For years, marketers have been helping to shape how consumers think and feel about products that are driving the linear economy. However in this episode of the Circular Economy Show, we explore how they can harness their skills to unlock the opportunities that the circular economy provides. This August on the Circular Economy Show, we’re revisiting four conversations that help to navigate the marketing challenges and opportunities of switching to a circular economy. So listen in if you want to learn how to take something from a good idea to something that actually sells.
For years, marketers have been helping to shape how consumers think and feel about products that are driving the linear economy. However in this episode of the Circular Economy Show, we explore how they can harness their skills to unlock the opportunities that the circular economy provides.
We’re joined by experts Deb Caldow, former Global Marketing Director at Diageo, and Rachel O’Reilly, Global Research Lead at Accenture Song. Their experiences provide an insight into how we can turn ideas into impactful actions that deliver both economic growth and environmental benefits.
Join us to find out:
This August on the Circular Economy Show, we’re revisiting four conversations that help to navigate the marketing challenges and opportunities of switching to a circular economy. So listen in if you want to learn how to take something from a good idea to something that actually sells.
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[00:00:00.000] - Rachel O'Reilly
There's a lack, and this is more broadly than just sustainability, in bold leadership at the moment. We are paralyzed by uncertainty.
[00:00:07.060] - Deb Caldow
What has helped us at Diageo get our heads around this, in particular, is to think about to fall in love with the problem, not the solution.
[00:00:16.080] - Pippa Shawley
Lots of circular ideas make it to pilot, but very few make it to scale. Why is that? What can marketers do about it? In the second part of our series, Exploring Marketing's Role in Scaling the Circular Economy, we're revisiting a conversation Fin had with Deb Caldow from Diageo and Rachel O'Reilly from Accenture.
[00:00:38.940] - Fin
We know there's real progress being made, but there's much more we can do to ensure that circularity is a core driver of business revenue. I wanted to start at the beginning and find out what role marketing teams can play in identifying the most commercially viable opportunities for their business. We'll start with you, Rachel.
[00:00:56.460] - Rachel O'Reilly
I think marketers, if I can be so bold, are one of the, if not the, driving forces behind sustainability. If you think about what marketers have always done, they've always convinced people of something to fall in love with. That's their job. I think when it comes to sustainability, suddenly we lose our minds because we stop thinking about that. We start going very technically, we think about risk and how we can suddenly convert people to do something they're not doing. If you ignore all that and go back to the basics, marketers are there to help sell stories, to talk about stories, and that's what sustainability is at its core. I think they're absolutely fundamental.
[00:01:34.920] - Fin
Nice. And, Deb, anything from you on that?
[00:01:36.820] - Deb Caldow
Yeah. I couldn't agree more that whilst it might not be obvious to most marketers at the moment, that actually there is a real role. It's about what you're talking about there, which is the ability to take a bit of a leap, help consumers take a bit of a leap, and also make things desirable. When we talk about circular solutions that are good for the planet, we also need for them to be desirable for consumers. That is what marketers should do by their very nature and apply it now to a big question with the world.
[00:02:08.830] - Fin
Inherently, by doing that, you get the benefits of fostering longer-term relationships with the brands, more points of sale. We've identified the opportunity. How do we then market those innovations? Rachel, if you could give us a consumer angle to that.
[00:02:24.320] - Rachel O'Reilly
I think what's been really interesting when we've been doing our research, and that's with people who are often left off out of the sustainability conversation, people are innately circular and sustainable in their behaviors. It's very innate to try and irculate crop rotations, for example. It's very innate to look after the things that we care about. I think it's starting there, not with sustainability or circularity or any of the technical terms, but what do we all care about as humans? We care about supporting the causes that matter. We care about caring for our futures, our children's futures. We care about resourcefulness and looking after what we have. For me, that's where you start, which plays right into a marketer's role.
[00:03:06.020] - Fin
That's really playing into what the consumer wants. Are you seeing a real appetite for circular propositions in the market at the moment?
