Direct-to-Consumer: Whirlpool Corp’s Certified Refurb Strategy
How do you build a successful certified refurb program for major appliances?
In this episode, Samantha Truesdell, Enterprise Circularity and Climate Strategy Manager, and Caio Doranti, Global Sustainability Senior Manager at Whirlpool Corporation, explain how Whirlpool launched a certified refurbishment program for large home appliances, selling returned units direct to consumer through brand websites. The episode is co-hosted by Karel J. Golta, Executive Director at INDEED Innovation.
The conversation looks at how Whirlpool evaluated circular business model opportunities and why certified refurb was selected as one of the first to execute.
What you’ll hear in this episode:
- Whirlpool’s enterprise circularity framework and the criteria used to evaluate and prioritize circular business models
- How the certified refurb program works, from returned unit inspection and grading to resale through direct-to-consumer channels
- The revenue case for certified refurb and how the direct-to-consumer model affects margin
The episode also covers internal stakeholder alignment, pilot-phase KPIs, and what Whirlpool expects to learn as geographic coverage expands in phase two.
This is the third episode in the series Irresistible Circular Business, sponsored by INDEED Innovation, the Global Design and Innovation Firm pioneering the Circular Economy. The series showcases business practices that deliver irresistible commercial and circular results, with examples from different industries across different R-strategies.
Video Impression
People
Samantha Truesdell, Enterprise Circularity & Climate Strategy Manager
https://www.linkedin.com/in/samantha-truesdell-08a28156/
Caio Doranti, Global Sustainability Senior Manager at Whirlpool Corporation
https://www.linkedin.com/in/caiodoranti/
Karel J. Golta, Executive Director at INDEED Innovation.
https://www.linkedin.com/in/karelgolta/
Patrick Hypscher, Circular Business Strategist, PaaS Expert
https://www.linkedin.com/in/hypscher/
Chapters
00:00 Intro
06:00 Whirlpool’s Circularity Ambition
10:24 Developing the Certified Refurbished Program
13:33 Evaluation Criteria for Circular Strategies
15:30 Consumer Adoption of Circular Business Models
18:02 Deep Dive: The Certified Refurbishment Process
25:31 Commercial Benefits and Revenue Potential
28:18 Metrics and Learnings from the Pilot Phase
30:53 Building Internal Support and Partnerships
33:30 Translating Sustainability for Business Stakeholders
38:20 Making Circular Business Irresistible
41:13 Key Takeaways and Overcoming Barriers
47:26 The Broader Impact of Refurbishment
50:02 Outro
About
Whirlpool Corporation is a US-based global manufacturer of kitchen and laundry appliances headquartered in Benton Harbor, Michigan. Through brands such as Whirlpool, KitchenAid, JennAir, Maytag, Amana, Brastemp, Consul, and InSinkErator, the company serves households worldwide, reporting around 17–19 billion USD in annual sales and operating tens of manufacturing and technology research centers across the Americas and other regions.
On circularity, Whirlpool is integrating circular-economy principles into product design, use, and end‑of‑life, focusing on durability, repairability, recycled content, and recovery of materials. The company runs certified refurbishment centers that restore a large share of returned appliances for resale, helping extend product lifetimes and keep materials in use, and it complements this with initiatives such as water‑filter mail‑back recycling and take‑back of old appliances and packaging for material recycling instead of landfill.
Further Links
ReCommerce Playbook: https://www.indeed-innovation.com/the-recommerce-playbook-from-returns-to-revenue/
Whirlpool Corporation Corporate Responsibility Resource Center: https://cr.whirlpoolcorp.com/
Transcript
[00:00:00] Intro
Caio B. Doranti: It’s not difficult to visualize that this is a, a revenue stream for the company, right? So you are taking something that you would recycle, let’s say, put on the trash or, or going to to be a cost to the company. We are making revenue out of that.
