Watch Now: Consumer Recycling Programs Boost Willingness to Pay, Loyalty, New Study Finds

In recent years, major retailers have increasingly offered circular take-back programs, enabling consumers to return products they are no longer using to be recycled, refurbished, or otherwise repurposed. The Boston University Institute for Global Sustainability’s latest Research for People & Planet webinar presented fresh insights into the success of these programs, finding increased product valuation and brand loyalty in consumers.

According to the new Journal of Marketing study, co-authored by IGS core faculty Remi Trudel, associate professor of marketing at the Questrom School of Business, many people are willing to pay more for a product they know they can bring back to the seller for reuse when they are done with it. The findings draw on Fortune 500 field data and a series of experiments to support the idea that take-back programs increase a concept called psychological ownership, or the feeling of attachment people have with certain products.

“For products that allow you to invest in them and allow you to make connections to them, especially with your identity and identities that are important to you, that increases the psychological ownership,” Trudel explained. “And in the end, psychological ownership increases consumer valuation and willingness to pay.”

Study Experiments

In his presentation, Dr. Trudel walked attendees through three of the study’s eight experiments.

  • In the first study, researchers gathered field data over a period of four years from thousands of customers who purchased sneakers from a major sports apparel retailer. In comparison to customers who did not participate in the retailer’s circular recycling program, participants who did spent more money on their subsequent visits to the store.
  • In the second study, participants in three conditions were asked to select between two identical white t-shirts from Zara and H&M. In the first condition, both shirts cost $10.15, only about 40% of participants preferred the Zara shirt. In the second condition, when the price of the H&M shirt remained $10.15 but the Zara t-shirt price was increased to $11.90, less than 20% preferred the Zara shirt. In the third condition, the H&M shirt was $10.15 and the Zara shirt was $11.90, but the Zara shirt was advertised as part of a circular recycling program. In this condition, 56% of people preferred the Zara shirt.
  • In the third study, some participants were shown a photo of an IKEA sofa ad. Another group of participants were shown the same ad, with additional aspirational language encouraging them to be part of IKEA’s efforts to ensure zero waste. Both groups were asked how much they would be willing to pay for the sofa. Those who viewed the ad for the circular product were willing to pay more for the sofa.

Taken together, the findings indicate that “consumers appear to value circular economy products, and they’re also willing to pay more for these products” – a relevant finding for major retailers.

Watch Recording (February 16, 2024)

View the full recording for additional information on the new findings, and the other experiments included in the study:

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