Keywords

1 Introduction

The Circular Economy (CE) can yield cost savings and can result in significant environmental benefits [1]. Since the CE has the potential to create economic benefits for the manufacturing industry in which environmental sustainability is embedded, many companies are considering implementing Circular Manufacturing Systems (CMS), where the products and business models are designed intentionally to close the loop of products and/or components [2]. To succeed with the CMS approach the Original Equipment Manufacturers (OEM) need to retain the ownership of the products and adopt innovative business models that promote trading functions of a product as a service instead of selling [3]. This approach of acquiring functions only when needed opens up the possibility to share the same products with multiple users. For an OEM that has built its business on a conventional sales model over the decades, this shift may be too radical. Therefore, for the manufacturers, it is important to understand consumers’ perceptions of the service-oriented business model such as leasing strollers in this case before entering this unknown territory. This paper presents a thorough understanding of consumers’ perceptions of leasing a stroller instead of buying one. For a product like a baby stroller, the service/function means ensuring mobility with infants without needing to own a stroller. This case study is interesting from a product-service system perspective as it represents a high-priced product that has a short use time and high recovery value at the end of its lifecycle.

2 Research Review

Service-oriented business models are one of the essential instruments to implement CMS. However, deploying service-oriented business models requires radical changes in the firm’s business operations [4]; where consumer perceptions to adopt these business models is an important element to consider. Camacho-Otero et al. (2018) claimed that personal characteristics drive consumption. For example, consumers concerned about social status prefer branded products and some consumers choose used products to gain status by distinguishing themselves from others [6].

In general, a lack of knowledge of the possible values and risks of service-oriented business models is an obstacle in putting service-oriented business models into practice [7,8,9]. Information about the total cost of ownership, quality of products, environmental benefits, and additional services (i.e. whether service and maintenance of products are included or not) is crucial for consumers’ decision making [5, 7,8,9]. Schallehn et al. (2019) and Camacho-Otero et al. (2018) highlighted that positive experiences from interaction with the service provider are important in embracing and promoting service-oriented business models. The positive experience is a result of ensuring economic value, uniqueness, environmental friendliness, and convenience. Singh and Giacosa, (2019) identified that Individual, Social, and Cultural aspects influence acceptance of the circular business model. Cultural aspects, such as negative perceptions about sharing, accepting used products and resistance to change play a major role in the success of a service-oriented business [5, 8,9,10].

Mont et al. (2006) argue that the existence of large second-hand markets for baby strollers is a sign of the positive attitude of young parents to buy used products. Leasing strollers provide the flexibility of adjusting the needs under the service contract and make premium products affordable. Moreover, through this business model, consumers do not need to store the strollers or spend time selling them. The environmental benefits of leasing baby strollers lie in prolonging the product use phase, reducing the number of produced products, and improving the end of life strategies [11]. Van Weelden et al. (2016) concluded that lack of awareness, unclear definition of refurbishment, and perceived risks affect the acceptance of refurbished mobile phones. Poppelaars et al. (2018) concluded that consumers reject access-based smartphone services due to a lack of awareness about the smartphone access service, poor image of the service provider, lack of ownership, and sustainability concerns. D’Agostin et al. (2020) and Day et al. (2020) respectively concluded that environmental concerns, as well as a healthy lifestyle and the monetary perspective of the service-oriented business models, are the main drivers of adopting it. They also pointed out that additional options could be considered as convenience or burden. For some consumers, ownership of the products is more important [8, 15] and the lack of ownership can often be regarded as being dependent on the service provider [7, 15].

3 Research Method

This research is conducted by applying a research method that combines both survey research and research review. Survey research is applied for acquiring information about consumers’ opinions and attitudes toward leasing a stroller. The review process is used for exploration to gain insights into relevant research. The findings of this review process are used to strengthen the survey results.

The research started with the main assumption that there are three segments of consumers a) Consumers who will always lease a stroller, b) Consumers who may or may not lease a stroller, and c) Consumers who will never lease a stroller. To limit the scope, convenience and environmental benefits are assumed to be the additional value propositions. Furthermore, the research also assumed that consumers accept used strollers that are restored to new-like conditions if they are environmentally sustainable and maintain hygiene.