[00:03:12.680] - Rachel O'Reilly
I think we often have this chicken and egg conversation around there's not enough appetite, prove the business case. I think it depends what you talk in terms of appeal or appetite. I think if you look at what's happening out in the world, people are already doing a lot of it, and there's a lot of success around things. Vinted is a very well trodden platform, but people aren't talking about that as a circularity or a sustainability initiative at all. I think there is appetite there. I think where we're getting hung up on is we're trying to understand that it's something different. We're trying to ask ourselves to measure it against something that we call sustainability when that's not how it's showing up in terms of keywords that people are talking about. It might actually look quite different to, I think, some of the key metrics we're looking for.
[00:03:59.030] - Rachel O'Reilly
I would say, yes, there's appetite. When you come to looking at traditional metrics for how we look at the business case for it, it looks very different, and therefore the adoption problem comes into play. From a consumer perspective, I'd say, yes, there's a lot of core interest.
[00:04:13.800] - Deb Caldow
I think what has helped us at Diageo get our heads around this in particular is to think about to fall in love with the problem, not the solution. That's a good practice with innovation, full stop. If the problem is a huge amount of food goes to waste, how do you redistribute it? The solution might be Olio, a crowdsourcing sharing platform. I think when we started to think about circularity, where we started was thinking about circularity. Very soon we thought, "Actually, this isn't about circularity." This is about, in our case, spirits, spirits that go in single-use bottles all around the world, and no one's ever challenged that.
[00:04:57.860] - Deb Caldow
If you've ever worked in a bar, you know the hassle of having to go downstairs in the middle of a service and get some new bottles when everything's run out. The problem that we fell in love with was replenishment of spirits in a pub. The solution has happened to be circular. Once we got our head around that, it helped us mobilize better internally. It helped us sell us better to consumers and customers alike. I would add to the consumer lens, which is, there are consumers that want to do it. There are also consumers that just want a better product that's more convenient and easier to use. Often, circularity can be the answer to that.
[00:05:34.720] - Rachel O'Reilly
I think it's a really important point because we have an obsession with segmenting consumers into those who are and aren't interested. We like to talk about those who we have to either convert or forget about, we don't know what to do with them, or the people who are the early adopters who we have to sell, sell, sell to. Then there's this middle where we go, I don't really know what to do with them. Actually, by falling in love with the problem, as Deborah says, you can take away all those assumptions around who is or isn't in the market for it and just look at what are people doing and loving right now and how do we cater for that in the best possible way. It's a refreshing approach to it, I think.
[00:06:11.750] - Fin
We're saying, forget circularity for a moment, that our innovation is actually solving a real problem, and the circularity aspect is something that hits home after. You talked a little bit about internal buy-in there, and we'll get onto that later. We talked a little bit about design there, too. Let's talk about now how important is cross-functional collaboration, bringing supply teams in, and also incorporating marketers early into this process. How important is that?
[00:06:38.480] - Deb Caldow
I'll maybe have a go at that one because I think that I've learned over the last few years of trying to scale circular solutions or even come up with them in the first place and then find a way to build them into our core business that I have never worked so closely with supply as a marketer as I have these days. Actually, our supply colleagues have for a while been thinking about how to make and move our products in a more sustainable, circular way.
[00:07:06.780] - Deb Caldow
What we have brought, I hope, to the party as marketeers is to think about solutions that aren't just the ones that are behind our operations, but actually a consumer might be interested in buying and selling. When you have a very efficient big business like Diageo, that's the world's leading spirits company, you have spent 200 years having a supply chain infrastructure that does what it does brilliantly. It sends bottles down a line in a factory that's highly efficient, highly cost-effective. What you're starting to do is you're starting to unravel that. That's where the initial, probably business, rejection can be. It could be seen as we're now having to completely rework how we do everything.
