In this new episode, Yann Toutant, CEO of Black Winch, and Yann Carré, Leader of Circular Business Models at Decathlon, explore the evolution of Sports-As-A-Service and the shift toward circular business models.
In this new episode, Yann Toutant, CEO of Black Winch, and Yann Carré, Leader of Circular Business Models at Decathlon, explore the evolution of Sports-As-A-Service and the shift toward circular business models.
Decathlon is a family-owned company, founded in 1976, and inspired by the belief that the best sports products should be accessible to everyone.
With 2080 stores in 56 countries, Decathlon is dedicated to helping, inspiring and guiding you through your sports experiences.
Decathlon is not just a reseller. They draw on their knowledge and experience to create, design and manufacture their own products in their own studios and labs.
They design their products to be simple yet smart, stylish yet practical, affordable with a focus on quality.
Decathlon has integrated a B2C as-a-service model as part of a broader circular economy strategy. Their aim is to reduce the 75% of their environmental impact from producing sports goods while maintaining economic value.
Decathlon promotes sustainability through circular business models including rentals mainly: short-term daily rentals and monthly subscription rentals.
This initiative is part of a comprehensive effort to encourage product reuse, repair, and resale, enhancing the scalability and impact of their sustainable business practices.
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"It’s a reality that the more you produce and design products to sell them in a linear business model, the more impact you have. For example, if Decathlon grows 15% in turnover, CO2 emissions will grow 15% as well. There’s also an impact that we’ll have to measure in the future which is about biodiversity etc. Of course we can work on eco-conception and the whole value chain to reduce our footprint, but there’s an immediate relationship between your growth and your impact on the planet."
"Eighty percent of our footprint comes from our products. Our ambition is to become carbon-neutral by 2050. Achieving this while still creating economic value requires us to reinvent our business model. Transitioning from a linear to a circular economy is one way to do this, encompassing repair, second-life sales, renting or subscribing, and also at the end recycling the goods."
"In a linear model, one product equals one transaction. In a circular model, one product can facilitate multiple transactions, as it’s used only when needed. And when you don't want to use it anymore you can return it to Decathlon and we will make sure to recondition it, to refurbish it so that somebody else can use it again and again and again."
"We know that practicing sports is also about seasonality. There are peak seasons, high seasons, and low seasons. Our goal is to offer a win-win situation for our clients. For example, if someone wants to use a home trainer during winter, it will be a peak season because it's too cold or dangerous to ride a bike outdoors. People are willing to pay for it during this time. However, when the weather improves, and outdoor activities become viable, customers naturally prefer to go outside. So maybe offering an adapted pricing model during the low season would be interesting for the customer as he will pay less. And if, as the retailer, we get less because of this contract, that will be even better than getting the cost of storage and return."
"Everyone understands, very roughly, that [as-a-service] is a good idea. But when you start the transformation, it creates a mess in the organization and processes. There are constraints in the information system, in finance, in CRM, in the organization, and even in the bonus system for teammates. Everything is impacted. As a transformation, it’s very difficult to make it clear that we need to go step by step. We can succeed, but it won’t be all pleasure because we’ll need to put in the effort to transform ourselves. The company has been designed for the last 45 years to be the best retailer in the world, designing and selling products in a linear model. When you come in and suggest doing circular for good reasons, they say, “Yes, but…” That “but” is very important. You have to be convincing. You have to go through the windows when the door is closed, through the chimney when the window is closed, and keep going again and again. You have to demonstrate that the value creation is there."
"I want to share that if you truly want to make it happen and have a chance to scale, you need to follow the steps: start with a POC, move to an MVP, and then aim for scaling. But to succeed, you absolutely need sponsors. Without C-level executives in your company involved in your project, supporting and backing you up during the tough times, which inevitably come, it will be too hard to do it."
Decathlon: https://www.decathlon.co.uk/
Zuora success story: https://www.zuora.com/guides/how-decathlon-is-embracing-the-subscription-economy/
Yann's' podcast for“On the Way” - The emergence of Sport As A Use: https://podcast.ausha.co/on-the-way/on-the-way-yann-carre-decathlon-english-version
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