Throughout the world, the linear economic model is giving way to a circular mindset. A few months before Circular Economy Day Belgium, technological companies in Belgium are starting to consider it.

The linear economy involves taking, using and then disposing. In a circular economy, products are created from secondary raw materials, (re)used and then recycled. The model aims to ensure that materials remain in circulation for as long as possible.

Agoria, the federation of companies in the technology industry, states in a recent report that the Internet of Things is now one of the key aspects of the circular economy. The IoT now enables producers to put in place traceability systems, thanks to smart sensors. Some large groups, Renault in particular, have made this a priority.

"Since 2010, we have gone from making each vehicle out of 29% recycled materials to 36%, and the recycled plastic rate has gone from 15% to 22%. We have become self-sufficient with copper in order to supply our foundries, in particular by recycling cables at the end of their life. It is very important for us to work towards accelerating the development of the circular economy."
Jean-Philippe Hermine, Head of the Renault Environmental Plan at Usine Nouvelle.

If you are interested in this area, you can view the report Intelligent Assets: Unlocking the circular economy potential, available for free from the Ellen MacArthur Foundation. This 75-page document is available as a PDF (28 Mb).

New business models

Is ownership a goal? New business models (car hire or carpooling, for example) enable manufacturers to give customers the opportunity to use or operate a product while retaining ownership of it. However, the drawback is they must insure the risks relating to the life cycle of the product.

Thanks to the IoT, devices can indicate if and when they require maintenance or need to be repaired or replaced. Through this model, products use less energy and it is easier to service them. Their materials and parts can also be reused or recycled.

Agoria is already a part of the European Policy Centre think tank, which aims to harmonise European policy on the circular economy (the Circular Economy Package) and digitisation (the Digital Single Market Strategy) more effectively. The federation is currently looking for statements and partnerships in this area. Any company is welcome to provide their thoughts.

"Connecting an ever-increasing number of devices to the Internet creates an amazing flow of valuable data that could boost the circular economy. All you need to do is consider the information relating to the location and the condition of a device, the way that it has been made and the material in it. [...] Soon, all smart devices will be able to indicate if and when they require maintenance or need to be repaired or replaced."
Helen Versluys, Agoria

Circular Economy Day Belgium

Don't miss Circular Economy Day Belgium, which will take place in Brussels on 21 November 2017. As part of this event, Kenneth Cukier, editor-in-chief of The Economist and TED speaker, will share his unique view on Big Data and the circular economy as part of a strategy for growth.

Coping with climate change by adopting a more sustainable business model? That is what Antwerp scale-up zZoomer is doing with its zero-emission e-scooters for pizza deliveries.

Have you perhaps spotted a zZoomer moped or e-bike on your city's streets? That's because they are already being used to deliver the pizzas of Domino’s Pizza and Pizza Hut to your door. "Our e-scooters don't emit CO₂ or smell and are silent. Better for the environment, for the local population, and for the couriers themselves: a real win-win solution", explains Toon Donné, the founder and CEO of zZoomer. "When I saw couriers zooming through the city with loud, polluting motorcycles, I felt that we could do a lot better", says Donné, who trained as an engineer. "Furthermore, delivery services mainly focus on the delivery of meals, not on the maintenance of their mopeds. They are therefore often poorly maintained and, in less than two years, they are ready for the scrap heap! It’s a waste of material, a totally unsustainable way of doing things."

A ‘cleaner’ delivery

zZoomer was founded to solve this problem. "We prioritise sustainable mobility, with e-scooters and e-delivery bikes. Moreover, we have created a tailor-made solution for customers, by adding their branding. We've also made life easier for the couriers, as we manage everything for them", says Toon Donné. zZoomer supplies mopeds and bicycles in good condition and also takes care of their maintenance. In return, the companies pay a flat fee. "Our approach is really sustainable because we only use electric bikes and mopeds. Better for the environment, but also for the image of these couriers. This is also cost-effective, as electricity costs less than refuelling."