[00:07:51.360] - Deb Caldow
Actually, when you look at other things like costs of goods and glass, and in our case, glass is getting very expensive, you actually make it a much bigger conversation about how we're going to grow in a resilient way. Glass is getting really expensive. We could do with reusing the glass, but that is circulating. In answer to your question, the supply and demand sides of the businesses have to be inextricably linked. If you're going to start really having new business models internally, you better have your supply people and your procurement people, your marketeers, and your finance and everybody else all in the same place on it, because otherwise, you will hit issues when you come to scale.
[00:08:30.480] - Fin
Again, you're ensuring as well that the technical innovation actually matches the market demand. Ultimately, you're giving marketers a story they can work with. They know the product in and out. I don't know, Rachel, if there's anything in your work that speaks to that collaboration aspect.
[00:08:43.900] - Rachel O'Reilly
Yeah, it's so true what Deb's saying. I think as being a consultancy, you get that privileged position of watching lots of different firms grapple with this on the inside. Sometimes we're brought in by CMOs or marketing professionals who are struggling with consumer adoption. Sometimes it's from a sustainability perspective, and it's like, "Why can't we get momentum within the business?" Sometimes it's from a design perspective, but rarely, actually. What becomes clear every time is that it's being tackled at an incredibly siloed level, typically.
[00:09:14.820] - Rachel O'Reilly
I think sustainability teams have historically owned that work, but are now getting into a problem when it's going or attempting to go mass. Marketeers on the other side have an ambition to do it, but there tends to be less confidence or mandate sometimes. Rarely on these projects do you ever get those people coming in together because they're commissioned by a single stakeholder line, if you like. When we think about good old design and what we would have done when design thinking came into the mix way back when, that was all about bringing people together, cross-collaboration. That was what we heroed and what worked well. I think for some reason, when it comes to sustainability, we've lost that. It feels scary.
[00:09:54.060] - Deb Caldow
We think it's somebody else's job, don't we? Often you hear that, "That's a supply team's job." Or, "That's procurement." It's not a job for enter function name. I think that when you think about the value chain of how you make, move, and distribute products, we talk about widening your aperture, that camera lens zooming out and paying an interest. Marketeers, in particular, are used to thinking upwards to the world to the consumer. Rarely do they go down the other end, which is the factory end. I think once you do, though, there's plenty of opportunity to think about growth.
[00:10:29.460] - Deb Caldow
I think the other element of collaboration as well, which I think you might come on to, is around not just internally, but externally with partners. The thing about circularity is you need other players other than yourself working on it. You need the infrastructure, governments. You need things like waste collectors to work with you. It's not very sexy, but it's really important because you can make all effort as a business to have a circular solution. If the local council doesn't recognize it or anybody else that wants to be involved can't because they can't scale it up, then you're going to hit issues.
[00:11:08.820] - Deb Caldow
In our case, we realized we couldn't do it all on our own. Actually, we have a program where we work with startups that have got circular solutions, usually that have come from some data power. Actually, found out a lot of circularity is actually about data than it is about vessels and moving things around and refill. We're really fortunate to have worked with quite a few startups who we've been able to support to scale. ecoSPIRITS would be a great example of a business that had a vision 5 years ago, driven out of an individual who saw spirits bottle waste and decided to get ahead and do it. Now, that's just brilliant because businesses like ours need businesses like that, individuals like that, to come to crack the solution. What we can then do is help scale it.
[00:11:59.440] - Fin
You said it there. You've done a lot of work on the innovation. You've identified a real opportunity. That doesn't always translate to a successful business model.
[00:12:08.543] - Deb Caldow
No.
[00:12:09.020] - Fin
As I said earlier, internal buy-in is crucial to that. I'm wondering, in the case of Diageo and ecoSPIRITS, for example, what were those early internal conversations like?
[00:12:18.180] - Deb Caldow
My opening pitch to the business was, we've put beer in kegs for 250 years, the ultimate circular model. Yet, why have we not done that for spirits? We being the industry, we being Diageo. When you describe that, people go, "God, this is mad, actually, isn't it? We've never really thought about what happens to all those bottles once they've gone out of our warehouse." The first thing, we dramatized the problem and then talk about potential solutions. Of course, those solutions before they scale are probably not commercially viable. They will cost you more. They will be disruptive to your supply chain. There is a bit of a leap of faith there. That's why it's important to have everybody on board and skin in the game, if you like.
