Together with Philips Personal Health
How could a circular service model convince consumers?
Shifting towards circular business models can be radical. Companies must develop new business ways, which come with new partnerships and capabilities. Is the customer even interested in this? Could hair removal -as-a-service help Philips transition to a circular business? And become the win-win-win model for consumers, Philips and the environment?
Challenging the system
Circular business experimentation doesn’t just end debates—it opens doors to new opportunities. While co-creating value that benefits consumers, the environment, and Philips, we encountered some strong opinions along the way. One bold idea was offering hair removal as a service, a potential win-win-win for everyone involved. But the biggest challenge? Testing the riskiest assumption: Would consumers embrace this model in a market dominated by linear thinking? To make the case work, shifting to refurbished devices became essential.
Experiments over meetings
One experiment is worth more than a thousand meetings. That's why we tested our assumptions through small, low-investment trials. Initially, we aimed to prove that a circular service model could resonate with prospective buyers—and secure evidence of sales. But as we ran these experiments, we uncovered even more valuable insights into what it would take to make this model work. It wasn’t just about consumer interest; we also needed to build a closed loop, which included reverse logistics, direct-to-consumer financing, and enhanced e-commerce capabilities.
Understanding consumers behaviour
To truly understand consumer preferences, we tapped into multiple sources of deep insights. We interviewed sellers of used Philips products on Marktplaats, a popular Dutch platform for buying and selling second-hand goods, to uncover their reasons for selling. Prospective buyers shared their adoption barriers in discussions with the product manager, and the biggest hurdle we faced was the perception of hygiene with refurbished devices. To address this, we invited interested buyers to join a pilot program, allowing us to build and test the circular customer experience within a closed community—gathering crucial feedback along the way.
A Role Model for Circular Transition
Philips has long been a sustainability frontrunner, and the Philips Lumea IPL case has become a showcase for how to transition towards a circular business. By offering Lumea as a rental service instead of a one-time purchase, Philips not only extends the product’s life but also reduces resource consumption—benefiting both the planet and the consumer. This model allows users to access the product when needed, minimizing waste while maximizing convenience. It’s just one example of how to create new value in a circular economy. Ready to lead your business in this transition?