Patrick Hypscher: My name is Patrick Hypscher and this is Circularity.fm, the podcast about understanding, building and managing circular business models. Well, here we are again at Irresistible Circular Business, the series that showcases the business practices that deliver irresistible commercial and circular results. We look at examples from different industries across different R strategies. Sponsoring partner of this series is INDEED Innovation, the Global Design and Innovation Firm, pioneering this circular economy. In each episode, a member of the INDEED Innovation team joins me as a co-host. The last episode with Johnson & Johnson explored the way in which take back and recycling can help with customer retention. Today we take you to North America and the home appliance industry. The market leader will share his approach to refurbishment, and if you’re listening regularly, you know the drill. If you want to get the actionable one pager about this conversation, sign up for the Circularity.fm newsletter. You can find it at www.Circularity.fm. After a background in political science and conservation ecology from the University of Michigan, she spent several years in account management before pivoting into the heart of corporate sustainability. Over the last six years, she has climbed the ranks at the Whirlpool Corporation, moving from indirect procurement into strategic leadership roles. Focused on global environmental assets. She has now been driving circular initiatives, uh, as the Enterprise Circularity and Climate Strategy Manager for the past five months. It’s a pleasure to have her with us. Welcome, Samantha.
[00:01:51] Meet Whirlpool’s Circularity Team
Samantha L. Truesdell: Thank you. Happy to be here.
Patrick Hypscher: Our second guest, um, has a bachelor’s degree in electrical engineering and an MBA, uh, and has spent over 13 years driving innovation within the Whirlpool Corporation. Uh, his career spans global walls and China, and Brazil, where has transitioned from technical product development and strategic planning into corporate responsibility. He currently spearhead these efforts globally, having served as the global sustainability senior manager for the past two years and two months. It’s great to have you here. Welcome, Caio
Caio B. Doranti: Oh, thanks. Nice to be here.
Patrick Hypscher: Our co-host for today, uh, has a education and product design, uh, and then built a career at the intersection of technology and human centered design. He gained a deep international experience at firms like Thompson Consumer Electronics. For the past 15 years, he has been at the helm of INDEED Innovation, an agency he founded to push the boundaries of sustainable transformation. He’s a global thought leader and circularity, speaker and innovator, and the co-host of today, Karel.
Karel J. Golta: Patrick, I’m super happy to be here. Hello everyone.
Patrick Hypscher: Guys, I have a question to kick it off. Uh, and this is about your personal preferences and experience. Uh, what is one of your last refurbished product?
Samantha L. Truesdell: Yeah, so for me that would be just this last summer. My, my mom has a little lake cottage about an hour from where we live. And, um, I need coffee. I need coffee every day. Um, but it’s very small. We don’t have much room, so we wanted to, to get a Keurig and I ended up getting a certified refurbished Keurig unit. And then also, I want to make sure we’re noting this, I learned how to use the reusable pods in those, so I am using the reusable pods with the grounds in the refurbished Keurig, and it’s worked out wonderfully for us.
Patrick Hypscher: So you’re going, going all the way
Samantha L. Truesdell: trying
Patrick Hypscher: Caio
Caio B. Doranti: yeah. S Sam needs coffee. I need wine. So my, I dunno if it’s my last one, but my favorite one is a 35 bottle wine cellar that I have in my home from one of our brands, uh, that I purchased probably four years ago. Um, and the nice thing is it’s our refurbished product. No issues so far. No maintenance. Maintenance needed. So very good condition. Product that I liked a lot.
Patrick Hypscher: And, and back then there wasn’t any refurbished program in place from, from you directly, right?
Caio B. Doranti: That’s correct. That’s correct, yes.
Patrick Hypscher: Okay, so you needed to fix that. We will come to that in a minute.
Karel J. Golta: Well actually, um, it is, um, a product that usually people wouldn’t consider about refurbishing. It’s a dog leash, so I, um. Organized that, uh, got it. And, and had it actually refurbished myself, um, because some, some special dog leagues can be quite expensive and special. And, uh, that’s where I, I went into my own refurbishment. It’s not super easy, but, uh, it’s, it’s actually fun. It’s a little bit of a, a tinkering and, and so on. So that makes a lot of fun as well.
[00:05:51] Whirlpool’s Circularity Framework
Patrick Hypscher: Sounds like an episode in itself. Um, let’s, uh, uh, zoom out, uh, but of course, connect, uh, to refurbishment and we in the white goods, uh, industry. And Whirlpool is, uh, one of the leading players, uh, uh, in the world. Um, when it comes to circularity, Sam, what’s Whirlpool’s ambition there?