[00:13:06.260] - Fin
With marketers as well, they can, again, use their skills. You always get the advantage, perhaps economically, it wasn't fruitful to start with, but you get that industry first. You come from that angle, I suppose. We talked a lot in the intro, and we've looked at success stories. We've obviously spoken about Vinted, but ultimately, we're not reaching the scale that we need to transform the economy. Rachel, to bring you in here, what do you think the main barriers are or the blockers as to why we're not reaching the scale we need to for circular propositions?
[00:13:36.800] - Rachel O'Reilly
Big question. I think we're in pilot purgatory at the moment. I think we see a lack of investment and support in giving it a go because of all of the risk adversity around it. For marketers, it's particularly pertinent because of the fears of greenwashing. Sounds old, but it's still true. I think there's a lack, and this is more broadly than just sustainability, in bold leadership at the moment. We are paralyzed by uncertainty. Look at the current world, and I think that means that you need that CMO, that CEO, that CFO to take a bet. At the moment in the current climate, we're not taking any bets. We're not making any decisions. I think that's something that's hindering sustainability more broadly as well.
[00:14:19.840] - Rachel O'Reilly
In terms of the other point, it's the ability to operationalize. To Deb's point around supply chain, bringing everyone together. There's a lack of ability or readiness to do that as well in terms of the implementation side of things, metrics being a key part to that. We've got to be able to measure something other than immediate ROI because it's not going to happen. We're not set up to that, and it's terrifying for businesses, particularly in a moment when we need to make money. Again, it's all of the old challenges to scale, I think. A combination of where we are at the moment and the sustainability topic just exasperates it.
[00:14:54.920] - Fin
Amazing. Deb, anything to add on that point?
[00:14:57.100] - Deb Caldow
No. I'm just listening to you thinking, "Yes." That's exactly what's going on inside businesses. Then I suppose the question that leads on from that is what can people from within businesses that are supporting businesses like ours do within that? I think storytelling is what I'm finding is really powerful to give those examples of where it's been challenging and how we've overcome it: a permission to have an experimentation budget and give it a go.
[00:15:27.720] - Deb Caldow
In the circularity solutions that we're looking at, we've got different KPIs than we'd normally have with innovation. They are different. Actually, they're timed on a slightly different horizon as well. In the beginning, it's, "Does it work? Does it actually work? Can we operationalize it?" Later on, we will look at, "Will it make money? Will a customer want it?" We just think a bit differently about the choreography of what we're trying to prove out than we would with a normal consumer-focused innovation because I think it is slightly different. It's all the same discipline, making sure it's feasible, viable, sustainable, and desirable. There are four lenses, but you have to choreograph it in a slightly different order because you're not going to get all of that answers up front.
[00:16:14.980] - Fin
Okay, nice. We've had four lenses from Deb. Rachel, I don't know about you, but have you got one action that marketers could take today in their practices to move forward with this?
[00:16:26.100] - Rachel O'Reilly
Maybe controversially, I'd say start with you. Find your route to sustainability, because if you can't connect to that, then we don't stand a chance. I would ask ourselves, why are we doing it? It can be as simple as, "I want to make a legacy for myself within the job." It doesn't have to be eco-warrior territory. I think if we keep separating sustainability in the workforce and workplace from our own personal lives, we're going to keep coming up to this point where we work in sustainability for years but still have the consumption issues at home. I think breaking down those barriers between employer, consumer, CEO, CEO's children, would be really helpful. I'd start there.
[00:17:05.210] - Pippa Shawley
Getting a business behind circular solutions is one thing. Getting customers to actually choose them is another. Join us next week when Georgie Rose from Selfridges and Simon Davies from Visa share what happened when they ran a live behavioral experiment on the shop floor to find out. If you found this episode useful, please do share it on LinkedIn. It really helps others find it. Thanks for listening. We'll see you next time.