How can businesses sell circular propositions in a world that's rapidly changing? This episode of the Circular Economy Show tackles the marketing challenges and opportunities head-on. Pippa sits down with Jonathan Hall, Managing Partner at Kantar’s Sustainable Transformation Practice, and Amanda Gandolpho, former Head of Brands at bike subscription service Swapfiets, to explore how to connect with today's consumers and drive demand for circular products and services.
How can businesses sell circular propositions in a world that's rapidly changing? This episode of the Circular Economy Show tackles the marketing challenges and opportunities head-on. Pippa sits down with Jonathan Hall, Managing Partner at Kantar’s Sustainable Transformation Practice, and Amanda Gandolpho, former Head of Brands at bike subscription service Swapfiets, to explore how to connect with today's consumers and drive demand for circular products and services.
In this episode you'll discover:
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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[00:00:00.260] - Jonathan Hall
85% of people want to live a more sustainable lifestyle, 29% actually follow through.
[00:00:04.810] - Amanda Gandolpho
We are a circular business in our core, but that is not the thing that we are communicating, or it's not the thing that we're leading with. We are truly leading with convenience.
[00:00:17.780] - Pippa
We spend a lot of time talking about circular products and business models. We spend a lot less time talking about how you actually get people to want them. I'm Pippa, and over the next month, I'm resharing four conversations based around the Ellen MacArthur Foundation's Marketing Playbook for a Circular Economy, helping to navigate the marketing challenges and opportunities of switching to a circular economy.
[00:00:41.100] - Pippa
This week, Jonathan Hall from Kantar's Sustainable Transformation Practice, and Amanda Gandolpho, former Brand and Creative Director at Swapfiets, joined me to explore how to actually drive demand for those products and business models. Jonathan, can you start by telling us what drives consumer demand for circular products? Do the consumers know they want these things?
[00:01:05.080] - Jonathan Hall
Wow, good question. I guess you need to take a step back if we're thinking about the consumer perspective on circular economy and circular products. I'd literally go back as far as thinking about the values that really define society and have defined society since the post-war, post-Second World War period, because those are things which you can ladder back up to things like circular products as manifestations of what we see in culture. I think if you think about these things in terms of generational theory, we're going through a pivot at the moment, which we've only seen the like of that once before in the last 130 years.
[00:01:51.860] - Jonathan Hall
That was after the Second World War, when we saw a shift from institutionalism, which defined the pre-war era, to individualism. That was driven by the boomers. It was manifested in brands like Levi's and Harley-Davidson and Marlboro, and they really rode that wave. Now, we're going through a transition from individualism into something which we call mutualism. Now, there will be lots of pushback. There always are in terms of when there's fundamental change, and we're seeing that, but the trend lines are clear. Now, circular economy is very much a part of that value shift, and people will be looking to products, and services, and experiences, and brand owners to help them transition.
[00:02:41.800] - Jonathan Hall
They may not see these things as circular themselves, they may not even know what circular is. But the point is, they're buying into the benefits and the propositions which the circular economy represents. One final point here, I would say, is that it's late millennials and Gen Z who are in particular embracing this value shift. They're the biggest cohorts that we've ever seen. They're obviously the future. They're defining the emerging economies. We're going to see a wealth transfer of $84.4 trillion from boomers to those generations by 2045 in the US alone.
[00:03:19.140] - Pippa
Wow. That's a huge economic opportunity there. Amanda, Swapfiets, can you tell us about it? Because it feels like it's hitting a lot of those points that Jonathan just mentioned.
[00:03:30.990] - Amanda Gandolpho
Of course. Swapfiets is the first bike subscription company ever. We founded a new category. Essentially, what we offer is bike as a service. We have identified, this was almost 10 years ago, actually, that biking is a big hassle. Whenever you have to bike, you need to take care of your own repairs, maintenance, let alone if your bike gets stolen. Of course, as a shift onto a more sustainable way of just getting around in the cities, we all want to promote cycling, but now there was just this hassle on people's lives and a barrier to start.
[00:04:15.060] - Amanda Gandolpho
We exist to take the hassle away from biking. We exist to bring worry-free biking to everyone. The idea is quite simple. You have your own bike, you pay per month, and we take care of the rest. If you need any repair or maintenance, if your bike is stolen, we take care of it. I think what we realize we're actually doing is promoting more livable cities by doing that. The more we take the hassle away from biking, the more people are encouraged to cycle, the more our cities get livable. We also see that we encourage a lot of people to start cycling as a result.
