Edition #1 – For internal use only

Supporting transition to a circular economy: C-SERVEES

 C-SERVEES is a project which aims to boost a resource-efficient circular economy and Arçelik is involved with television and washing machine plants where are also being considered as a demo participant in the project.

A circular economy is an alternative to a traditional linear economy (make, use, dispose) in which resources are kept in use for as long as possible to extract the maximum value from them whilst in use, they are then recovered, and the products and materials are regenerated at the end of each service life.

Arçelik has been developing innovative methods in circular economy solutions for years, and at the end of 2019, the company announced that it would become part of the European Union’s Horizon 2020 funded C-SERVEES Project. C-SERVEES aims to boost a resource-efficient circular economy in the electrical and electronic (E&E) sector through the development of new circular economic business models. As a contributor to this project, Arçelik is developing ICT tools for communication and securing information through the value chain to support these new models in collaboration with the countries. Arçelik will secure one million euros in funding for this project, which is the highest amount of funding received by any company involved in the Horizon 2020 projects.

As part of this project, Arçelik will be involved with the production of televisions and washing machines – 100 demo products will be made, each of which will have special focus placed on the circularity aspects of the product. After this, the demo products will be rented to customers. The rental period will last one year, and the products will then be collected, refurbished and presented to customers as secondhand products (these products will have the same warranty terms and conditions as a brand-new product).

Through this project, Arçelik aims to develop business models that put the circular economy to work, and concentrate efforts on product life extension and circular supplies models. As a result of this project Arçelik have:

• Increased the use of recycled components in TV’s and washing machines

• Rented specific mechanisms and renovated existing models

• Maintained the use of ICT tools and blockchain technology to track the recycled plastic parts of products

• Used QR codes to inform customers about the recycled materials in their products as well as the inclusion of any other relevant information.

CSERVEES Survey

As part of the C-SERVEES project, a survey was conducted to understand the behaviors and thoughts of consumers regarding circular business models such as sharing mechanisms, renting, reputation and pay per use.

The survey was conducted in countries including Turkey, Great Britain, Russia, the USA and Australia. A total of 71 people participated and their answers are recorded and analyzed below.

In the summary, the responses conclude that people would consider renting a refurbished product if they were assured that it was of high quality and had the same warranty as a brand-new product. However, survey participants added that a refurbished product should be cheaper than a new one. If a company can meet these criteria with the products that they are selling, then consumers would be willing to use the products at home and recommend them to others. In addition, the answers revealed that customers would perceive brands which sell refurbished products and commit to newer circular economy models and efficiency, as more sustainable and morally conscious than others and it would result in an increase in respect and value from the customer.

These results, demonstrate that customers are willing to make changes to the products they buy if they consider the brand to be authentic in its efforts.

Highlights from the survey:

1.What do you think about renting a connected WM/TV instead of purchasing a new one if the same quality and warranty terms apply?

2.How would you feel about your favorite brand’s reputation if you knew they were also offering circular business model alternatives such as products for rent, pay per use or refurbished products with the same warranty terms?

3.Would you consider renting a connected TV or washing machine appliance, custom designed in accordance with your preference and receive customized services for spare parts?

4.What do you think about a pay per use model for a connected washing machine if it was installed in your house, but you only had to pay when you used it?

5.Would you be willing to purchase a secondhand version of your favorite brand's TV/washing machine, knowing that it was properly refurbished with the same quality aspects and warranty terms?

6.What did you do with your latest home appliance before you got a new one?