Consumer Perceptions of the Circular Business Model: A Case of Leasing Strollers

Abstract

Circular Economy (CE) promotes trading functions of a product as a service instead of selling the product in conventional ways. For a product like a baby stroller, the function means ensuring mobility with infants without needing to own a stroller. This approach of acquiring functions only when needed opens up the possibility to share the same products with multiple users. For a manufacturer that has built its business on a conventional sales model over the decades, this shift may be too radical. Therefore, for the manufacturers, it is important to understand consumer perceptions of the service-oriented business model before entering this unknown territory. To develop a thorough understanding of consumer perceptions of leasing a stroller instead of buying one, a survey among 200 parents in Stockholm is conducted. The survey brings out quantitative results such as 39% of respondents are open to leasing and identifies key influencing factors such as convenience and environmental image that play a key role for the remaining 61% of respondents to choose leasing. This research concludes that a large number of consumers are open to leasing if a high level of service and environmentally sustainable strollers are offered at a competitive price.