Samantha L. Truesdell: Yeah, so we’ve, we’ve taken a number of different avenues for this over the years, you know, as our, our capabilities have shifted, our team has shifted and we’ve of course learned and, and grown over the years. But, you know, I’ll start with we’re, we’re very fortunate as an industry, you know, large home appliances and cars would also fall under this same umbrella where we primarily utilize. Steel and highly recyclable materials, right? That, that go into, um, the products that we make. So we have a little bit of, I don’t wanna say an advantage, but we’re fortunate in that we can find, you know, secondary homes and circular uses for the materials that go into our appliances. In the sense of, of steel and, you know, other types of metal components. We’ve had an eye on, um, circularity and material use for many years, and we have a circularity framework that I can expand on in a little bit. But we’ve of course been very involved in the, in the recycling standpoint of it. But then a couple years ago, we decided to reframe our strategy and, and zoom out a little bit and look at, you know, developing this circularity framework that, that looks at touching many more aspects of the business in general, um, and starting an enterprise circularity program, which, which is the program that, that I lead looking at, you know, what can we do in terms of circular business models? How can we find ways to really break that linear model of, you know, take, make and, and dispose and look for ways that we can both monetize circularity initiatives, but also use that toward our emissions metrics and our waste metrics.
Patrick Hypscher: And talking about emissions and at the same time businesses, um, in many companies, there are multiple motivations to drive circularity. What is it for you? And also to what extent?
Samantha L. Truesdell: Yeah, I know you’re saying what’s the main motivation, but being such a large global company, I would say there maybe isn’t one single main motivation when it comes to circularity. There’s, it’s, it’s a very interconnected topic and field, right. So, um, I’ll refer back to the circularity framework that I mentioned earlier, and this is public. Um, I believe this was first published in last year’s sustainability report, so the 2024 sustainability report. So this is publicly available for anyone who who wants to look it up. And we have that divided into three main categories. And then that enterprise circularity framework kind of touches on all of them and tries to draw those connections. So we look for maximizing circularity and optimizing efficiency in our units. You know, that’s, that’s a huge area for us. And if we had to prioritize you know, looking at the efficiency of our units and the efficiency, um, and use patterns of products in use, that’s far and away our biggest source of emission. So that’s one of our top priorities. And then of course, looking at optimizing the life lifetime of our appliances, um, and minimizing the waste and pollution. So, you know, we try to really touch upon all of those different areas and different members within our team take the lead on different aspects of that. And then looking at prioritizing, you know, within that strategy. So, of course looking for reuse opportunities, extending the useful life, that being the first priority, and, and as part of that repairability and reliability of the units, right. You know, that’s always going to be our top priority. Followed of course, by part recovery and things that we can do to, um, utilize as many components in their initial form into, you know, either repair or in our, um, parts inventory. And then the third being looking at optimizing that, that product end of life space. So what can we do to make sure that we are optimizing our recycling partnerships and having as little waste as we possibly can.
[00:10:10] Starting with Certified Refurbished Appliances
Karel J. Golta: Let me jump in here, Sam, because I think what is always interesting for other companies or other people to understand is how did you actually end up offering certified refurbished appliances? Because it usually doesn’t just happen, right? It, it, something needs to happen. And, and maybe you can fast track us through what, how did it get to where you are today?
Samantha L. Truesdell: Yeah, absolutely. So this started about two and a half years ago at this point in, its in its infancy and looking at circular business models. And, um, we did work with a consultancy to identify different opportunities within our existing business and where those key inflection points would be. Right? And so how we could work within our existing systems, work within our existing internal stakeholders and partnerships. And so this involved, you know, having in-depth interviews across the entire organization. So over 10 different functions within Whirlpool and over 30, I think we were up to 40 or so towards the end, individuals were involved in these stakeholder conversations. Um, we also paired that with consumer insights work. So we worked with our internal consumer insights team to go out and understand what do our customers, what do our consumers prioritize in the circularity space? Well, decoupling that from the word circularity, right? Especially with, um, you know, big, heavy, durable goods or home appliances. Many people are really prioritizing these, you know, circular, um, design principles and, you know, the principles of, of repairability and longevity without ever thinking about it as being a sustainability linked initiative. Right. So making sure that we were framing the topics in a way that they resonated with and that they were able to respond to and, and, you know, matching with their types of, um, terminologies or feedback types might be there. So that was a whole process and understanding, you know, where, where were the opportunities and we weren’t pigeonholing ourselves into certified, refurbished, or, you know, any particular type of initiative. At that point, it was more taking a broad approach and understanding where we could benefit from expanding our capabilities. Um, and we can talk about this more later in the podcast as well, but one of the things with certified refurbished is that we’ve been refurbishing our appliances in different ways for many years, you know, our KitchenAid small appliances have had a certified refurbished program for many years. Um, our return centers have been refurbishing products for many years, but we’ve never taken that step with our major appliance space to actually go through that certification process and having a direct to consumer lens on it and having that true, um, communication piece and giving that peace of mind to our consumers that that was something that would be safe for them to buy. And also beneficial from a cost perspective.
