Sustainable business model archetypes are groupings of mechanisms and solutions that contribute to building up the business model for sustainability. We developed these as part of collaborative research to develop a common language that can be used to accelerate the development of sustainable business models in research and practice. The sustainable business model archetypes are:
- Maximise material and energy efficiency;
- Create value from ‘waste’;
- Substitute with renewables and natural processes;
- Deliver functionality rather than ownership;
- Adopt a stewardship role;
- Encourage sufficiency;
- Re-purpose the business for society/environment;
- Develop scale-up solutions.
The “Encourage sufficiency” sustainable business model archetype for example is about solutions that actively seek to reduce consumption and production. The focus is on customer relations and influencing consumption behaviour, product design for durability, a fundamental shift in promotion and sales (e.g. no overselling) and supplier selection based on durability. Profitability would typically result from premium pricing, customer loyalty, and gaining market share from better (e.g. longer lasting) products. Societal and environmental benefits of sufficiency-based business models include reuse of products and resources across generations, reductions in product use, and societal education (Bocken et al., in press).
In the clothing industry, the Common Threads Initiative by Patagonia is a good example of ‘sufficiency’. The company pledges to ‘build useful things that last, to repair what breaks and recycle what comes to the end of its useful life’, whereas customers in return are asked to pledge to only but what is needed and will last, make repairs and reuse (share) what is no longer needed and recycle anything else. Patagonia also asks customers to “Not Buy” their jackets, trying to make them aware of the effects of their purchases and encourage them to make things last rather than buying new. However this may have the same effect as asking people not to think of a pink elephant… yes, more purchases!
Clothing swaps, where you come together with friends and swap clothes you no longer wear, are a fun way to freshen up your wardrobe without having to buy something new. It makes use of the ‘resources’ we have in the back of our wardrobes. This also encourages reuse of resources rather than new sales. A specific initiative by M&S encourages its customers to ‘shwop’: to donate clothes to charity through collection bins placed in their stores. In return, customers receive discount vouchers for M&S. Although shwopping encourages customers to have a critical look at their wardrobes and give unwanted items to charity, it does not encourage fewer sales, it may even encourage more by generating traffic to the store.
In the furniture industry, Vitsoe is an interesting example of ‘sufficiency’. Vitsoe has created a video, which shares vision against planned obsolescence – ‘the design and manufacture of products that are deliberately intended to have a limited useful life’ –, which results in an endless cycle of replacement and repurchasing. Vitsoe’s design is aimed to be timeless and durable and its 606 shelving system is still compatible with its first system decades ago. Vitsoe does not give discounts and employees do not receive sales commissions. Vitsoe seeks to provide customers with furniture solutions that ‘do more with less’.
How can a business still make money if it sells less? Neither Vitsoe nor Patagonia is on the lower end of the price spectrum – on the contrary. Their products are premium-priced but they believe in good customer service. Vitsoe for example helps customers reinstall its shelves when they move home. Patagonia supports repair of its products. The proverb “I am not rich enough to buy cheap things!” applies here.
Although the number of sufficiency-based business models is not yet overwhelming, the concept of making products that last and are repairable is not new and there is an opportunity to make it stylish again to make stuff last. In the fashion industry there are several emerging business models such as Mud Jeans who have combined a sufficiency-based idea with leasing, or the ‘deliver functionality, not ownership’ archetype discussed in the next blog. What interesting sustainable business model innovation-combination will be next?
This blog is based on the following article: