How brands are rethinking value creation

In my last article I wrote about how supply chain challenges are driving brands to think differently about how they deliver to customers by, and it may sound surprising, considering the cost of delivery from end-to-end. In other words from raw materials to the customer.

As I also wrote last time, this does represent significant opportunity for brands to break new ground, especially in their quest to balance affordability and sustainability where ultimately, customers will weigh up the need for their families’ basic necessity and the impact these needs have on the planet. Understanding this balance will form part of brands growth in the near and medium term future. Brands will be shifting their focus from consistently creating ‘new’ and by doing so, increasing the impact and pressure on supply chains and the environment to having a focus on extending a products life-cycle through incremental upgrades.

This has always been something that seemed so obvious to me, especially when I look at the behaviour of younger people who balance their attraction to high-end brands and their struggle to justify investing in the same. This desire, balanced with simple, old-fashioned business nouse has lead to a plethora of clothing rental businesses appearing where the life-cycle of goods is extended and value is created. Interestingly, this development has not been missed by many of the world’s leading fashion houses who are partnering with retailers to offer the rental, or recycling of their products, recognising that by doing so, the business case stacks up well commercially whilst respecting environmental impact and mitigating supply chain challenges. Furthermore, I am seeing many businesses in other sectors taking a similar approach, automotive, white-goods and electronics manufacturers, led of course by Apple, offering customers the option to repair or replace components of goods they have purchased - I experienced this first-hand recently where I went to purchase a new set of Airpod Pro's and was told that I do not need to replace them as I would have done in the past when a piece was lost or broken, it is now possible to buy individual components to renovate and repair the set I had. Simple and brilliant.

Whilst this may seem like a small change, and one that could well be considered ‘obvious’, it was conspicuously absent in the past.

This example may seem small and insignificant, but scale it up and you realise that it is fuelled by customer need, supply chain challenges and actionable sustainability. Consider this through a macro-lens and realise that when others apply the same or similar strategic thinking, this shift will have a profound impact across sectors, brands and products. It define new industries that will flourish as new technologies are adopted like 3D printing. It will drive localised manufacturing and micro-industries that in themselves focus on a regenerative, sustainable business model and not a ‘buy now, trash tomorrow’ approach. Where recycled materials will be used to create the raw materials of the future. Look at what Prusa are doing with their innovative 3D printing solutions and materials, effectively giving anyone the opportunity to have a micro-factory in their bedroom - scale this up and something really interesting happens.

This new approach to delivery is not only driven by increased scarcity and cost of raw materials, it is driven by a cultural shift and a major change in mindset powered by young people whose whole approach to life, work, purchasing and just about everything is different to my generation of 50 somethings and the 'Gordon Gekko' excesses of the 1980’s.

I know what you are thinking, this is poppycock, and will never become mainstream. I disagree. We have already reached a tipping point in this journey and whilst it may not become mainstream for some years to come, I am certain that if you read this article again in 10 years time, you will see that I am right (sorry for the arrogance). The future is sustainable, open-source and local, micro-manufacturing.