[00:13:19] Evaluating Opportunities
Karel J. Golta: Now, now, Sam, that sounds, uh, amazing, especially since, um, to me, it appears that you had different opportunities at hand. Um, can you, although not maybe going into each individual one, but what were the evaluation criteria for the different circular strategies that you were looking at or had at hand?
Samantha L. Truesdell: Yeah, so part of it, of course, you know, where we are a for-profit corporation, right? So the ability to, at bare minimum, break even, right? So if, if we aren’t necessarily making money off of something, but it is improving on our emissions or circularity or waste metrics, if we’re breaking even and making a, a step forward on those sustainability metrics, that was a win. Um, obviously having an actual business case in a financial sense that it can be something that can be monetized, um, and be an incremental gain for the business, that’s one of the top priorities as well. Um, another being just ability to execute. You know, do we have the teams and the bandwidth to make something happen and show some early wins so that we can then use that to leverage future initiatives and take that momentum and, and run with it. So I think it’s, it’s a combination of the financial gains to be had, the sustainability gains to be had and the ability to actually execute, you know, not trying to go to a level that’s so far, you know, north of what we’re able to do that it never gets done. Um, that being said, we are pursuing a mix of different circular business model initiatives. Some being like at the certified refurbished program ripe to be able to, um, execute on a earlier basis or sooner and roll out and expand from there. And some that take a lot more front-end work to be able to establish the processes to make it happen, and that might not have payoff for a number of years.
Karel J. Golta: Now, you mentioned before two things. First of all, that you have had already, um, long-term initiatives, circular initiatives, um, in the small appliances, for example, but also that in the, the last project in terms of the refurbished appliances, certified refurbished appliances that you were looking into. Users, consumers, um, needs and desires. Right. Can you elaborate maybe, or, or debunk a myth, a typical common myth that organizations have about, um, customers and consumers, their willingness to either adopt or not adopt from linear to circular business models?
Samantha L. Truesdell: That’s a packed question. Um, from our experience, a lot of it is about improving the ease of accessibility, right? Or reducing barriers to entry. Looking at it conversely, um, you know, saying that if you just say this is a recertified or this is a refurbished product, right? Whether you say it’s certified or not, and you don’t provide any additional context, you don’t say what that means. You don’t say what that benefit is to the consumer, then they’re going to see that as this is a used, possibly dirty, possibly broken looking product. I don’t want anything to do with that. Um, part of that shift for me came with, I was able to visit, it’s, it’s a huge retail store, um, in the Chicago area here, and it’s, it’s privately owned and privately operated. And so really they have zero barrier to try anything. If if the family that owns it wants to try something, it’s gonna be done. Um, and so they’re able to really experiment. And one of the things that they have done is established refurbishment of the home, appliances that they sell, being very transparent. Having that as a standalone site. And of course that’s a many, many, many scales smaller than Whirlpool and they’re not an original manufacturer. But I saw how they were doing it, and that led to some of these conversations in our, in our initial discovery phases of saying, okay, what can we do to make, to make this easier for customers to love. Right. Something that makes them look at this and say, Hey, I’ve seen what I need to see. I’ve heard what I need to hear. The risk is low enough, right? I, I’m able to return this, you know, being a, a big part of it. Um, it has a warranty behind it. That’s another big part of it. I think just improving that transparency and reducing those barriers to entry and being, you know, paying very close attention to the communication side of it has been key from my standpoint.
