For many retailers, circular thinking involves redefining products – and the raw materials contained within them – as assets that need to be kept in circulation for as long as possible. During each use phase, these assets may need to be reintroduced into different markets, requiring new customer relationships to be built.
One business leader that recognises the scale of this challenge is Mike Barry, director of sustainable business at Marks & Spencer (M&S). He sees the retailer-consumer relationship profoundly changing in the next 10 years, as companies including his become more adept at offering products that can deliver a much richer customer experience.
He points to asset tracking and the concept of material passports as an example. In the future, if all three billion products that M&S sells could be asset-tracked during their lifecycle and across multiple use phases, this could not only improve the recovery and reuse of these products and their constituent parts, but empower users to become engaged circular citizens in their own right.
QR codes would enable consumer goods to tell their own stories, Barry says, enabling people to learn more about where the raw materials in a product were sourced from, how the product was made, who made it and what social benefit it delivered along the way.
“Let’s look at this through the customer’s eyes … you can tell a much richer, deeper story,” he told Sustainable Brands in a recent interview. “The turning point for the customer is that they can see the economic value of what they’ve bought.”
So, if a customer purchased a quality suit from M&S and no longer had a use for it, he or she may be able to access its resale value from the data contained within that suit.
“So, you will now become the owner of assets that you can resell,” Barry explained. “It allows the customer to become the marketplace and will drive the circularisation of the economy, which is just too difficult to do at the moment.”
According to Barry, for a circular economy to work, it needs scalable solutions like this – particularly for big retailers such as M&S, which operate in the consumer space.
“I think there’s been a lot of success in the B2B marketplace with new, circular business models. When you’re dealing with the millions of people who shop at M&S, all of whom have got a passion for planet and people – but wildly different understandings of what that means – it’s very difficult to launch a scale model.”
He adds: “It has to offer value to the participant. It’s got to feel right for the planet, but it’s got to feel right for you, as well. New technology allows you to both give a monetary value to what you buy, and an emotional value to what you buy. Different people will respond in different ways, but the point is, the technology will be the enabler to tell that emotional story [of a product] and extract the functional value from it as well very easily.”
Earlier this year, M&S announced the next phase of its Plan A journey. Critical to this is the incorporation of a new, approved science-based target (SBT) to reduce Scope 1 and 2 greenhouse gas emissions 80 percent by 2030 below 2007 levels, with a longer-term vision to achieve 90 percent absolute emissions reductions by 2035, below 2007 levels. The company has also committed to reduce Scope 3 emissions by 13.3 MtCO2e between 2017 and 2030.
Asked how the SBT might impact on the company’s transition towards greater circularity, Barry replies: “It’s a really good question. When we started Plan A ten years ago, we had 29 individual climate-related targets, all big and bold in their own right, but in silos. What a science-based target allows us to do is link them all up. It brings a much more holistic pathway for the existing stuff we’re doing to the low-carbon M&S of the future, which will be radically different from today.”
Barry remains confident that there is a clear business case for going circular, but says in the context of a global retailer such as M&S, it’s about capturing that business case not just internally, but across the supply chain as well – for the thousands of locations in which it operates. Frameworks such as the company’s Sustainable Factory Programme offer a clear pathway in this respect.
Looking ahead, Barry believes much of the work will be around optimising processes and applying more scientific thinking, but adds that there are some heart and mind challenges ahead.
“There is a really rich discussion here about how science meets emotion in order to take people with us on this journey,” he said. “You’ve got to emotionally engage across your whole value chain, it will be a real factor in defining business success in the future.”