Background

The linear model of take, make, and dispose resources and materials have struck a dev-astating blow to the environment (Braungart et al., 2007). This led to an increased atten-tion from the governments to incubate circular economies as both policies and business concepts (EMF, 2012; Stahel, 2016). As a result, product and service offering from all types of circular economy business models can be found in many shops. Similar to the linear economy, the circular economy refers to the flow of production. Instead of dispos-ing the product at the end of its lifecycle, circular economy recirculates it through either reuse, recycle or reduce. While the business and organizational aspects of circular econ-omy have been focused in academia (Bocken et al., 2016; Lüdeke-Freund et al., 2019;

Ranta, 2016; Ruggieri et al., 2016; Su et al., 2013), there is a gap in the literature about the perspective and experience of the consumers of the circular economy.

The importance of customer experience is undeniable to companies in the linear econ-omy around the world. Leading brands such as Dell, Starbucks, and Apple have cus-tomer experience at the center of their managerial focus and have acknowledged the successful results of their efforts. Customer experience is detrimental for building loyalty to brands, channels and services (Badgett et al., 2007). Simultaneously, the literature in circular economy recognizes the importance of the customers, yet their experience have been largely understudied. Lieder et al. (2018) highlighted the importance of customer’s acceptance of the circular economy concepts in establishing a successful business. The influence of the customer’s voice in organizational green innovation has also been in-vestigated by Huang et al. (2016). By turning the attention toward customer experience in brands that operate in the circular economy, these businesses could increase their customer loyalty and general success. Ultimately, the circular economy ecosystem can grow further in size and popularity, which would benefit the environment and society.

When looking into the customer experience in the circular economy, the consumers’ val-ues may be significant influence factors. In this context, the valval-ues are divided into ego-istic values, which are individualego-istic needs, and biospheric values, which are concerns over environmental and societal sustainability De Groot & Steg (2008). In linear econ-omy, the biospheric values are often overlooked. However, the values the consumers

have toward individual and societal needs may have an impact on the customer experi-ence as they engage with circular economy businesses. This potential linkage between consumers’ values and experience will be explored in this thesis.

In the traditional linear economy, there is an abundant of customer experience literature that come in different fields, such as service marketing (Mary Jo Bitner, 1990), consumer research (Arnould & Price, 1993), service-dominant logic (Vargo & Lusch, 2008), service design (Patrício et al., 2008), online marketing (Novak et al., 2000), branding (Brakus et al., 2009), and experiential marketing (Schmitt, 1999). This plethora of studies in experi-ence evolved along with the emergexperi-ence of experiexperi-ence economy. One widely accepted definition is the dimensional experiences. The dimensional view on experience is a widely accepted definition, which identifies five types of experience: sensory, affective, cognitive, behavioral, and social experiences (Brakus et al., 2009; Schmitt, 1999;

Verhoef et al., 2009).

In the current era of consumerism, the need to personalize value offerings has trans-formed the economy of trading goods into the services and solution economy and more recently experience economy (B.J. Pine & Gilmore, 2013). According to Pine & Gilmore (2013), the experience economy is the personally customized and intriguing service ex-periences and value arising from the evaluation of exex-periences. As a result, strategies that improve the service experience could provide companies with ample of competitive advantages that enable the organizations to thrive in the experience economy (Verhoef et al., 2009). For that reason, the leading management objective is to create a strong customer experience (Lemon & Verhoef, 2016).

Similar to the linear economy, customer experience is still highly relevant in the circular economy. Regardless of whether a company manufactures and disposes its resources linearly or circularly, one of its priorities remains to be profit. Focusing on the customer experience directly contributes to this goal. Furthermore, it advances the idea that the circular economy can be a financially viable alternative to the linear economy. This could lead to the steady increase in both the emergence of circular economy business and funding to such businesses. As a result, the diffusion of sustainable products and ser-vices can be more rapid and longer when the circular economy company receives more resources and revenue. It then becomes a positive upward spiral that benefits the circular economy businesses, their customers and the environment.

Yet the number of studies that apply these theories in the context of the circular economy is scarce. On the other hand, it would be inaccurate to state that no researcher has investigated the consumer experience in different aspects within the circular economy.

Figure 1 illustrates the intersection between other literature streams and the circular economy.

Figure 1. Intersection between circular economy and other literature fields.

The brands discussed in green consumerism are associated with specific circular econ-omy business models that targets customers who have interest in eco-friendliness.

These business model typologies include recycling, organic feedstock extraction, and cascading and repurposing. Green consumerism has gained significant momentum as companies are going “green” (Parker et al., 2010). According to Hartmann et al. (2005), the term “green” is used flexibly for brands that relate to the reduced environmental im-pact and are perceived to be environmentally sound. The brand experience is applied into green businesses, and thus, introduces the concept of green branding experience (Hartmann et al., 2005; Wu et al., 2018). Similarly, several researchers have studied the green and/or socially responsible consumerism phenomenon (Gupta & Ogden, 2009;

Matthes & Wonneberger, 2014; Moisander, 2007; Schuitema & De Groot, 2015; Shobeiri et al., 2016; Tan et al., 2016).

Meanwhile, the circular economy also has another set of business model that is intended for cost-conscious consumers. These business model typologies comprise of repair and maintenance, reuse and redistribute, and refurbish and remanufacture. Similarly, there is an emerging stream of literature that studies one of these areas of the circular econ-omy, known as the sharing economy. The sharing economy is a social and economic movement that shares unused idea resources with other consumers to reduce waste (Belk, 2007). It can be argued that the sharing economy is synonymous with the reuse

and redistribute business model, as they share similar behaviors and environmental im-pact (Barnes & Mattsson, 2016). Thus, researchers who study the customer experience in the sharing economy are also contributing to the customer experience literature in the circular economy. However, there exists little research on customer experience in the sharing economy (He et al., 2019; Netsiporuk, 2016).

This study focuses more on the consumer level, instead of organizational or institutional.

It is understandable that the circular economy concepts may not be commonly used amongst consumers. Instead, more “user-friendly” terms like sharing economy or green consumerism are more popular in consumer-oriented research fields. Nonetheless, in specific contexts, the concepts from one field can be applied directly to the other. In this thesis, literature related to customer experience in green consumerism will be utilized.

As a result, the importance of this study is highlighted due to three reasons. First, Finland is striving to become the global leader of the circular economy movement by 2025 (Sitra, 2016). Thus, it is important to garner knowledge and know-how from all aspects of the circular economy, from the macro ecosystem level all the way to the micro consumer level. Findings on customer experience literature would satisfy the micro consumer level of the big picture. Second, customer experience knowledge in circular economy will give a competitive edge for firms that operate in the circular economy. Customer experience is crucial in the current society, thus, firms can benefit significantly from forming strong and lasting customer experience (Pine & Gilmore, 1998). There is a lack of papers in the research field of customer experience in the circular economy. Therefore, it is pivotal that knowledge in this field or research is developed. Third, this study contributes insights to customer experience and values in specifically recycle business model and reuse and redistribute business model. While the general knowledge would benefit circular econ-omy in general, one step further into these two typologies of the business models would provide more customized insights for the businesses that operate in these spaces.