Companies are moving towards adaptable products to meet customer value and environmental sustainability demands. This shift reduces waste and enhances customer loyalty while maintaining profitability.
Examples include shoes that expand in size for children, a bicycle with adjustable parts that grows with the child, and a tennis racket that provides feedback to improve the player's performance.
While companies may sell fewer units, they can charge higher prices for adaptable products, maintain gross margins, and create additional revenue streams through services and brand communities.
Challenges include security concerns from software updates, the need for continuous customer engagement, and the potential for overcharging or annoying customers with excessive functionality.
Design processes focus on pre-configuring hardware or software to adapt to future customer needs, making products modular, and using software updates to enhance functionality over time.
Leading companies include Tesla, John Deere, Rolls-Royce, Honeywell, and startups like Areto (shoe company), Fairphone (modular smartphones), and Vue (smart glass).
Companies like Radio Flyer and Fairphone have seen significant revenue growth, with Radio Flyer's profits growing at 10% compounded annually, and Fairphone increasing sales by 50% in one year.
Companies should track customer engagement duration, revenue per customer over time, and environmental impact reduction to quantify the benefits of avoiding planned obsolescence.
Many companies make money by selling goods that need to be constantly replaced; think fast fashion, or tech devices that come out in new versions each year. But according to Vijay Govindarajan, professor at Dartmouth's Tuck School of Business, smart organizations are increasingly eschewing that strategy for one focused on products that grow with the consumer through creative design or software updates. He shares several examples and explains how this approach can deliver more value for the buyer – and for the business – over the long term. Govindarajan is the coauthor of the HBR article "Design Products That Won't Become Obsolete."