& Philips Personal Health
How could a circular service model convince consumers?
Shifting towards circular business models can be radical. Companies must develop new business ways, which come with new partnerships and capabilities. Is the customer even interested in this? Could hair removal a service help Philips transition to a circular business?
Challenging the system
In Value Proposition Co-creation sessions, we assumed that offering hair removal as a service could be a win-win-win for the consumer, the environment, and Philips. But to do that, we had to validate the most risky assumption: Would consumers prefer this in a dominant linear market? This included shifting to refurbished devices to make the business case work.
Experiments over meetings
One experiment is worth more than a thousand meetings. That is why we tested assumptions: to take steps forward through small experiments with low investments. In this case, we assumed we could convince prospective buyers with a circular service model and to continue we needed to understand what would make them tick and proof of sales. Later realizing that setting up these experiments would also bring us many more insights on what else was needed to make a circular service business model work: setting up a closed loop including reversed logistics, direct-to-consumer financing streams, and new e-commerce capabilities, to name a few.
Understanding consumers behaviour
Sellers of used Philips products on Marktplaats (a Dutch online second-hand market) were interviewed about their reasons for selling. Together with the product manager, we collected adoption barriers from prospective buyers. We invited interested buyers to join a pilot to collect even more insights. To build and test the circular customer experience in a closed community.
A role model
Philips has long been a frontrunner in sustainability. They engineer their products for the long run—in more ways than one. Philips Lumea is a role model because renting out Lumea IPL instead of buying extends its life and saves resources—which is better for our planet. This has benefits for the consumer as well—only using it when needed. It is only one way to create new value in a circular economy. Want to move over with your business?