[00:04:57.340] - Amanda Gandolpho
We started in the Netherlands. We are very famous here, but we have already expanded to seven other countries, including London, in the UK, France, Denmark, Germany, and so forth. In markets where cycling is not commonplace, this is where our service is even more important because we take people by the hand, we explain all they need to know about a bike, and so forth. This is where we see a massive opportunity for growth.
[00:05:30.000] - Amanda Gandolpho
It's interesting because we are a circular business in our core, but that is not the thing that we are communicating, or it's not the thing that we're leading with. We are truly leading with convenience and what people want in their lives, which is cycle without worries.
[00:05:46.780] - Pippa
With those different geographies you're talking about there, are there also different marketing needs? Because I imagine in Amsterdam, you're doing less convincing of trying to get non-cyclists cycling, but in London, it's not inherent to the way of living there at the moment. How do you adapt to that?
[00:06:04.640] - Amanda Gandolpho
Interesting question. At first, of course, we are a scale-up. It's not that we have all the resources and marketing teams everywhere to think it through every step. But one of the things that we realize, its core is indeed the convenience and the worry-free part of it. If you are in a market where people are cycling already, you do know of the hassle, so you want convenience. That's the case in the Netherlands.
[00:06:30.280] - Amanda Gandolpho
If you are in a market where you don't know how to cycle, you also want convenience because you just want someone to take you by the hand. In the end, the core human value, let's say, or need that we are addressing, it's quite similar in a way, and we do tailored communication, so people feel, for example, in London, you could tell that they want to feel more confident as they cycle. That's something that we cater to, depending on the market.
[00:06:56.320] - Pippa
Jonathan, a brand like Swapfiets, it does have that inherent circularity to it. What about other brands? Where are the blockers? When does marketing step in to that whole ecosystem?
[00:07:11.160] - Jonathan Hall
Yeah. How long have we got? There are so many blockers, I think, that marketers experience, and they're both external and internal. I think the two big external ones that we should talk about: one is the value-action gap, which many listeners will be very familiar with. The gap between people's stated values and beliefs and their actual actions. In our latest work, the gap there is 85% of people want to live a more sustainable lifestyle, 29% actually follow through. We've still got a gap which is as substantial as it has been for the last two decades, so that's a real issue.
[00:07:49.980] - Jonathan Hall
The second one is all about greenwashing. We have an increasing perception of greenwashing on the part of consumers. Again, latest work of ours, 56% of people think that they've been misled with regard to sustainability issues by brands. That is across all sectors across the world. It varies slightly, but still, you've got a huge erosion of trust there. So two big blockers there for marketers to overcome.
[00:08:16.200] - Jonathan Hall
Internally, you have marketers who feel that they don't feel confident. Their awareness of issues is low, the capability that they feel is low. They don't feel competent to actually address these issues from a marketing perspective. They don't really know what circularity implies for them. There are also issues that they have to address with regard to the perceptions of cost. So internally, people think that circular products cost more money, and that's also a major issue for them.
[00:08:54.640] - Jonathan Hall
I think we also see that when issues aren't hardwired into people's KPIs, then they don't do things. Again, if a CMO is trying to effect change within the marketing discipline, but then those brand managers across the world, in Brazil or wherever, don't actually have it in their metrics, then it's going to be difficult to move. In fact, work that we did with the World Federation of Advertisers, in a report called Sustainable Marketing 2030, we looked at barriers, and the top seven barriers for marketers were all internal. Amazing.
[00:09:30.940] - Pippa
What things are you hearing? Is it that thing around cost and not understanding it, or are there other things that play in as well?
[00:09:39.560] - Jonathan Hall
Yeah, exactly. Overcoming those perceptions of cost. I think that sense of capability and being able to address that in a way that's competent. People are struggling to know where to start. They need a lot of help.
[00:09:52.920] - Pippa
Yeah. I imagine there are marketers listening to this episode thinking, yeah, this sounds like my problem.
[00:09:57.880] - Jonathan Hall
Nodding their heads, I'm sure.
[00:09:58.630] - Pippa
What solutions do you have for them? Where is that opportunity to drive this demand for circular products?