To conduct the survey, two sets of questionnaires are designed as the base for face-to-face interviews. One set is designed for the parents who already own a stroller and the other set is for parents expecting a child and considering acquiring a stroller. The survey is designed mainly with closed-ended questions with two open-ended questions to acquire a wider understanding of what motivates or discourages a consumer to opt for the leasing option [17]. The questions are organized in a logical order creating a flow chart structure where a respondent needs to respond either yes or no to each question. Depending on the responses, different respondents follow different flows of questions until the survey ends. Due to this relatively complex structure of the survey and to ensure a high response rate the survey was only conducted in presence of a data collector. A survey among 200 parents in Stockholm was conducted and 181 respondents completed the questionnaire. Of these 181 respondents, 100 are parents having a child who already owns a stroller and the remaining 81 are parents who are expecting a child and considering acquiring a stroller for their future child.

4 Results

As Fig. 1 shows, 39% of the respondents (a total of 181 respondents) have shown positive interest to lease a stroller, when no further information about additional values or challenges with the leasing offer was communicated. However, the respondents responded differently when these additional values and challenges with the leasing offer were exposed, which is presented in the following sub-sections.

4.1 Response of the Parents Having a Child Who Already Own a Stroller

In case of parents having a child who already owns a stroller of a specific brand, 42% (42 respondents out of 100) respondents have shown positive interest to lease a stroller as shown in Fig. 2. Out of these 42 respondents, 31 responded negatively to the leasing offer if the total cost of ownership during the leasing period is higher than buying a stroller, as presented in Fig. 3. However, 8 respondents out of 31 remained positive to leasing offer when convenience is offered as an added value and an additional 16 respondents out of the remaining 23 critical respondents turned positive to leasing offer for a product that is environment friendly. Ultimately, 7 respondents remained critical to the higher cost of leasing, who consider the cost of leasing is more important than convenience or an environment-friendly product. In this group, 35 respondents remained positive (adding all positive responses from Fig. 3) and 7 remained negative to leasing offer respectively.

Fig. 1.
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The distribution of consumers willing and not willing to lease a stroller.

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Fig. 2.
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The ratio of respondents (parents having a child) willing and not willing to lease a stroller

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Fig. 3.
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The number of respondents to the added values, who initially showed positive interest in the leasing offer

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Fig. 4.
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The number of the respondents to the added values who initially shown negative interest.

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The 58 respondents who initially remained negative to the leasing offer responded as shown in Fig. 4. Out of these 58, 20 respondents became positive to the leasing offer when convenience is offered as an additional value, but only 7 out of 20 remained positive when the total cost of ownership during the leasing period said to be higher than the cost of buying the stroller. However, 5 additional respondents out of 13 remaining critical ones became inclined to the leasing offer when the offer included an environment-friendly product. In total, 12 respondents in this group turned positive to the leasing offer when convenience and an environment-friendly product are offered and 8 respondents remained critical of the higher cost of leasing resulting in 46 respondents out of 58, i.e., 38 in the beginning and 8 considering all other motivating factors, being negative to the leasing offer.

To summarise the results of the responses received from the parents having a child and already owning a stroller, 47 (i.e., 35 out of 42 and 12 out of 58) (47%) respondents out of 100 are willing to accept a leasing offer when convenience and an environment-friendly product is made part of the value proposition. 53 respondents (53%) are not willing to accept leasing as the offer in this particular case. To summarise (as shown in Fig. 5), 11% are in favour of leasing (11 out of 100 respondents were positive in all conditions, see Fig. 3), 38% are not in favour of leasing (38 out of 100 respondents were negative even if they receive more convenience, see Fig. 4) and the largest group, i.e. 51% is in favour of evaluating the leasing offer in terms of price, convenience, and environmental image. The survey also revealed that 71% (30 out of 42 respondents) of the respondents who are positive about leasing are also open to leasing a used product that is remanufactured or refurbished.

Fig. 5.
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The distribution of the consumers in the three categories; consumers who will always lease, may or may not lease, and never lease.

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Fig. 6.
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The ratio of respondents (parents expecting a child) willing and not willing to lease a stroller

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4.2 Response of the Parents Expecting a Child Who Do not Own a Stroller

In the case of parents expecting a child, 36% (29 respondents out of 81) respondents have shown positive interest to lease a stroller as shown in Fig. 6. Out of these 29 respondents, 23 responded negatively to the leasing offer if the total cost of ownership during the leasing period is higher than buying a stroller. However, as shown in Fig. 7, 8 respondents out of 23 remained positive about leasing offer when convenience is offered as an added value and an additional 11 respondents out of the remaining 15 critical respondents turned positive to leasing offer for a product that is environment-friendly. Ultimately, 4 respondents remained critical to the higher cost of leasing, who see the cost of leasing is more important than convenience or an environment-friendly product. In this group, 25 respondents remained positive and 4 remained negative to leasing offer respectively.