Sustainable on every level

In addition to putting e-scooters on the road, the Antwerp scale-up focuses on sustainability in all aspects of its business. "A classic petrol scooter is often good for the scrap heap after 10,000 km, which is absurd. Some of our scooters already have more than 50,000 km on the odometer, without any major problems. Why? Because we choose top-quality bikes and do our utmost to prolong their service life, thanks to regular maintenance. It’s just one way of fighting throwaway culture", he says. The company's approach to energy consumption is no different in this respect: "Vehicles at our Antwerp premises are solar powered. Sustainability is ubiquitous at zZoomer: in our solutions, but also in the way we work."

A bright future

zZoomer already has more than 2,000 vehicles under contract in Belgium. But the scale-up has much greater ambitions... "Our fleet will grow! We started with e-scooters for meal delivery, but soon we also added e-bikes to our range. The next step? We want to help parcel and mail couriers get around more sustainably", says Toon Donné. But the entrepreneur is also considering other opportunities, in “smart” passenger transport. "We are already working on it. Real estate agents at Verimass in Leuven use our e-bikes to get to their appointments. This is a sustainable and comfortable solution, and its helps you avoid traffic jams."

Support from the bank

Given its business activity, zZoomer required substantial financing to get started. "In addition to e-scooters and e-bikes, we also offer electric cars and vans. A fleet like this is quite expensive. A start-up does not have easy access to such large sums of money", recalls the founder of zZoomer, who turned to BNP Paribas Fortis for help. "The only document I had was a good business plan. But the bank’s adviser believed in my project... BNP Paribas Fortis trusted me, because they value projects with a sustainable dimension. The bank really does assume its role in supporting the economy and society", he concludes.

Entrepreneurial success

At BNP Paribas Fortis, we are particularly proud to be supporting passionate, inspiring entrepreneurs. Because building the entrepreneurship of the future together is also an example of Positive Banking!

Coordinating a company's social media strategy is a task in itself. Who will you use to handle this? And what about involved customers who suddenly get too involved?

Because of social media, the role of a traditional marketing manager is evolving more and more towards being a conversation manager: someone who facilitates consumer communication. This includes communication between customers themselves and communication between the customers and the company.

Some key tasks in the conversation manager's job description are:

• Uniting and activating ‘branded fans’, as they will recommend the brand to friends and family.
• Listening to what people are saying about your company and seeking their active contribution to your products and strategy.
• Creating content worth distributing in order to encourage discussions.
• Managing these discussions.
• Ensuring your work is very customer-oriented and customer-friendly through customer care, i.e.by responding faster and providing more than what the customer is expecting.

Some companies are big enough to hire a full-time conversation manager. In other cases another employee will take on this role part-time. A third possibility is using a specialised company.
Caroline Hombroukx, conversation manager at content marketing company Head Office:

“No matter which option you go for, communication in social media must come across as personal. There is definitely a reason why large companies such as Telenet and Belgacom have created a fictitious person to deal with their customers; Charlotte and Eva respectively. The conversation manager also has to know the company and its social media strategy very well. It may therefore be an advantage if someone in the company itself takes on that role. That person is right at the source and so can distribute information, take a quick picture and post it online, etc.

This task is not for everyone. A conversation manager must have experience with social media, have fluent communication and writing style and must be empathetic, positive and solution-oriented in his or her dealings with customers. Prior training is not a luxury, because the employee must be very aware of the company's content strategy. The audience is varied and unpredictable. You have to decide time and time again whether certain content is or is not suitable for your target group. It is also not a nine-to-five job: the online world keeps on turning even at night or at the weekend."

The advantage of hiring a conversation manager from an external company is that in principle the expertise is present. In that case the challenge is to know the company to such an extent that the customer has the impression that he or she is talking to a real employee.

Getting angry is out of the question

Traditional marketing and advertising are a one-way street. If they do not work, they are a waste of money. However, they are not likely to result in angry comments. A company venturing out on Facebook, Twitter or other social media, can be sure to receive comments and reactions. Including negative ones. Caroline Hombroukx:

“On social media the consumer is suddenly right next to you banging the table. It is important to respond well to that. Getting angry yourself is out of the question. You need to respond by showing that you understand and you are taking the question or complaint seriously. Everyone following the discussion must see that the company is providing a quick answer and is trying to find a solution. If a mistake has been made, you can acknowledge this openly and honestly. You can also show the problem as something positive: as an opportunity to improve your brand, product or service. Of course you must find a suitable solution in the end. If the person sharing the complaint becomes too negative, you have to try and divert him or her to a private channel: a private message on Facebook, a direct message on Twitter, an e-mail or a phone call."

