when an item can be used for decades). The fashion industry is a prime example of where cost per wear can demonstrate the true value of an item rather than its cost to purchase. Built-in obsolesce needs to be obsolete. We need to dispose of the disposable. Access over ownership for consumers (this article points out that consumers are already making the switch) and  manufacturers should also be prioritised, as should leasing or borrowing instead of buying.

Conclusion

There is much to be accomplished if we’re to rise to the challenge of establishing a circular economy and a corresponding global mindset. Whole supply chains need to be overhauled. Vast investment needs to be made in new machinery and raw materials. Innovative public, private and international partnerships need to be nurtured and assets deployed strategically so that solutions can be found to problems that are not easily tackled in isolation. Projects around the world have already demonstrated how successful this approach can be for overcoming challenges and making significant progress.

When it comes down to it, consumers will be a major component of the circular economy and research has shown that, already, around 72% are keen to play their part. But consumers will only play this part if they’re consistently given the opportunities to make choices that underpin circular processes and their buy-in will only happen if they’re trusted with the facts, however unpalatable or complicated. Governments, industries and companies must be bold, transparent and vulnerable, open about both their limitations and their requirements. Consumers need to be given the true picture so that they’re able discern empty promises from those that are real and topics that have previously been swept under the carpet as inconvenient truths must be destigmatised and dealt with head on. Then and only then will consumers be able to witness for themselves just how exciting a circular economy can truly be on an individual level, within their own communities, nationwide and internationally.

Instead of constantly telling consumers how they must consume less, use less and have less, there is now the possibility to create a new narrative which consigns the patronising tone and the guilt-inducing ‘use less buy less’ message of the doom and gloom laden linear model to history. Even in a circular economy, the old saying ‘The Customer is Always Right’ still holds true. Consumers need to know they are valued and that they’re getting value for money. Achieve these goals and circularity and sustainability will have a chance.