By Robert Goldrich

Working with JWT’s trendspotting group since 2006, Marian Berelowitz has helped to track cultural and technological trends around the world and what they mean for brands. As JWTIntelligence’s editorial director, she has formulated and written many of the team’s macro trends and explored developments in categories ranging from retail to food to mobile technology.

She steers content for JWTIntelligence.com and AnxietyIndex.com, and edits the group’s trend reports.

JWT’s trendspotting team has just released its latest trend report, “The Circular Economy,” which explores the revival of an alternative economic model that’s designed to reduce waste and is steadily gaining ground with major brands from Unilever to BMW to Philips and more.

The report highlights how brands need to reframe the customer relationship in order to become more cyclical. Companies will need to create ongoing relationships with users so as to keep their goods within the closed loop. The possibilities are numerous, including monitoring the quality of parts digitally; as Caterpillar does, creating financial incentives for the safe return of used goods. Several apparel retailers are also delving into circular prospects. And consumers are being given the means to easily repair or re-use goods.

Berelowitz discusses "The Circular Economy" and its implications for brands and the ad community:            

SHOOT: What are the key findings of “The Circular Economy”?

Berelowitz: In delving into this topic, we found that some of the world’s top corporate leaders are coming to see that the traditional linear business model must be reworked for 21st century realities. This idea of a more circular economy that designs out waste is being quite widely embraced: CEOs like Philips chief Frans van Houten, organizations like McKinsey and the World Economic Forum, and major brands like Ford, Puma and Dell are all among the notable names that are helping to push the concept into the mainstream.

Still, most of the companies we mention are as yet taking small steps in this direction, but I think we’ll see more and more efforts as businesses come to realize how important this idea is for long-term competitiveness and as consumers start to shift their mindset as well. There are many ways for brands to become more circular, and we’ll start seeing more creative thinking about how to go about it among executives—especially among sustainability-minded Millennials who are less wedded to the status quo.

SHOOT: Why are major brands embracing this alternative economic model?

Berelowitz: The linear economy that predominates now was built on the presumption of unlimited and cheap natural resources, and with little thought to where all our waste will go over the long term. The circular economy presents a more sustainable way to create, use and dispose of products that’s better for the planet but really driven by bottom-line considerations.

Commodity prices are spiking, we’re facing looming shortages of many natural resources, and it certainly makes more economic sense to find new uses for waste rather than pay to send it to landfills. And meanwhile, it doesn’t hurt if brands get good buzz for their efforts. Some of the concepts, like making better use of waste or remanufacturing used goods, are so practical and potentially profitable that it’s only surprising that more businesses aren’t already embracing them.

SHOOT: What are the prime lessons that the advertising/marketing community should take to heart (and strategic mind) relative to the circular economy?

Berelowitz: The circular economy represents a markedly different way of doing business, and companies must rethink everything from the way they design and manufacture products to their relationships with customers. For their part, consumers will need to adjust their habits and shed traditional ways of thinking about value, ownership and product use.

Marketing will need to help reformulate these customer relationships and help shift consumer thinking and behavior. For instance, in the circular economy, products are designed to be more durable and/or to be easily reused, upgraded and recycled—considerations that seldom play a big role in the purchase decision today. Circular goods that are leased or reusable may require a higher outlay initially but end up cheaper over the long term. Marketers will need to explain this embedded value to shoppers to focus on the cost of single-use products at point of sale.

SHOOT: What actions has JWT and its clientele taken in light of your trend report’s findings?

Berelowitz: I hope our report will help inspire novel ideas both internally and externally. Some of our clients are among the brands that are already taking action. Puma has started collecting used clothing in stores, some of which goes into making new items for its InCycle line of gear. They also created a line of shoes, Re-Cut, made from post-industrial scraps of denim. And then Ford has partnered with Coca-Cola and with H.J. Heinz on finding innovative uses for recycled plastic Coke bottles and for the tomato fibers that Heinz usually discards—the company is coming up with ways to turn all this into material for car components.

Ultimately, brands will need to adopt a new mindset, and smart agencies have a role to play in helping them shift gears.

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