[Tribune] Confronted with inflation, the round economic system is imposing itself on manufacturers

Our consumption model is no longer adapted to the state of the planet and our globalized economic and logistical system. While inflation could reach 10% in the euro zone, the purchasing power of households is declining. To cope with this situation, a large number of distributors and brands have chosen the “usual” solution: to continue to offer the best price, regardless of the price. Customers are under pressure, brands are reducing their margins and paying less and less attention to the quality of their products, which is environmental nonsense on all sides.

End of hypergrowth

For more than 50 years, the leading economic model has been hyper-growth in the production of consumer goods. Faster, more quantity at the expense of quality. It is always cheaper to be more accessible to everyone, at the expense of sustainability.

In this way, brands participated in one of the superiorities in marketing, without thinking about the ethics of their proposals. Social networks, influencers, challenges of all kinds … At the end of the chain, brands encourage their customers to overspend. The archetype of this situation is the Shein brand and its “Try on Haul” which forces its young customers to, through unethical marketing, buy all new products to try them out in two hours on their Tick Tok account.

The good news is that the era of profitability that is directly related to production volume capacity is coming to an end. This is an opportunity to take advantage. Finally, changes that have been announced as temporary – maintaining margins while separating from the price of raw materials – may become permanent.

The aftermath of the crisis has brought logistics circles to a standstill several times. Ensuring continuous, uninterrupted delivery is becoming a major challenge for mass distribution. This continuous pattern of shelves is no longer desirable. Our consumer habits – which we have already changed in search of meaning – are constantly being shaken and seem to be taking a new forced turn. This is great news, because the virtue of change rarely comes without limits.

What vision of the future do brands defend?

For certain products for immediate consumption – such as food or hygiene and beauty – it is true that alternatives are limited. However, many sectors can rely on the circular economy to control both inflation and their environmental footprint. Several industries have already turned to consumption that favors use over ownership or used over new: from DIY to home appliances or electronics, including cars and sports. Textiles are gradually adopting a subscription and rental model for certain moments of life such as pregnancy and childhood. This is the future of consumption: buying products with high added value and renting those from everyday life, interrupted by events.

The circular economy provides a solution to the environmental issues and supply and purchasing power difficulties that brands face. It also allows companies in the distribution sector to find a new reason for their existence: to reduce the pressure on resources and to help consumers cope with budget constraints in families. All of these actions go in the same – good – sense: stop wanting to own at all costs and move towards reasonable, reasonable, even timely spending. Go from the lowest bidder to the highest bidder, change practices and attitudes.

Brands are playing an increasing role in this inevitable change because they are the ones who best control their products. It will most likely increase its usefulness, and even more so in a used hand or rental. They remain the most legitimate way to check the quality of a product that is returned to their stock before putting it back on the market for the next customer.

They have everything they can get from the transition to a circular economy in order to keep their license to work and guarantee the acceptability of their activity.

Anna Balez is the CEO and co-founder of Lizee, a startup that helps brands transform their development models to embrace the circular economy. This engineer, passionate about innovation and industrial processes, is convinced that in 10 years the production of new facilities will be halved.

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