Consumer acceptance of circular business models and potential effects on economic performance: The case of washing machines

Ece G. Gülserliler, Joseph D. Blackburn and Luk N. Van Wassenhove

Journal of Industrial Ecology, 2022, vol. 26, issue 2, 509-521

Abstract: A key principle of the circular economy is to fundamentally reconsider the nature of the transaction between producer and consumer. To facilitate circularity and enhance sustainability, producers retain ownership of a product throughout its lifetime, and consumers lease, rent, or share the product. This paper examines the feasibility of leasing instead of buying a product from both the consumer's and manufacturer's perspectives. We focus on repeated leasing with refurbishment in‐between for the specific case of washing machines. Through an online experiment, we assess the preferences of consumers among the alternatives of purchasing a new machine and leasing a new or a used machine. The results reveal that the market is segmented and consumers have distinct preferences driven by psychological antecedents such as disgust, pride of ownership, and convenience of leasing. While there is some demand for leasing new and used machines, there are also barriers to the transition from selling to leasing: a significant number of consumers prefer to buy instead of lease at any price that would sustain a manufacturer's profitability. Moreover, there appears to be an imbalance in the consumer demand for leasing new and leasing used—a mismatch that poses an obstacle to the economic feasibility of a circular economy.

Date: 2022
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