An enthusiastic, understanding response also works well if the consumer is sharing something positive about your brand, company or service. Thanking the consumer strengthens the bond between the company and the customer. Caroline Hombroukx:

"The dialogue with the target group is an opportunity to improve your product or operations through constructive criticism. Make customers feel involved. It creates a strong relationship. If you are publishing a magazine or starting a poster campaign for instance, you can let customers choose the best layout or title from three options posted on Facebook, for example. Everything that engages customers can only strengthen their commitment."

The huge popularity of social media brings new opportunities, but has resulted in some new stumbling blocks as well. What are the most recent trends? And how should you respond to them?

Social media such as Facebook, YouTube, Twitter, Instagram, etc. seem cutting edge, but the principle is as old as the hills: word of mouth, sometimes abbreviated as WOM in marketing. Even in the heyday of the mass media, positive recommendations from neighbours, family and friends remained important to a company's success. Newspapers, magazines and television advertising were the first channel introducing a new product to consumers, but word-of-mouth turned out to play a decisive role in what matters most: consumer behaviour. Consumers shared experiences and thereby affected the behaviour of their fellow consumers. Today, more than ever, they do so through social media.

Consumers persuading consumers

Social media are the contemporary, more sophisticated and super-fast successor of old-fashioned word-of-mouth advertising. They are a catalyst. Social networks allow people to exchange views, share experiences, express their dissatisfaction, etc. more quickly than ever.

In addition, more and more consumers are opting for a "social search" over search engines such as Google to find information. They consciously do not search the entire internet, but approach their friends on Facebook or contacts on LinkedIn or Twitter. It speeds up the search and makes the result more reliable. The idea is that if X thinks it is good/nice/beautiful, we will probably think it is good/nice/beautiful too. There is also the option to ask questions and really discuss the product or service you need information about.

Consumers talk about all sorts of products (offline and online), from new detergents to new car models. And it is not just young people who are sharing their experiences about products and brands. Young and old, male or female: everyone does it. All these recommendations between consumers are worth gold.

We can illustrate this with an example: computer manufacturer Dell assumes that 25% of its customers choose their brand after it has been recommended by another user. The average purchase value per customer is about 210 dollars. Based on this amount, the value of every recommendation is estimated at 42 dollars. The more consumers Dell can convince to buy its products, the more money it makes.

However, the reverse is equally true: bad word-of-mouth advertising can have devastating effects. Particularly in this age of social media, a bad reputation does not take long to spread.

Social media in 2014

Perhaps Facebook will no longer exist in ten years' time, but it will most certainly have been replaced by something else. Social media are here to stay. It is therefore important for companies to build a good social media strategy. They can start by thinking about which channel they want to use for which content and objective. What do you need to take into account?

• Content (the message to the consumer) is still the key part, but the importance of segmentation is increasing. The audience is varied, so not all content and every channel is suitable for everyone. As a company, it is best to divide your target audience into sub-target groups. You can then choose specific content and a channel per sub-target group.
• Create real-time content: define a number of key moments in the year in advance and use these wisely. The World Cup, back to school, the summer holidays, etc. are all events that happen regularly and companies can respond to in a clever way. The trick is to find a good link between the key moment and your product. Be creative in this respect. If a school bag brand presents its content at the end of August, it will have to use an original approach to avoid coming across as predictable. 
• Social media are predominantly a mobile story: most consumers are switching to smartphones and tablets. It is no coincidence that the four best-known social networks are also in the list of most popular mobile apps: Facebook, YouTube, Instagram and Twitter. In any case, your content (both on the website and on social media) will have to be mobile-friendly. 
• The importance of customer care is only increasing. Consumers will now use social media more than ever to find information, ask questions and make comments.

