Use over ownership: a new model for a more efficient circular economy

Now that we are firmly in the age of digitalisation and the sharing economy, it is a good time to review existing business models. We are moving more towards ‘use’ over ‘ownership’, with all the flexibility, personalisation and closed-loop benefits this offers. As the new business model at V-ZUG, Product as a Service (PaaS) is designed to meet these requirements. Instead of buying household appliances, customers can sign a lease agreement with V-ZUG. Alongside commissioning and installation, this agreement includes maintenance and servicing and the replacement of faulty parts. This is because the appliances – from washing machines to tumble dryers – remain the property of V-ZUG. This model will enable us to maximise these appliances’ added value throughout their service life and extend their lifetime by providing maintenance and upgrading devices and components as required. Most importantly, however, this model enables us to close the loop. While our disposal partner and the Swiss waste disposal network do already take care of goods recycling and disposal based on clean processes, we are committed to ensuring products are reused more often – which is why we are overseeing the process and channelling our findings into various development trajectories. And as V-ZUG takes appliances off customers’ hands when they no longer need them or would prefer an alternative product, we can prevent those appliances being disposed of too early.

A model for the future?

Real estate management company Proreal is one market player that is excited about the service. For its new ‘Im Fink’ property in Thalwil, Proreal concluded a service contract with V-ZUG for 50+ washer-dryer towers. Adrian Gattiker, developer of the property and Chairman of Proreal, is convinced: “For real estate managers, V-ZUG’s Product as a Service is the model of the future. We no longer need to contend with warranties or repairs. Instead, we can use the service contract to calculate our expenses much more precisely. At the same time, it improves our customer service. Tenants can now contact V-ZUG directly to arrange a call-out if they have any issues with appliances.” Désirée Schneider, Head of Site Management at Proreal, likewise believes the signs are positive: “The model works extremely well, especially now that our tenants are used to contacting V-ZUG directly.” And as for matters relating to sustainability? “For Proreal’s management team and for me personally, sustainability is a critical topic that will only become more important in the future. By contrast, there is comparatively little interest in this topic among tenants. What we need to do now is make people more aware of the issue.”

Tenants benefit from services offered by V-ZUG

A property owned by SBB Immobilien in Basel was equipped with washing machines and tumble dryers under the V-ZUG Product as a Service contract, with the appliances remaining the property of V-ZUG. “The V-ZUG service contract is a way for us to test an alternative to buying appliances for properties managed by SBB Immobilien. The outcome of a standard tender process would usually be to choose the service at the lowest price, which often leads to compromises on quality and sustainability,” explains Samuel Pillichody, overall project manager for SBB Immobilien Development Region Mitte. “In fitting our 3Johann residential building in Basel with appliances, V-ZUG remains in possession of the equipment and is responsible for all servicing, repairs and recycling. In other words, our tenants benefit directly from the brand-name service offered by V-ZUG’s team,” states Pillichody.

At present, V-ZUG is tailoring its Product as a Service model to business customers such as real estate management companies first and foremost. Other areas of application are currently being piloted.