The challenge: Baby products need to be replaced – i.e. sold or disposed of – at an incredibly fast pace to keep up with a child’s continuous growth. A challenging task for parents, who have to make room for the next range of products to suit their child’s next development phase every few months. As a result, these products – and the resources that go into them – are often ineffectively used.
The response: Tiny Library provides a range of baby products as a service to parents– think co-sleepers, strollers, bouncing chairs and baby carriers. Parents only pay for the temporary time products are used, saving time, money and storage in the process.
How does it work? Parents pay a monthly fee for each product they rent. When their kids outgrow these products, parents can return them back to Tiny Library. After a check, cleaning and any necessary refurbishments, the products are made available to be used by the next family in line. When no longer fit for reuse via the platform, products are investigated for recycling purposes or donated to charity. Brands that offer their products as a service through the platform retain ownership of their products, pay a set up fee and receive part of the recurring revenue per customer.
The positive impact: By keeping baby products in use longer, Tiny Library is providing a sustainable alternative to parents. They are potentially displacing the need for new production and consumption, and making it easier for brands to start their transition to circular business models and products, whereby products are designed for longer use, increased repairability, and for recycling.
Baby products may just be the poster child for unavoidable obsolescence: as children grow up, their clothes, toys, and products need to be replaced or disposed of at an incredibly fast pace to keep up with their changing needs. As a result, these products might go to landfill too early or end up collecting dust in the back of a wardrobe or storage unit. If they are sold or lent, this is not often a priority in the face of the many other pressing challenges that parents face. This in turn means products do not immediately make it back into circulation when they are no longer needed.
This is an incredibly ineffective use of resources, as a lot of these products are often still in great condition. As such, they could benefit many other children – and their parents – and potentially displace the need for new production by being kept in circulation longer and faster.
The baby product industry is not a total stranger to the world of reuse: parents often lend or give away their babies’ clothes and toys to friends and family, or they resell the more expensive products they have purchased when they no longer need it. A simple search on Marktplaats alone – one of the largest online marketplace in the Netherlands – yields over 1 million listings for used baby clothes, toys, and products at the time of writing, for example.
Manufacturers have long paid little to no attention to these informal reuse networks and to the second-hand market in general. As a result, companies have had little insight into what happens to their products past the first point-of-sale and little incentive to take second, third or fourth users into account when designing their products.
Now, brands and manufacturers are waking up to the opportunity in circular business models like rental or resale. New Product-as-a-Service (PaaS) models are on the rise across industries, with innovators such as ThredUP, CaaStle and The Renewal Workshop proving that they can work at scale for the apparel industry and with many early pilots in other industries from laundry and phones to roads and facades.
But for a product to survive–and thrive–throughout multiple lifecycles, it first needs to have been designed to do so. This means it needs to have been designed to last and to be easy to repair or to refurbish. Brands stand to see significant financial and environmental benefits in doing so: the longer the product life cycle, the more they can earn on that single product and the less they have to rely on virgin resources. Longer-lasting products also make brands more resilient to sudden market shocks and linear risks such as resource scarcity.
Puck Middelkoop, circular economy expert and Tiny Libraryrepresentative, was alerted to the waste–of resources and time–inherent to modern parenting when she herself became a parent: 'It’s overwhelming when you start spending time browsing kids products. A sustainable alternative to buying new for parents would be of great help!’. Julie Munneke shares the same vision and launched Tiny Library: a platform for parents to rent baby products, and for brands to offer their products as a service.
Tiny Library’s model answers the needs of parents who want more sustainable options for their children, who don't want to spend too much time managing baby products and who don’t want to break the bank over products they have no real room or extended need for.
For brands, this is an opportunity to receive recurring revenue per customer per product, to build closer relationships with their users, to learn from the continuous feedback loops that are established as a result, and to optimise the use of their products, which are often already fit for extended use. As their revenue increases along a products’ lifetime, a rental model also provides them with an incentive to further improve their products’ designs to optimise longevity, repairability, and cyclability.
Circular business models promise to do more with less, but not all products-as-a-service business models automatically come with positive impact built-in. Only when a model is designed with the intent to displace new production and consumption, divert products from landfill, incorporate circular design, and build out an end-of-use value chain that benefits people and the planet, can we deem them ‘circular’, according to Gwen Cunningham, Circle Textiles Programme Lead at Circle Economy.
For more than a year, Tiny Library has acted as an intermediary between brands and parents, taking on ownership of the products they rent out, including their take-back, maintenance, redistribution and disposal at end-of-life. To date, they have already enabled 300 products from 15 different brands to stay in the loop longer, with some products already in use for the third or fourth time. In the future, they are also looking to work out more detailed impact metrics to evaluate the positive impact of their model.
Their ultimate aim, however, is to encourage brands to take responsibility for their own products so as to incentivise circular design and material recycling at the end of the product’s life. This is the focus of a pilot with Easywalker, a Dutch stroller brand, where the manufacturer will retain ownership of the products they lease through Tiny Library.
Easywalker aims to create durable, quality products that can last beyond the average use time a single family would make of them. To make sure their products actually stay in active use for as long as possible, they are now looking to lease models a potential solution. “New business models such as rental have made a significant step in the past year. This mainly concerns making the life of customers easier, whereby convenience and service are included in the price. We want to prepare for this transition by making our products lease-proof” - Tim Grooteman, Managing Director Easywalker
Partnering with service providers whose core competency lies in the operational mechanics of ensuring a product is fit for reuse can smooth out the process for companies interested in launching a reuse model, according to outdoor gear brand REI in a conversation with Greenbiz. REI partnered with The Renewal Workshop to launch a resale programme back in 2018.
In that way, by taking care of the cleaning, refurbishment, reverse logistics and redistribution of products, Tiny Libraryis breaking down the operational barriers for brands to adopt a circular business model.
Before circular solution providers like Tiny Library can succeed on the market, they often face a host of challenges unique to their situation. Securing funding, for example, is especially tricky, as traditional financial modelling methods fail to capture the advantages of circular business models and often lead investors to perceive them as high risk market propositions.
Thanks to the PaaS kit – a guide to PaaS models developed by Circle Economy – Tiny Library was able to understand investors’ perspectives and to effectively address some of their perceived risks in pitching their business model. For other innovators developing a PaaS model, Puck recommends: “It's very important to show your strengths, personally and as a team, and to make sure you make any assumptions you’ve made in your financial forecasting clear to investors. Of course, the entire business plan should also be in place. Use example pitch decks from other startups, follow an investment ready programme, but also consult people that are familiar with the investment industry.”
What about the brands looking to adopt a circular business model themselves? Puck Middelkoop’s recommendations are three-fold:
Interested in adopting a circular business model for your baby product brand? Get in touch with Tiny Library at https://tinylibrary.nl/
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