Is Regulation on Obsolescence Already Obsolete?

By Jayne Scuncio December 29, 2016

By Philippe Van Hove, VP Western Europe at Zuora, in Le Monde (originally published in French)

For Philippe Van Hove, the underwriting economy, by engaging the manufacturer in a closer and lasting relationship with his client, could be the best bulwark against the scheduled obsolescence.
The legal provisions related to the scheduled obsolescence, included in the Hamon Consumption Act, in harmony with the Energy Transition Act (both voted in 2015), were welcomed last year unanimously. They have combined this practice, which is now considered an offense of rather dissuasive sanctions and has had the merit of clearly defining the various forms of obsolescence that can be implemented deliberately by a manufacturer to limit the lifetime of its products.

Nevertheless, its application remains complex, and indeed, in fact, no manufacturer has been condemned to date. At the same time, with the rise of new models of consumption, first of all the subscription, one can legitimately question the rapid obsolescence of such a law.

The will of a manufacturer is of course to maximize its sales. In theory, some may have been tempted by the scheduled obsolescence, considering that the faster the product would break down, the more their sales figures would increase.


Economy of subscription

If one takes the perspective of the economy of the subscription, the reasoning is reversed. The manufacturer who rents his product has every interest to make it last as long as possible, in order to perpetuate the customer relationship. A reasoning similar to that of Seb, which, having launched in 2015 an offer to rent culinary appliances, recently announced that all of its products would now be designed to be easily repairable. Customer satisfaction becomes a more important objective than the profitability of a range of products.

When you buy a car, it’s mostly for several years. If it does not suit us, we can sell it, but by agreeing to record a loss. The younger generation rejects this model. They prefer to have a utility car on weekdays, a van for the holidays and a uber for the weekend. The subscription formula takes on its full meaning here. It is the same reasoning that now encourages the CIC to offer its customers a rental offer for smartphones. All the more so as the manufacturers embellish it with services, which become so many advantages.


Customer loyalty

In addition to the question of smoothing out expense, the business model of underwriting differs from that of sales by services that the manufacturer can imagine in order to build customer loyalty, while taking a sustainable development perspective; A fortiori as soon as the scheduled obsolescence is considered an offense. And, in this regard, they compete creatively to allow the customer to freely go up or down range, take a break in the subscription, temporarily adapt the tariff, and so on.

Indeed, under the economy of underwriting, the relationship evolves with the need: a couple who has just had twins needs a more powerful washing machine. Similarly, when children leave the family home, the need for laundry is less frequent. The parents can therefore change, whereas traditionally, we wait for the end of life of the device to buy a new one. The subscription thus appears as a way not only to easily access new products (or to prioritize a purchase), but also to reconcile its pace of consumption with its ecological requirements or simply the constraints of life.


Protection of the planet

Subscription is one of the components of the circular economy that establishes a virtuous circle around the use of products. When the consumer wishes to change the product, not only does the manufacturer offer a newer one, but there is no change in the subscription, but the old product after having been checked and repackaged can be rented under more advantageous conditions. Another consumer. While under the effect of marketing, the life of the products tended to decrease, the subscription extends it enormously.

According to ADEME , “the circular economy aims to reduce waste of resources and environmental impact while increasing efficiency at all stages of the commodity economy” in the context where the conjunction of Several factors – demographic development, global consumption growth, the end of oil reserves – make it impossible to maintain the same patterns of consumption.

Over the last fifteen quarters, the subscription economy has grown at a rate of 15% per year; Four times faster than growth in the distribution sector. If consumers prefer the model, it is to be part of the struggle for the protection of the planet, but also to find a way to get around the obsolescence programmed by the manufacturers. If the law can act as a safeguard, the evolution of consumption patterns, encouraged by massive adherence to ecological principles, ultimately renders it superfluous.