Karel J. Golta: I think we’re gonna, um, cover later on the topic of, you know, just making sure the, the, the customer journey is smooth and without any friction to actually into the very positive aspect of how do we make it so attractive that people cannot say no to it. Right? But we’ll get to that in, uh, in, in minutes, I would say. Um, Patrick, I, I would say let’s, let’s, uh, move over to Caio and, uh, uh, let’s drop some questions there. Um, and, and I would start with, for all of the listeners here and, and, and, and podcast lovers to first understand what is it actually this certified refurbishment program? Can you elaborate a little bit or bring us up to speed? What it actually is? What does it entail?
[00:18:16] How the Certified Refurb Program Works
Caio B. Doranti: Sure, sure. Yeah. Certified Refurbed products in Whirlpool means that we are taking products that return to Whirlpool. So they weren’t out of our factories. They were sold in the first time and they returned by many different reasons. Okay? It can be a trade partner agreement, it can be a customer delivery, rejection, uh, it can be a logistics issue that the product had and, and need to return. They are inside the return policies. Uh, we will receive these appliance, uh, and after receiving these appliance, by any reason, they can’t get back to a regional stocks if they are impacted, if they have any issue, any damage. So Whirlpool will inspect, define a refurbed plan for, for that appliance. Uh, execute the refurbed, repair parts exchange, uh, execute a, uh. Um, a product correction, let’s say a product fix. Uh, we’ll test it as we test any appliance that left our factories, uh, and then we’ll assure this product is working and performing like any other new product. After doing that, this product is, uh, going to be back to stock as a refurbed unit. We fund new, uh, code, product code, uh, and then we’ll be able to be sold under, uh, our direct channels, uh, direct to customer channels, uh, website. So basically they will be available on, uh, Whirlpool Brand’s website. The customer can access all the list of refurbished models available there. And they can purchase it and have, as, as Sam said, a peace of mind that they are purchasing a product from Whirlpool, uh, that look and was tested like any other new product. Um, and they have warranty for that.
Karel J. Golta: Terrific. So, so you just explained a little bit where the appliances were returning from, coming from. I, I’m, I’m just personally curious what, what. Is there anything that you have excluded so far that you were not able to reintegrate into the program?
Caio B. Doranti: That’s a a good point. So, um, this, when these appliance come basically they respect return policies, uh, from everything that is inside our return policies, I would say there is no exclusion. Uh, what happens, of course, is sometimes we receive a product. During this inspection and the grading process, we say, Hey, we can’t, uh, refurb that we have, uh, structural damage. Uh, it doesn’t make sense to do our operation to fix this appliance. So unfortunately we’ll need to, um, recycle that, that product. As we did to many other products before we start this program. So that’s the, the important piece.
Karel J. Golta: Cool. And, and I’m just, again, just curious from what you just said. Um, now I understand you sell it through your own channels back to the, to the consumers, right? So it’s not gonna go through Best Buys or whatever. It’s gonna go through your own channels and um, actually, is there like a third life that ever happened? You know, is, is, is there any, you know, once you resold him that they’re coming back and you re resell ’em again?
Caio B. Doranti: Yeah, that, no, that’s a, a great question. Uh, I would say as we started this pilot last year, and I would say late last year, we are still increasing volume, increasing penetration, let’s say, increasing even awareness of the program to, uh, the customers in US. Uh, so, so far there isn’t happened, uh, this, uh, situation yet. However, this is not exclusion, like I, we don’t exclude the opportunity. If these appliance come back anytime, they will probably be be evaluated graded than go to the same process again. So. It, it, it, it’s opportunity for the future didn’t have any of yet. So
Karel J. Golta: looking forward to, to see that in, in five years or so, to, to, to talk about that again. And talking about evaluation criteria. Um, uh, Kao, can you, can you elaborate a little bit on the circular metrics that you’re looking at in terms of, you know, the business is there, what are the metrics that you have been, um, looking at the beginning and have there been maybe any metrics that throughout the process you have started to change, alter, or to add to the process?
