Why subscription is the solution for a more affordable circular economy

Achieving circularity means keeping resources in use for as long as possible, and doing what we can to avoid products of any kind ending up in landfill. This idea is as important for tech as it is for any other sector. Already the world produces [53.6 million metric tonnes of e-waste], and that figure is predicted to jump to more than 74 million tonnes by 2030, according to Global E-waste Monitor 2020. So a circular tech economy is vital to help reduce this waste burden – and to avoid the kind of emissions that come with extraction and manufacturing.

But for sustainable solutions to become truly widespread, they need to be affordable. There is, after all, no use offering sustainable products of any kind – be they cars, clothes or tech devices - if the majority of people have no access to them.

One answer lies in the kind of model we have pioneered at Alchemy: recovering, refreshing and remarketing devices at affordable prices. We have now traded more than 5 million devices and avoided an estimated 342.2k tonnes of CO2 emissions in doing so.

The other answer lies in a model that’s gaining more popularity all the time: Device-as-a-Service or Tech Subscription programs. Here we’ll look at how marrying these two concepts could change the landscape for tech circularity - and why it might be the perfect option for your business.

The challenge of affordability in sustainability

For many companies – as well as individuals – the main hurdle for investing in more sustainable products resides firmly around pricing. Partly that’s down to the reality of costs being higher for more sustainable products, and partly it’s down to the perception that costs will be higher, even in cases where they aren’t.

Sustainable living has gained this reputation because, across different industries, prices have generally been higher for more sustainable goods. This often results from higher costs of production, when undertaken in a more sustainable manner, be it raw materials extraction or the higher costs associated with sustainable labour and manufacturing methods.

But the perception that a sustainable way of life is always more expensive should be challenged. And the way to do that is to make living more sustainably more affordable to people from all socioeconomic groups, and to companies of all sizes. Technology subscriptions offer an alternative to traditional ownership models, and could offer the ideal solution.

The rise of subscriptions

Once the domain of the media world, especially in magazines and newspapers, subscriptions are now having an outsized impact across a range of industries. Everything from entertainment to education, meals to make-up are being offered by subscription, and the popularity of the model is expanding all the time. According to a report by subscription management provider Lineup, the digital subscription economy was valued at around [$650 billion last year], and it’s projected to more than double in size by 2025.

This rise in subscription models has come in parallel with a more general focus on sustainable ways of living, leading to subscriptions that are geared squarely towards sustainability. That’s especially been the case in fashion, where the trend for on-selling unused clothes is gaining ground, making for subscriptions that are both more sustainable and more affordable.

The benefits of tech subscriptions for businesses

For many businesses, affordability is central to the choices they make around their tech investments. Subscriptions are a way to alleviate the financial burden of heavy upfront costs and to provide access to premium technology at an affordable price.

Put simply, by investing in a device as a service (DaaS) subscription model, an organisation gains the ability to spread the cost of tech services over a number of months/years, and agrees to return the device at the end of the term.

By buying into this model, device tech can be returned at various stages within the subscription plan, meaning these devices can be resold or refurbished, and re-introduced into the subscription program pool. Not only does this create a new way to acquire and use premium technology products without large upfront costs for the buyer, but it also encourages devices to stay in circulation for extended periods of time.

For example, Alchemy provides access to tech devices up to [90% cheaper] than brand new products. By then offering this kind of accessibility within a subscription model, both businesses and individual consumers can buy more up-to-date devices without the worry of large upfront costs.

Moreover, these models champion ongoing product reuse and refurbishment, curbing overall waste and promoting sustainability. For example, for every refurbished device bought, 76.05kg of CO2 emissions, associated with the manufacture of an average new device, are avoided (data on average across 20 iPhone models). In an era when ESG goals are becoming ever more important to a business’s overall strategy, this represents a crucial sustainability win.

And the same is true at both the individual and the community level. With increased access to refreshed tech and further sustainable subscription models at affordable prices, the circular tech economy can help reduce various income-related disparities and create a more equitable society. Subscription-based sustainability: the future of tech?

Sustainability in general becomes far more achievable via the circular economy. And in tech, that’s especially the case through buying and trading refreshed devices via innovative subscription models.

Businesses can reduce their carbon footprint without breaking the bank or reducing the quality of the tech being used. Furthermore, subscription models enable more individuals and companies to participate in the circular economy, thereby fostering a greener, more eco-conscious future.

The challenge now is persuading business leaders, policymakers and individuals to recognize the importance of these types of models to achieving ESG and carbon-related goals. Because those goals must be met - and it’s time to gear the way we do business towards meeting them.