[00:10:05.080] - Jonathan Hall
I think the many marketers, because if you think about the core skills that marketing has, it's really about proximity to the consumer. It's then being able to think about how do I influence the value chain to be able to deliver products and services which meet those consumer demands in the optimal way. There are obviously issues around differentiation within those products. I think that's what they understand. I think if you can start to frame circularity in those terms and connect the intersecting circles of circularity and marketing, as we've done on the playbook that we've collaborated on, then I think there's a way through.
[00:10:52.300] - Pippa
Amanda, I wonder if any of that chimes with you, or if being-
[00:10:55.550] - Amanda Gandolpho
I have all these issues, Jonathan. No, I think I can speak a bit to it. Prior to my role at Swapfiets, I was at Unilever for more than 7 years, and I went through shaping a purpose-driven brand, Hellmann's, from scratch. From when Hellmann's was just a hamburger sauce, sauce for hamburgers, until crafting the Make Taste Not Waste global proposition for the brand, including Super Bowl commercials, and so forth.
[00:11:23.720] - Amanda Gandolpho
I think one of the big things I take with me, and I would encourage to every marketer, is for you to provide a great solution for your customer, you need to fall in love with the problem. It was really when we stepped into the shoes of people, and back then it was about food waste, for example. We were like, how can we market a food brand and relate that to waste? Isn't that unsexy? Isn't that unappealing? What are we doing? We want to solve a problem in their lives, but how exactly does the brand fit? And so forth.
[00:12:00.080] - Amanda Gandolpho
One of the things we did realize back then is that people in their homes, they have a major problem with managing their food. You start your week with the best of intentions, but then midweek… you buy a lot of salad and vegetables, and midweek, it all goes to waste. No one of us wants to do that. It's the same in other categories. We all have great intentions, but then life gets in the way, and that's where you see the say-and-do gap. What we realized is like, can we create a tool, or a campaign, or a behavior change program—which is what we did back then—to also help these families, not only because of the sake of food, but also use their most wasted ingredients in order to make delicious meals? Then this is where Hellmann's back then could step in.
[00:12:44.220] - Amanda Gandolpho
I think it all started with falling in love with the problem of food waste and with the problem that families face when managing food in their homes. Same thing for Swapfiets. For us to craft the proposition, it was all about falling in love with the hassle of cycling, understanding how people perceive it, and then we can craft a great solution for them. Of course, when you're marketing any solution or any product, you're not marketing, "Buy this because it's sustainable." We need to make this a win-win.
[00:13:21.180] - Amanda Gandolpho
I see a lot of… A challenge that marketers have, especially in big companies, where they're like, "Let's try to be sustainable now." Then they create this one little product, or this one little category, that no one cares about. It's margin-decretive for the company, and we don't have enough money because we need to sustain the core. Then they are fighting and putting a lot of resources into that, only to, after 6 months, it's the first item in the list to be cut.
[00:13:45.740] - Amanda Gandolpho
I am a big fan of making it a triple win. A win for the society and for customers that get more value out of this. A win for the company that get higher margins and is able to move towards the right thing. Of course, for the environment as well, as we all end up winning. I think, especially, for example, when you talk about, I think we spoke earlier today about refills.
[00:14:12.260] - Amanda Gandolpho
Back in the day, in Brazil, in the personal care category. I've also been through that, and we're like, "Let's move to refills because that is more sustainable." Guys, we have a major economic crisis. People are moving into refills and getting bothered to change from a package into another package and dealing with that... It's not a perfect plastic package that you just pump, and it's beautiful.
[00:14:38.040] - Amanda Gandolpho
I don't know if you've ever used refill, it's a bit messy. But people are willing to go through that because it's much more value for them. This is how they're going to keep using their favorite soap and giving that to their family with the beautiful fragrance that they love. This is what we're marketing, and this is where big transformation in sustainable packaging or in sustainable practices, this is where I believe that is.
[00:15:02.340] - Pippa
Do you think that's what helps address that think-do gap that you were talking about, Jonathan, where you're not focusing on this big sustainability green story, which also has this risk of petering out or being greenwash-y, it's meeting the user needs for whatever, regardless of whether it's circular or not?
[00:15:25.440] - Jonathan Hall
Do you want to go first?