Caio B. Doranti: So, related to circularity metrics, uh, I feel that the, the first item that we see is that every product that we are now, uh, refurb should be disposed in the past. Um, it’s a, a product that we are keeping out of the landfill or keeping out of the recycling process, that in the end, a portion of that will go to the landfill. As Sam said, uh, majority of appliance are made of metal, so they have a high, uh, recycling value and a right high recycling interested by, by the recycler. So, uh, it’s easy, let’s say to, to recycle our appliances. We can’t assure, however, that 100% of this product is really being recycled and all the, all the parts and all the residue are coming back to the industry. So we, we unfortunately know a small portion of that is, uh, is still, ending, in the inland. So every single unit that we sell on refurb, it means it’s a unit that we avoided to put on the recycle. String, which for sure is not our priority. So, uh, this is the first circularity metric. What came on the way, and this came uh, through recently discussions by the way, is, uh, we have overall a metric of measure, uh, the appliance lifespan. Of the industry in average. So we know, in average in US, what’s the lifespan of a refrigerator, for example, based on customer’s usage and customer perceptions, and the amount of products that the industry input to the society versus the amount of products that the society outputs, let’s say, to, to recycle or to end of life. Uh, streams. When we do this, we understand that when we scale this program or this type of programs. We’ll probably be increasing the lifespan of appliance because we are taking appliance that either would be a end of life appliance and we are giving them a new life. So, um, let’s say mid to long term, we may have, uh, appliance lifespan average increasing year over year in case more, more players and more volumes is added to through the, uh, refurbished at certification programs.
[00:25:15] Refurb Revenue
Karel J. Golta: Now. Now this is interesting. This, this leaves, uh, leads exactly to, to my next dimension in terms of commercial dimension. Right. And I think you touched a little bit on it. I mean, if, if I hear, or I think, you know, businesses would hear, oh, he’s gonna extend to product life, you know, that usually is, is not always a good thing for a business, right? Because it means that there’s gonna be less new products sold. But in your case it’s different, I assume. So can you elaborate? You know, because as Sam said, you’re a pro for-profit company, so, uh, we definitely get that. So what is the, the is if you can elaborate on the revenue potential, because I’m sure you don’t do that just for avoiding the landfill. As you said, it’s also a business case. If you can elaborate a little bit on that, because that is the secret sauce probably a lot of our listeners would want to get a piece of.
Caio B. Doranti: Yeah, so I, I think the first thing that will come to everyone’s mind is, uh. Like, it’s not difficult to visualize that this is a, a revenue stream for the company, right? So you are taking something that you would recycle, let’s say, put on the trash or, or going to to be a cost to the company and you are making revenue out of that, right? So, um, I think that the, the, the question that can come is, is this revenue paying the operation? And the answer that I, I can give, it’s a yes. It’s paid itself, the program itself. It’s paid. Okay. So, uh, the revenue that we get from the products that we are saying, pay the operations that we, uh, need to do to execute the flow that I, I just, uh, explained in summary. So, yes, this is the first part of, uh, this business and commercial levers. Uh, what we believe is once we scale that, um, in more, uh. More units, more options. And, and even across the US, uh, more geography locations, uh, we may be able to get some productivity, uh, and then we can, uh, besides the revenue increase, we can reduce the costs as well that, that we have with the problem like any other, uh, productivity gains. So yeah, this is part of the strategy portion of the program. It’s being considered as a, as a really huge potential, uh, leverage of, uh, of revenue forward. Unfortunately, I cannot open numbers here, uh, as we are still in the beginning. I hope someday we can even have a, a P&L line item, uh, for, for refurb. Like, like big, big tech companies do.
[00:27:59] KPIs for the Pilot
Karel J. Golta: Absolutely a good point. Uh, one of our, um, show is gonna be with Philips and uh, I think they’re gonna show about, um, how much of their global revenue was actually coming from circular businesses. But, um, before you at Whirlpool get there on that level, I, um, like to understand maybe as a, uh, second last point before we move on to the next level is a little bit. I, I understand that you have been in a pilot phase, let’s put it that way. You probably have learned or intentionally left certain metrics out of the equation because you knew you could not deliver on them, right? Is there any like one or two you can specify because this is also a great learning for the audience. You know, what do you need to learn? Uh, leave out because you cannot win on that. Um, and which one are the ones you need to focus on?