Which stages should a company that is venturing into e-commerce go through? And how do you avoid customers and employees getting stressed and frustrated in the process?

Phase 1: managing the channel conflict

When a manufacturer, distributor or importer starts selling the products they previously only sold to shops online themselves, the shops may experience that as a channel conflict. Their supplier has now become a direct competitor benefiting from low start-up costs as well as more customer convenience. But does the supplier have a choice? If the supplier does not sell online, some customers will go to a seller who does. The solution? Benny Sintobin, Manager of e-commerce specialist Frucon²:

 "The channel conflict is a perception debate that is more emotional than rational. E-commerce is unavoidable, so you had better adjust. The roughest edges of the channel conflict can be smoothed out by being a ‘friendly’ online store. With that I mean that you have to approach it correctly, with empathy for the party that may be at a disadvantage. You have to be bold enough to tell the customers of your distribution channel in advance what you are planning and which rules you are going to follow. If you start up everything on the quiet, you will cause frustration and negative emotions."

And these are totally unnecessary, because the new situation can be favourable to the distributor or shop as well. The distributor's online sales channel can also refer to his customer's website or shop, for example. Benny Sintobin:

"Take a bicycle manufacturer offering bicycles to customers online, for example. The website could allow consumers to combine certain materials and colours online in order to create a personalised model. The bicycle can be sent by courier, but can also be delivered to a retailer near the customer for the customer's collection. In that case the retailer will have to be satisfied with a smaller margin and the fact that he has gained a new customer, who will come back later to buy a helmet or a bicycle bag or to have his bicycle serviced. The other members of his family will follow his example for their bicycles and accessories. That way everyone wins."

Downward price spiral

When you say channel conflict, people almost automatically think about a price war between shops competing with online sales channels offering the same products at a lower price. According to Benny Sintobin it is therefore important to put a fair, correct price on the products:

"When manufacturers engage in e-commerce themselves, they set the product's retail price. The price is there online in black and white. In that case shops can rarely afford to charge a higher price. That is why the pricing must be correct, so that shops can still earn a living.

In practice a channel conflict often causes the reverse phenomenon: it is usually not the manufacturer, but the shops starting the downward price spiral. That is in fact the biggest threat to e-commerce: the shop trying to hurt the supplier. Major players striving towards market dominance can afford to destroy their profit margins. However, smaller manufacturers and brands cannot compete in such a price war. This proves once again the importance of making good e-commerce arrangements."

Phase 2: geographical expansion

Once the channel conflict has been well and truly digested, it is time for the next phase: tapping into new markets. For larger SMEs e-commerce is often a perfect way to gain more of a market share. For example, take a Belgian brand that achieved a nice market share in Belgium by selling in retail points as well as through its own online sales channel. Perhaps the brand has developed some brand awareness abroad through a couple of shops in the capital, for example. Benny Sintobin:

 "In that case it is entirely possible that some consumers abroad know the brand already, but are unable to get to the shop because of the distance. It would be very unfortunate not to take control of that potential channel yourself and to leave it to Amazon, would it not? Online your products are available to all customers. Conclusion: expansion abroad with an e-commerce channel could be the first low-hanging fruit that is therefore easy to pick."

 Phase 3: reinventing your business model

 The third phase in e-commerce is a leap in the dark. Company thinking is traditionally product-, market- and wholesale-oriented. Take a company manufacturing or importing pots and pans, for example. That product is part of the world of cooking and dining, but still the sales strategy traditionally focuses completely on the product. However, the online activities offer opportunities to change tack and create an entire world around the particular product. You can work with other companies in that respect: a publisher to create content about dining, a candle manufacturer, a herbs specialist, a table linens manufacturer, a supermarket offering home delivery, etc. Benny Sintobin:

"Around Valentine's day or other key moments of the year you can create content and an entire world where those pots and pans belong. In that case what you sell online becomes more of an experience than a product. The effect is further strengthened if each of the partner companies present that experience on their sites as well. That way you enter each other's customer base and target groups. And you also immediately make sure that your social media really start to work for you. Consumers will tend to like a Valentine's experience more than just a set of pots and pans. In other words, you become a "love brand" rather than just an everyday product."