[00:15:30.440] - Amanda Gandolpho
I think companies should not try to embed sustainability or circularity because they want to sell more. They should be doing it because it's the right thing. It is probably better for their economics and for the margin of products, depending on how you do it. I think people want to be presented with a choice. If you have two products, they both address your needs in an equal way, and one—cherry on the cake—it's more sustainable, then the choice is obvious. But if we're going to make our customers choose, "Hey, this is more sustainable. But this is more flashy and beautiful, and it's actually the same price," then we're putting our people in a very difficult position. This is where the mismatch happens between what they say they would do and what they actually do, which is to buy the flashy one.
[00:16:22.440] - Pippa
Do you agree with that, Jonathan?
[00:16:23.930] - Jonathan Hall
Yeah, I think what Amanda said, both points there. For me, how you position circular products effectively, which I think there's a what and there's a how to it. I think the what is about you need to think about benefit-led propositions, which is exactly what Amanda has been describing in Swapfiets and when you're at Unilever as well. I think if you look at the marketplace for circular products and services, and broadly for sustainability, the mistake that marketers keep making is for so long, been working with their colleagues up the value chain to create something which is more sustainable because they want to do the right thing. But actually, then they make the mistake of putting that proposition in the foreground of what the product or service is in the marketplace.
[00:17:13.040] - Jonathan Hall
The reality is that we, as consumers, we buy those products and services. It's very well-documented that there are certain category drivers that we're looking for, and they'll be to do with taste, or quality, or performance, or whatever it is according to the sector or category. Now, they don't go away just because you're buying a circular or sustainable product. You're still looking for those things.
[00:17:38.680] - Jonathan Hall
There are, of course, certain segments of consumers. We're probably those types who will try things more than others. But we're still going to come back to products and services that actually deliver what we expect them to. Now, the trick is developing circular products which actually are circular. They are better for people, they're better for planet, but they also at least deliver parity, or ideally, they outperform existing products and services in the marketplace. I think from a what perspective, that's what you absolutely need to do.
[00:18:15.460] - Jonathan Hall
You can pick off those behavioral barriers in the say-do or value-action gap as well, because they're easily documentable. You can do some research. You'll know that's to do with price, or convenience, or cost, or performance, whatever it is. You can pick those off. But I think the how is often forgotten as well. At Kantar, we have the world's biggest communications evaluation database. What we've done is we've gone back over the last 10 years, looked at all of the ads we have—60,000 ads a year, whatever it is—and looked at those where there is either an environmental or a social component within that ad.
[00:18:54.680] - Jonathan Hall
What you find is that the ads which are most effective are the ones which actually leave people feeling inspired, leave people feeling, I can actually do something about this, actually give people a sense of that being a solution. Because if you leave them feeling downhearted or guilty, then you're not going to change behavior.
[00:19:15.890] - Pippa
Yeah, you can't shame people into shopping more sustainably. We don't have much time left, but we've talked a lot about buying things, buying stuff. Something we're talking more and more about in the circular economy space is circular business models where we've got rental, resale, those things. And Swapfiets is a Product-as-a-Service. How do you market something when somebody could be like, "I could just go and buy a bike," how do you fight against that and win people around to having a Product-as-a-Service instead?
[00:19:50.760] - Amanda Gandolpho
Interesting question. That's really my day-to-day. I think one of the things we need to get clear at, and I really like to talk about no-bullshit marketing, which is like, when I arrived, I remember that our founders and in general, people in Swapfiets, we're all passionate about bikes. Sometimes, I would see meetings where people would be discussing the specs of the bike and how the bike is. I was like, "Guys, let's get clear about who our audience is."
[00:20:20.410] - Pippa
It's not the Tour de France.
[00:20:21.760] - Amanda Gandolpho
It's not the Tour de France. If you would love bikes, you would probably get your own bike, surprise, with all the specs that you want, in the color that you want. People that come for Swapfiets, most of them, I cannot speak to all of them, but most of them don't care about the bike. They care about going from A to B, and that's a very important distinction. If someone is comparing our product to a new product, for example, and I must say our product is extremely high quality, so I could still make that comparison, but as it breaks down much less than the rest. That's an interesting thing about Swapfiets. We say that we are the only bike company that doesn't want our bikes to break because we keep it in the value chain as long as possible.
