Consumer Behaviour is Key to Developing a Circular Economy
Significant changes in consumer behaviour are required to achieve a successful transition to a circular economy. A recent paper published by Exeter Center for Circular Economy and business consulting firm Clarasys emphasises the critical role that consumer behaviour plays in reducing resource use and waste. In order to make the switch to a circular economy, businesses will need to do more than just develop new circular products and services. They will need to make significant efforts to alter consumer behaviour in order for consumers to correctly and effectively adopt sustainable products and services.
To transition to circular business models, companies will need to not only satisfy their customers’ needs, especially in terms of quality, price, convenience, identity, and trust, but they will also need to take into account concerns like hygiene and contamination of used products, language and communication used to market new offerings, and the level of circular economy skills necessary to maintain products for longer.
Only around 10% of peer-reviewed articles on circular economy emphasise "consumption", "customers" or "users". Academics have previously suggested that an increased attention to the customer experience is the key to businesses successfully integrating circular business models. They have further illustrated what a B2C customer journey of the future would entail by contrasting conventional "take-make-waste" linear customer journeys with circular ones. An effective implementation of circular business model must consider elements such as circular design principles, mindful consumption focused on needs, community-based consumption, and a greater focus on affordability to ensure products are accessible to all.
In Europe, policymakers are becoming more aware of the importance of encouraging consumers to make decisions that are more environmentally friendly while still respecting their freedom of choice. Despite improvements in resource efficiency, policies addressing production and consumption systems are often insufficient to respond to the rising demand for resources. To create effective consumer policies, it is necessary to have a thorough understanding of the elements influencing consumer behaviour. Below are some of these elements:
Include pricing and other related costs and income. An additional factor to consider is how the consumer values the present and future cost and benefit.
This includes the information that is available to consumers and how they comprehend it. If consumers are able to understand the positive impact that circular products have, it will help them make more informed choices when purchasing products.
This includes analysing if the product fulfils consumers’ needs. The product must cover factors such as availability, quality and performance.
Policymakers argue that it is challenging to alter societal aspects, individual views, and attitudes through the use of policy tools. Through long-term strategies and methods such as advertising or social media influencing, private sector marketing strategies work to modify these variables, frequently advocating linear product systems. By creating mechanisms for policymaking that specifically target these issues or by limiting the impact of marketing campaigns promoting linear items, policymakers may be able to have an impact on these factors and create behavioural change towards a circular economy mindset.
Depending on the type of policy instrument and extent of consumer choice involvement, different consumer behaviour nudging possibilities can be investigated (e.g. from simple information provision to restrictions and bans). A policy effort must clearly link the proposed measure to the causes in order to be effective.