Caio B. Doranti: As you mentioned, this is, this last year was a pilot phase. This year we are executing a second phase to make it bigger. So during the pilot phase, we focus on a specific area. We were regional okay. So one of the KPIs that we measure, but we, we cannot take out the learnings that we want is the conversion of the customers. Like we can get all the information from our website. You can imagine, and we know there are a lot of customer interest. Many, many customers are going, the website are clicking and they’re reading the, the, their, the refurbished product. And this was a, a metric that we are measuring, uh, but most of them because of the geography limitations when they put on the on the cart, uh, and they put their zip codes not available for them. So the conversion metric is a still unknown, let, let’s say, because, uh, we, we don’t know. We can, we can just measure in the small portion and then we don’t have so much representativeness Now in the second phase, the the biggest changes, we are scaling geography. So, uh, we’ll cover much more, um, portion of zip codes in in North America. Uh, and this will enable us to understand, hey, do the, is the cer the certified refurb? Conversion, uh, sales conversion, higher or comparable to our original product. Um, and this will bring a, an interesting learning for us.
Karel J. Golta: Terrific. Uh, uh, amazing. I, I’m really looking forward to, to, if you can share, share that learning in the future. My last point here, Caio, would be the following. Um, I believe you, you tapped into an innovation because it’s new to you at least to go into the large white goods appliances in your, uh, certified refurbishment and I was wondering, you know, innovation usually are team sports topics. Who are the players that you were able to convince of the attractiveness, um, of that play, of that game? Can you, can you say like, which one were the, maybe the most difficult one just shortly or which one, or with what argument were you able to, to win them?
[00:30:28] Winning Internal Buy In
Caio B. Doranti: Well, that’s a, a, a very good question. I feel. Whirlpool is a, is a really big company. We need to manage many different stakeholders, especially through a project like that, project like that. So it’s involved since logistics, uh, operations, sales, uh, finance, whatever. Uh, so I think that the most important are the key stakeholders there. One is that the sales team that manages our B2C website. So I would say without convincing them that this would be a level of growth of our B2C channels this would not be possible. So when they understand that, yes, this can be a really differentiation for the brands because no, no trade partner will have this product. Only whirlpool.com and maytag.com will have this product. And, uh, understanding the quality and the information and the profitability, uh, they said, yes, let’s do it. They become a really right arm in the project and, uh, help us to navigate to all the operational stuff, to, to unlock barriers that we may have. But there was many different areas, like, we need to convince engineering teams because new models will need to be created. These new models to go to UL certification, they will need to do tests that were never done before, uh, or evaluations that were never done before. So yeah, many, many different players. Uh, definitely, uh, in a, a long journey, uh, together with them. What I can say, just to, to finalize this. Really good excitement for all the Whirlpool internal stakeholders on the program. Like every time that either me or Sam, we pitch the project inside the company. People get, hi, why, why don’t we do this before? Like it’s, it seems great. It seems amazing. Let’s, let’s focus on that. So that’s, uh, that was key.
[00:33:04] What It Takes to Build a Model
Patrick Hypscher: Let’s stick to that topic, but at the same time, also zoom out. Samantha, you mentioned at the beginning you had a couple of criteria when it comes to selecting the different business models, and now we hear from Caio uh, a few learnings and how it works and also some, uh, let’s say insights into finding partners and allies to make that work. So what does it take to go from “okay, we do that” to okay now you’re, you’re live in the second phase, so what was needed to get there.