[00:21:11.310] - Amanda Gandolpho
Once a bike is returned, we repair it, we use it, recycle it if it's needed, and then we give it to the next member. So it's in our best interest to learn from every bike and every repair to make sure the bikes break as little as possible, which goes a bit against us, because people are like, they stay with us for one year, their bike doesn't break. They're always on the move. Then after one year paying the service, they're like, "Why do I need them again? Okay, I'm just going to return this bike," and so forth.
[00:21:39.680] - Amanda Gandolpho
Anyways, but it's very interesting because once you get clear on who your audience is, you really double down on the convenience, the service. You reassure them that the product is high quality, that it's not because... That's a barrier that we have in the second-hand, resale, reuse, repair, or subscription-based. When it comes to products, people are like, "It's a rental, so it's not good." It is great, and we make sure it's great. I would say that reassuring people on quality, reassuring people that we've got what they need, and they can have peace of mind, which speaks to Jonathan's point about we want people to feel something. We want them to feel worry-free.
[00:22:23.770] - Amanda Gandolpho
In our communication, it's not only about saying, "Hey, it's cheaper to get a Swapfiets than to get this," or, "The bike is good," no, it's about the worry-free feeling to cycle with all your problems taken care of. You might have problems in your life, but not on Swapfiets.
[00:22:39.280] - Pippa
I love that. That's a strong line.
[00:22:41.390] - Jonathan Hall
That's a great line.
[00:22:43.040] - Amanda Gandolpho
I might use it for my next campaign. Let's see.
[00:22:45.900] - Pippa
It's selling the idea that if your bike breaks down, that's not your problem at Swapfiets.
[00:22:50.760] - Amanda Gandolpho
Exactly.
[00:22:51.550] - Pippa
I love that.
[00:22:52.250] - Amanda Gandolpho
It's almost like when you are in a situationship that you don't really need to commit to it. It's like the no-commitment bike. That resonates well with Gen Z as well. Sorry, not Gen Z, with everyone.
[00:23:07.180] - Pippa
We are running out of time here, sadly. But I wanted to know if you have something to share with marketers listening as a quick action or maybe something to think about whilst they're cycling to work or going about their lives. Jonathan, can I start with you?
[00:23:21.820] - Jonathan Hall
Sure. I think one of the things that marketers struggle with regard to circular economy, once they've got their heads around it, is how do I sell it internally? I think what we talk about to the marketing community is a lot of those people that you need to convince don't buy the moral argument, or they aren't necessarily prioritizing it. I think framing the conversation as a value argument for both short and long term is the way that you need to think about it. Those are the rules of the game that we know.
[00:23:58.640] - Jonathan Hall
I think if you go back to the playbook that we've worked on together, we identify key levers there that we can employ. I think there are very strong evidence of brand growth. It's all about building resilience into the business model. You can talk about cost savings and efficiencies. You can talk about competitive advantage, and you can talk about an improved customer experience, as Amanda has been describing with regard to Swapfiets as well. It reimagines how you relate to the consumer, and it gives you a lot more points of contact.
[00:24:33.660] - Pippa
Yeah, a whole menu to go off. Amanda, what would you say is your final point for your fellow marketers?
[00:24:42.240] - Amanda Gandolpho
I think for me, it's make people feel something. Whenever you're thinking about your proposition, the value, what you're communicating, and especially your campaign, which is a consumer-facing final line, because we know a lot of work goes into those campaigns and those products. But in the end, people get one thing, one line, one feeling out of all that work. If you're not feeling it when you're doing, probably your consumer will not feel it either.
[00:25:11.260] - Amanda Gandolpho
Sometimes, especially when we talk about complex subjects, either circular or sustainability, or even explain a subscription model to someone who doesn't know about it. If you yourself, or you're trying to far-fetch, or you're trying to make it work, and too many things into there, probably in the other end, it will not be well-received or people will not really get it. Sometimes, an image or a video will speak a thousand words.
[00:25:42.260] - Pippa
Driving demand is one thing. Getting your business to actually build and scale the solutions is another. Join us next week when Deb Caldow from Diageo and Rachel O'Reilly from Accenture get into exactly that.
[00:25:54.460] - Pippa
If you found this episode useful, please do share it on LinkedIn. It helps others find it. Thanks for listening. We'll see you next time.