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Sustainable purchasing in the laundry, a frugal management approach (second and last part)

In the first part of “Sustainable Laundry Purchasing” – in the previous issue of Detergo Magazine – we described how the environmental awareness drives the consumers in their purchasing decisions for goods and services. What determines the indifference curve of the conscious consumer? Companies and their marketing policies are responding to this everincreasing demand for sustainability. In this second part we focus and analyse the reasoning behind an approach, a management model, frugal management

Sustainable value for the customer

For creating a Sustainable Value for the customer, it is essential to adopt a management model that considers fundamental dimensions such as eliminating waste, valuing people, reducing environmental impact and business sustainability. This new approach, which also integrates digital innovation, requires in-depth reflection and a holistic business approach. Once established, it promotes a more efficient, customer-oriented, and sustainable operational capability, on long term. The reason I formulated this model based on four interconnected dimensions is that today it is no longer enough to adopt a lean approach; there is a need to evolve towards a new sustainable lean approach.

Now, let’s see the importance of each pillar:
Environment: in the modern era, the environmental impact of business activities is crucial. Frugal Management promotes sustainable practices by reducing resource usage, greenhouse gas emissions, and preserving biodiversity. The integration of eco-friendly measures contributes to building a more sustainable future.
Business: sustainable value requires a long-term vision. Focusing on ethical and responsible management, promoting fairness, involving stakeholders and improving corporate welfare.
Social: social responsibility is increasingly important. By integrating the social aspect and focusing on the well-being of individuals, improves working conditions and supports social initiatives, actively contributing to improving the quality of life in the communities where the business operates.
Digital: integrating digital innovation into Frugal Management redefines business operations. This innovative element enables companies to optimise processes, improve efficiency, collect and analyse data for evidence-based decisions and provide personalised customer experiences, promoting growth, competitiveness and more efficient resource management.

The pyramid of Sustainable Value and its 28 elements

Starting therefore from a Frugal Management approach, from the 17 Goals of the 2030 Agenda, and analysing the SDG’s and GR1 indices, I have identified 28 “elements of sustainable value”: fundamental attributes in their most essential and discrete forms. These elements fall into four sustainability steps starting from the lowest and most essential level related to business impact, passing through the second social level, the third environmental level and culminating with the fourth digital level, to the global impact contributing to improving health, environment and life.

Some elements are more inward-looking and mainly respond to basic and personal consumer needs such as reliability, certification, efficiency, benefit, concision, transparency, ethical and solidarity impact and the immediate proximity to the place of production (elements of business impact). For example, when we speak of reliability elements, we refer to the extended product guarantee, or if we discuss about certifications we think of ethical or environmental certifications (ECOLABEL, FSC, IGP, SA8000, ISO 14001) including also those that are enhancing the product such as (DOC, IGP, IGT, etc.) in addition to the traditional ones (UNI EN ISO 9001). For example, a company operating in the textile sector that we analysed (makagreen.it) responds to several values by transforming textile waste into a recycled product through a virtuous, circular, traceable and eco-sustainable process.

Other elements of sustainable value involve the social impact in terms of new product design in the social context, therefore accessible for most of the customers and their own groups, products that are easily accessible and user-friendly for women, children, the elderly, disabled and visually impaired individuals, etc. Products that have a social impact already during their production process using a workforce that includes disadvantaged or disabled individuals. This creates an inclusive product that inspires confidence in the future and invests in the community by becoming a responsible and regenerative product. These are products and services that promote well-being or simply help individuals feel good by facilitating connections between people or inspire them for positive actions.

When we refer to the consumer’s affirmation that a certain product characteristic must be sustainable; we have analysed what lies behind that statement. For instance, when a customer states that its Notebook is “eco-sustainable”, its value stems from a combination of elements that include the use of noble, recycled or recyclable components, has low energy consumption, has ergonomic features with an eco-design, has a longer lifespan than other products from the same category, and its logistics or supply chain is also eco-friendly.
Apple, for example, declares that 20% of the materials present in the products sold in 2022* were recycled or sourced from renewable sources.

Digital products or services

If we shift the focus to digital or even enhanced products or services (those with a digital component), the most important factors for the customers or consumers are often the usability of the services, simplicity, product traceability, the possibility of collaboration, after-sales support and the digital carbon footprint of the solution.

Excellence is achieved in the universe of the sustainable value pyramid through tangible results for the customer. This means that the product or service has the potential to improve health, contribute to the well-being of the planet, and consequently enhance the overall quality of life.

