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    Wednesday, September 26, 2007

    The Recycling Economy

    Businessweek has an interesting article about Sony's announcement to start a recycling program. What makes this an extraordinary program, was that it was started internally and mapped out a potential revenue generating pipeline from its own discarded wares. It seems these days a company's best ideas come from the outside. (yes i can speak to this being a consultant)

    The program's goal is to offset every new product in the US, lb for lb. Sony has partnered with Waste Management Inc, one of the largest refiners of used materials. The brand will ask people to donate goods at 75 centers in 18 states. The goal is to expand to 1000. The kicker is Sony products are free, and other brands are received for a fee.

    Really what caught my eye was the fact that an electronics brand was treating recycling as a business, not a facet of consumer behavior. Much of this has probably started because consumer awareness over waste, particularly e-junk has soared in the last few years. Thats not a bad thing, but as this has happened a new economy has been generated. Economies aren't just created through the sales of products, but their deaths as well.

    States used to pay for returning bottles, but now Minnesota charges for curbside pickup and California adds $6-10 fee on retailers for all new electronic/appliances. New York City, the anomaly as always, has homeless people that make a 'living' solely on recycling goods for money. Product cycles are changing as brands and corporations become more transparent. Your product is accountable from conception to development to usage to endgame.

    Think about the product-consumer relationship. Products sells, corporations receive sales, pay off debts and the rest is profit(assuming they have balanced the check book). In the digital age of transparency, now the entire product's lifecycle has to be considered. The rules have changed because companies are responsible for their products not only outside its intended use, but in greater scales such as locally, globally and future generations.

    Producers certainly don't make products like they used to, but they may not be necessary in the age of Moore's law. We replace phones every few years, tvs every half-decade or so, and so on. Its almost a rule of thumb that new hard drive would only last a few years. Purely speculation, but companies might be considering this more and more when they create things these days.

    Think about the existing product lifestage:
    -Manufacturing & sale

    Really brands only profit from the first, and less so from the second part of the cycle.

    Beta brands and better brands in general have multiple touch points for consumer relationships. Most often brands work so hard on the sell, sell, sell and less so once the product has been bought. Ok i have your money, now what? Beta brands tend to do a good job keeping in touch with consumers, by opening dialogues which in turn can open multiple revenue streams. Just look at all the social/networking thingies that have arisen to be the new Silicone Valley. But how often are brands able to capitalize when a consumer has thrown away a product and ended the direct relationship? At that point brand trumps product in a rare instance, but how can a brand have influence over a product relationship? Especially a defunct one?

    Integrating a relationship into the post-ownership of a product creates a brand that is not only more regal and above typical transparent branding efforts, but one that is truly rooted in the cause of the post-ownership relationship. In this case its recycling and do-good for the earth. I'm not sure why more brands haven't capitalized on this "do the right thing" mentality, other than profits often go out the window.

    Is the recycling economy one of the next big areas for innovation? Possibly. If more brands consider the lifecycle of their product, we just might have less waste and live in a better place. Additionally new economies can be created through the retrieval and re-usage of potentially valuable materials. Everyone would like to believe their product will last forever or is the last tv they ever buy, but brands must consider what happens to the product after consumption. Brand responsibility should be something that everyone preaches.




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