The 52 respondents who initially remained negative to the leasing offer responded as shown in Fig. 8, out of these 52, 19 respondents became positive to the leasing offer when convenience is offered as an additional value, but only 8 out of 19 remained positive when the total cost of ownership during the leasing period said to be higher than the cost of buying the stroller. However, 8 additional respondents out of 11 remaining critical ones became inclined to leasing when the leasing offer included an environment-friendly product. In total, 16 respondents in this group turned positive to the leasing offer when convenience and an environment-friendly product are offered as the additional values and 3 respondents remained critical of the higher cost of leasing resulting in 36 respondents, i.e., 33 in the beginning and 3 considering all other factors, being negative to the leasing offer.

To summarise the result of the responses received from the parents expecting a child who do not own a stroller, 41 (i.e., 25 out of 29 and 16 out of 52) (51%) respondents out of 81 are willing to accept leasing.

Fig. 7.
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The number of the respondents to the added values, who initially shown positive interest in the lease offer

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Fig. 8.
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The number of respondents to the added values who initially showed negative interest in the leasing offer.

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offer when convenience and an environment-friendly product is made part of the value proposition. Furthermore, this group of consumers is willing to pay extra for this additional value proposition. 40 (49%) respondents do not consider leasing as an offer of their choice, of which 7 (i.e., 4 out of 23, see Fig. 7, and 3 out of 19, see Fig. 8) refused to lease if the cost of ownership of leasing is higher than buying a stroller. To summarise, 7% is in favour of leasing (6 out of 81 respondents were positive in all conditions, see Fig. 7), 41% are not in favour of leasing (33 out of 81 respondents were negative even if tey receive more convenience, see Fig. 8) and the largest group, i.e. 52% is in favour of evaluating the leasing offer in terms of price, convenience, and environmental image. The survey also revealed that 79% (23 out of 29 respondents) of the respondents who are positive to leasing are also open to lease a used product that is remanufactured or refurbished.

5 Discussion and Conclusions

In this paper, consumers’ perceptions of leasing baby strollers have been studied. This research quantifies the distribution of the consumers in Sweden in three categories, naming consumers who will always lease, consumers who may or may not lease, and consumers who will never lease a stroller based on the survey research. This research, as well as previous studies, confirms that competitive price is one of the important attributes in deciding whether to go for leasing or not. This research further confirms that convenience and environmental-friendly products increase consumers’ tendency to lease these products.

The survey results in both cases (parents own a stroller and parents do not own a stroller) show that there is a large number of consumers (38% and 41% respectively) who are not willing to lease a stroller. The three key reasons for not leasing or leasing a stroller are listed in Table 1. This also confirms that environmental aspects are not key decision-making factors but can create significant value. There is a small segment (11% and 7%) of consumers willing to go for leasing unconditionally. For this segment, the possibility to pay monthly, return the stroller after use, and the possibility to change the stroller are the three key reasons (Table 1) for leasing.

Table 1. Three key reasons for not leasing or leasing a stroller are identified through an open-ended question in the survey
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The largest segment (i.e. 51% and 52% respectively) is the group of consumers that makes a conscious decision by comparing existing offers. For this segment, the total cost of ownership is the most important factor in decision-making. However, a large portion of this segment is willing to pay extra for convenience and they highly value environmental-friendly products. Respectively about 70% (who own a stroller) and 83% (who do not own a stroller) of this segment are willing to go for leasing if the convenience and an environmental-friendly product is part of the value propositions. This finding also confirms that the assumption, that “consumers in Sweden value convenience and an envirFonmentally sustainable product as part of the leasing offer” mentioned at the beginning of this paper is true. Furthermore, this study concludes that whether a consumer owns a stroller or plans to acquire a stroller does not have any significant influence on the perceptions about leasing a stroller instead of buying. All consumers in both categories perceive the leasing offer and its cost, convenience, and environmental-friendly products similarly.