Bundles offer clean clothes on a pay-per-wash basis. Applying Internet of Things technology enables product monitoring, while maintenance and refurbishment of higher quality machines preserves the product integrity for multiple cycles.
The idea of an ‘Internet of Things’ (IoT) has captured public attention and permeates the mainstream tech and business media. We hear about how billions of devices will be connected to the Internet in coming years and the changes this will bring, but how might this impact the design of products and – perhaps more importantly – business models? Dutch start-up Bundles is demonstrating the benefits of a holistic view by applying IoT technology to the laundry industry.
Marcel Peters was working at a utilities company and was part of the emergence of the Internet of Things, working on a smart meter to monitor domestic energy use. Within this industry, he began to notice that this new connectivity was primarily being applied to remote control or monitoring, or for ‘smart’ devices – an oven that can download recipes or fridge that tells its owner that they need to buy milk. This potentially groundbreaking technology was used to give additional features to products that were still sold in the traditional way, and hadn’t been applied to a pay-per-use model in a way that supported maintenance and lifetime management of materials.
So in 2014 Marcel established Bundles, a company that offers clean clothes on a pay-per-wash basis, so customers pay for the performance, not the product.
In some respects, the process is comparable to the purchase of a mobile phone contract. Customers go to the Bundles website and select their machine requirements and expected use frequency, enabling Bundles to suggest a monthly fee. After payment of a deposit and the first monthly fee, the appliance is installed with the previous machine removed if necessary. Once the device is connected to the Internet, the user is ready to go. After the first month the user receives an overview of how often they used the machine, and can have their tariff adjusted retrospectively.
One important difference from the mobile phone model however is that users can end their relationship with Bundles at any time. While Marcel admits that this is a slightly greater cost to the business, it has been crucial in reminding customers that they are in control. One source of apprehension towards such performance economy models is that customers will be at the mercy of one company or platform for all manner of household items. As a result, Bundles have made terminating the contract as easy as possible.
While the Bundles technology involves effectively ‘retrofitting’ a standard washing machine available on the market today, the choice of machine has still been crucial for Marcel in selecting a provider for Bundles. According to Marcel, Miele is the only remaining manufacturer that uses 100% reusable or recyclable materials. Open up one of today’s washing machines from other manufacturers, and you’ll often find materials chosen for their lower cost rather than long-term durability or recyclability – for instance, stainless steel has been increasingly exchanged for plastics, and cast iron for concrete. This has taken average lifetimes from 10,000 hours for a high-quality machine down to 2,500 hours for a low-quality unit. So when an appliance returns to Bundles, it can be repaired or remanufactured, ready for the next user.
The leasing scheme transforms a long-term investment in a 10,000-cycle machine into multiple cash flows and the right to use the machine for a certain period of time. This results in an economic win-win situation and yields positive material and energy implications through prolonged lifetimes of the products.
In an ideal world, a Bundles appliance would be designed specifically for the business model, and according to Marcel would look quite different to those on the market today. Not only could connectivity and monitoring hardware be integrated, but because the product is differentiated on the service it provides, rather than unnecessary features or pseudo-technologies, the resulting appliance could be simpler and more user-friendly.
We need to start doing this without changing the design principles behind products themselves. If there’s not a business model or market for new models, then there is no incentive to redesign.
This business model offers multiple benefits, both to the user and more widely. Marcel notes how consumers do have an important role in bringing about progress, but only when enabled by a suitable business model. For while a large proportion of the public is aware of the need to make better buying choices in terms of energy use, materials or ethics, often their ability to influence these factors is actually very low, and they are unable to visualise or quantify the impact of the ‘right’ choice. So Bundles aims to go beyond generic advice, to using Internet of Things data to enable customised performance tweaks and continuous improvement; optimising machine load, cycle duration, temperature and detergent use, all variables that can waste money for the user and damage appliances. In this way, not only do customers get household jobs done in an easy and affordable manner, but there are wider economic benefits. In addition to energy savings, the ability to monitor, maintain, repair and refurbish the higher quality machine preserves product integrity for multiple cycles, breaking from the current resource-intensive linear model.