Consumers in Circular Economy: Focus Group Method as a Way to Understand Consumer Acceptance of New Business Model Innovation

Circular economy (CE) has seen as one viable solution to deal with the challenges from diminishing non-renewable resources, global warming, unsustainable consumption, growing population and urbanisation (Merli 2018; Geissdoerfer et al. 2017; Murray 2017; Ghisellini et al. 2016; Hobson & Lynch 2016;). A circular economy is based on the principles of designing out waste and pollution, optimizing the lifecycle and usage of products and materials, and regenerating natural systems (Geissdoerfer et al., 2017; Ghisellini et al. 2016). As a systemic level change, the transformation towards CE will affect consumers, companies, policymakers and societies as a whole (Lofthouse et al. 2017; van Weldeen et al. 2016; Ness, 2008).Successful transformation towards CE needs active consumers that will accept new solutions in markets (Ghisellini et al. 2016). Active consumers are at the centre of the closed loop in the CE, hence, the new business models have to be attractive to consumers. Thus, understanding consumers in the CE plays a crucial role in the whole transformation process. Previous studies (e.g. White et al. 2019) has pointed out that transforming consumers’ habits is crucial if companies are aiming to long-lasting changes - like transformation to CE - in the markets. Furthermore, previous studies have also found that consumers need to combine their existing practices and ongoing dynamics (Antikainen et al. 2015; Shove et al. 2012).Prior studies (von Hippel 1976) have pointed out that focusing on consumer needs can make innovations more successful comparing to ones that concentrate on a technological opportunity. Hence, active consumers may have a central role in the innovation process when companies are creating new CE business models for consumers (Grönroos and Ravald, 2011). In this paper, we will examine how consumer focus groups could work as a useful method for companies to create new CE business models that would be attractive to consumers.Aim of the paper and methodIn this paper, we will focus on using the focus group method as a way to build an understanding of consumer acceptance in novel circular services for companies.We will ask-is the focus group interview effective method for companies to build understanding about the acceptance of circular business models?-what are the pros and cons of using the focus group method?Sociologist Robert Merton and his colleagues developed the ' focused interviewing ' method after the Second World War (Merton, [1956] 1990). They were interested in collective behaviour and the social context of force persuasion, especially in communication and watching films. Focused interviews or focus groups became widespread in marketing and social sciences in the 1980 century, and the use of the method spread completely detached from the previous work of Merton and his colleagues (see e.g. Lee, 2010). Since the 1980s, focus groups have been common in marketing, and also in social sciences researchers have been interested in the method (Cyr 2019).As a method, it emphasises group dynamics: people tend to share experiences in a social context (eg Berger & Luckmann, 1994; e.g. Lee, 2010). They will also influence each other in the discussion. In group discussions, people will express themselves, explain what they think and what is the reasoning behind their views (see Threlfall, 1999). It is a safe environment for sharing ideas and also feed new ones.All the data was collected in collaboration with companies, aiming to have a better understanding of consumer preferences and acceptance about novel, circular economy-based services. We were working with companies who are making products for consumer markets, retailers, logistic companies and waste management companies. Before organizing focus groups, we had a brainstorming session with companies to clarify their needs. After that, we formulated questions for the focus groups and asked feedback from the companies. Companies did not attend the discussions in order to give consumers the freedom to talk.We organised two group events with consumers in Finland. Our first focus group in 2016 focused on the possibilities of the circular economy and novel business models in CE. 42 consumers were divided into five groups facilitated by a researcher. All discussions took between 2.5 and 3 hours. The second focus group event in 2019 focused on home deliveries and additional circular services. 20 consumers were divided by age so that we could emphasise different needs during different life stages. All discussions took about 1.5 hours. Discussions were recorded as audio files and reported as text files. The discussions were in Finnish. In all focus groups, the researcher led the situation by presenting pre-defined questions, each of which was answered in turn. The participants expressed their own opinions and commented on other participant’s views. Furthermore, they wereencouraged to present their views and comment and add to one another’s views. All discussions were recorded and transcribed verbatim to increase the findings’ reliability (Yin, 2013). After the focus groups, the outcomes were reported to companies. Later on, guided by the outcomes some pilots were carried out by companies to test business ideas.FindingsWe used the focus group method in this study because considering new solutions works well in a group context. Although discussions were facilitated by researchers, the other participants in the groups actively contributed to the course of the discussions. We aimed to deepen the understanding of consumer acceptance in everyday life situations and also to understand, how the group situation will affect the discussions. In general, the focus group method is quick and effective, and it can provide data from several people at the same time. This was one of the reasons we decided to use group interviews: we as researchers wanted to deepen our understanding about how people think and why. Furthermore, the companies we were co-operating with had relatively simple questions that wouldn’t need a survey or other representative methods.In our case, the focus group method was found to be an effective one, providing interesting research material as well as practical knowledge for companies. As researchers, we gained rich research data. Besides, group interviews were well suited to our research, where we wanted to know what people think, but also in what way and why they think as they think (cf. Threlfall, 1999). The methodology highlighted group dynamics instead of individual choices. The researcher led the situation by presenting pre-established questions, in which each participant replied in turn. The participants of the group expressed both their assessments and commented on each other's opinions. Besides, they asked questions to each other, while encouraging other chatters in the group to present their views and discuss one another. This is how the interview was structured according to the situation; the views expressed by the members of the group contributed to the discussion.For the companies, the outcome of the discussion encouraged them to decide what ideas could be piloted in order to get more feedback from markets before launching new circular services. The piloting will also help with getting more accurate information about pricing the services. Although we were discussing acceptable price in the focus groups, that didn’t give accurate enough information for the companies.The downside of the focus group method is, that as a qualitative method it does not give representative data for generalization. Instead, qualitative method is appropriate when studying new solutions and co-creating with consumers. From our group discussions, we found several factors that accelerate or inhibit consumer acceptance towards CE services. That will help companies to create new business models and new circular services that will be successful in the markets.