The right combinations, according to my analysis, pay off in increased customer loyalty, a higher consumer willingness to try a particular brand, and sustained revenue growth. Some case studies point precisely in this direction, especially when we are talking about small and medium-sized enterprises (SME).

Confrontation with Maslow’s “Hierarchy of Needs”

If we compare the Sustainable Value model with its conceptual roots in the “Hierarchy of Needs” of the psychologist Abraham Maslow, first published in 1943 emerges an interesting framework. Maslow believed that human actions arise from an innate desire to fulfil needs ranging from the basic ones (safety, warmth, food, rest) to the complex ones (self-esteem, altruism). Almost all marketing professionals of nowadays are familiar with Maslow’s hierarchy. The sustainable value approach extends Maslow’s insights by focusing on people as consumers, describing their sustainable behaviour in relation to products and services. Certainly, a brief comparison between Maslow’s thinking and our model can be insightful. Marketing experts have traditionally organized Maslow’s hierarchy into a pyramid. At the base of the pyramid are the physiological and safety needs, while at the top are the self-fulfilment and self-transcendence.

The popular assumption is that individuals cannot fulfil the higher-level needs until they have satisfied those below. For example, climbers may achieve self-actualization in ropeless ascents of thousands of feet, while ignoring basic safety considerations. Similarly, for a company to deliver these higherorder elements, it must provide at least some of the functional elements required by a particular product category. But today there are many combinations of elements in successful products and services. The relevance of the elements of sustainable value may vary depending on the industry, culture and demographics. Indeed, for many consumers, the low price of a light bulb may be an important factor in the decision-making phase, but not more decisive than perhaps the efficiency, durability and consumption of the product itself, that can be inferior to competitors.

Which are the most important elements in the laundry sector?

What customers appreciate in the laundry sector at the base of the pyramid is definitely the price, services, quick turnaround times, support, warranty, especially when it comes to machines. However, when moving towards products with a strong innovative thrust or a certain prestige, aspects related to the environment and social impact begin to influence customer expectations, guiding them towards a conscious, responsible, and sustainable purchase.

The Value Sustainable Index (VSI): a new tool to assess and improve corporate and product sustainability
We have analysed that in the complex and interconnected global context, measuring the sustainable impact of companies, products, and processes has become more crucial than ever. In collaboration with Prof. Monica Rossi from Politecnico di Milano and two of her brilliant students, Eleonora Tritto and Emanuela Ricci, from the Product Life Cycle Management course, we have developed an innovative index: the Value Sustainable Index (VSI). This tool not only that goes beyond the traditional ESG approach but also introduces digital and innovation elements, marking a turning point in the way sustainability is evaluated.

Focus on Digital Innovation as a Key to Sustainability

The Value Sustainable Index highlights innovation and digitalization as fundamental pillars of sustainability. It recognises the power of these forces in improving accessibility, reducing environmental impact, and promoting the well-being of individuals. With a particular emphasis on the Internet of Things, Cloud Computing, Blockchain, Artificial Intelligence, and Advanced Analytics, the VSI represents a step forward compared to traditional ESG models.

The “Twin Transition”: Digital and Sustainability Intertwined

Digital transformation and innovation are not just paradigm shifts, but are central to sustainable development. This “twin transition” highlights that sustainable development and the digital transition are interconnected and mutually supportive. Digitalization along the supply chain is recognised as a driving force for economic, social and inclusive sustainability.

The Heart of the Value Sustainable Index

Based on the 17 Goals of the UN 2030 Agenda, the VSI carefully selects around 200 parameters reflecting the different dimensions of sustainability. These parameters are organised into 4 main assets: Economic/Governance, Digital, Environmental and Social. The scientific analysis of this data generates a comprehensive assessment of the sustainable value of a business, product or process.

A Step Forward for a Sustainable Future

Small and medium-sized enterprises (SMEs) have now a structured approach to assess their sustainable impact and take concrete actions for the future. This index serves as a practical guide for companies wishing to integrate sustainability into all their activities, demonstrating a concrete commitment to a better world. Sustainability not only contributes to development goals but also provides economic benefits and enhances corporate reputation. With recommendations for improving each parameter, the VSI becomes a crucial ally in creating sustainable value.

The aspects analysed and measured in the Sustainable Value Index model are:

OFFICINAE LEAN & DIGITAL MARKETING

OFFICINAE LEAN & DIGITAL MARKETING
Via Passarelli 99, Matera (I) – Tel. +39 0835 333321
info@officinae.com www.officinae.com

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