Samantha L. Truesdell: Yeah. And I’ll build on, on a couple of the things that Caio mentioned as well, and, and we can use that as a, um, springboard, you know, for, for the rest of the conversation. And one of the points, and one of the questions that was asked earlier, you know, about finding that incremental value and, and how that has been a benefit for the business and a benefit to Whirlpool, not from just a sustainability and circularity perspective, but from a financial perspective as well, has been, and Caio mentioned that direct to consumer model, right? So I’ll, I’ll point that out where not only is this something that isn’t going to landfill or scrap for the majority of it going to, to scrap metal. Um, it’s something that we’re able to increase the value of through that transparency to, to the consumer. And through that direct to consumer model, that allows us to have a lot more, um, control over the messaging, more of the direct metrics associated with it, and get higher margins on something like that, right? So if we’re able to control part of that, we’re able to have that direct line to value. Um, so I’m, I’m gonna point that out real quick as being, you know, one, one nuance that I would expand on there. Um, and then talking about, you know, the, the internal communications and the getting the buy-in and, and what it takes to build up a model like this. I think it sound, it sounds simple, but it’s really where I’ve seen so many of the roadblocks, both within Whirlpool and in conversations with, with colleagues in various platforms, is it is so reliant on nuance and speaking the right language. As an example, you know, some of these business models, whether that’s the certified refurbished, there’s, there’s some other models that I mentioned earlier that we’re working on that are earlier phases where it’s not the first time the concepts have been explored. You know, we’ve been refurbishing. It’s not the first time we’ve refurbished something. Um, you know, some of these, these other models that we’ve looked at. It’s, it’s situations where it’s never gotten off the ground at all, and it’s a concept that’s been pitched, but the nuance just wasn’t there to get it to that next step in the process. And so I think being really, really focused on those key specifics that can make something actually get off the ground. Um, whether that’s internal capabilities, whether that’s reducing the complexity to get it going. Um, focusing on those points and being able to build up from there and asking the questions, you know, where, where there are people, and we’ve been very, Caio mentioned this, we’ve been very fortunate that that buy-in frankly has been fantastic, um, for this model and others. So, so, so that hasn’t been a huge roadblock, but you’re always going to have people that would say, you know, oh, we looked into this, or, oh, we tried this, or, and it’s really important to triple click on those questions. And say, oh really? You know what? Well, what? Why didn’t it go anywhere? What happened? And more times than not, you find that where that roadblock occurred is something that isn’t a stopping point. It’s just a clue to what you have to do next to make it work. And going past that point of friction and past that point of discomfort to turn it into an opportunity instead of a roadblock. And I think all of us in sustainability, and many of us literally, um, are trilingual. Right? But for me, when I’m using that language, because I’m not literally trilingual, but I feel like I’m speaking three, four, or five different languages in talking to different groups within our own operations and external operations, right to be able to communicate what we’re trying to do, to listen to what their goals and objectives are, and really be able to take those concepts and translate them into something that’s attractive to a number of different stakeholders.
Patrick Hypscher: Mm-hmm. Right. And it seems as though what you’re doing right now qualifies as a success up until now. Uh, I mean, you’re scaling it. Yeah. And you get good results. Does it get easier for other circularity products?
Samantha L. Truesdell: I would say I’m, I’m going to say it’s too early to say with data to support the answer being yes. Right. Um, but I consider myself an optimist and at least in my interactions, I think so, you know, because even if it’s not a one-to-one, same sort of, of concept, you build that trust, right? You, you start to be viewed as someone who can bring creative solutions and can find different ways of building value from the, for the company, um, and not just, you know, I, I take tree hugger as a compliment, but you know, not just being viewed as someone who’s out there, you know, just trying to save the trees and save, you know, the animals of the world. You know, we’re, we’re really truly coming up with creative solutions that bring value from a number of different perspectives. And I think as you start to build that trust, um, and as you start to build that muscle of being able to speak all of these different languages of different groups within the corporation, that makes it easier in that you establish those relationships and then subsequent conversations, they realize you’re not just coming from a place of like, we’re gonna cost you a lot of money in order to meet our metrics, but that we’re actually bringing value to the company.
[00:39:15] Making Refurb Irresistible
Patrick Hypscher: Wonderful. I mean, that even brings me to my last question, Samantha, and this series is about the irresistibility of circular businesses. So what makes certified refurbishment irresistible for Whirlpool?
Samantha L. Truesdell: So before I give the short answer to this, I’m going to go back to that, that last point, which is that it’s a lot of groundwork leading up to making it irresistible, right? You have to lay a lot of communication points, a lot of, um, data, a lot of, you know, very clear value. Conversations leading up to that irresistibility piece, right? Because I don’t think anyone’s going to say it’s irresistible from 0.0 because nobody knows what you’re talking about at 0.0. But once you’ve gotten to that point, um, you know, for us it represents an opportunity to reduce waste, also grow our direct to consumer business, and provide access to high quality, lower price point appliances for consumers. So in that case, it’s a win-win win, and it’s a pathway for us to learn and grow and expand these models in the future.
Patrick Hypscher: Wonderful. Karel, we, we gained some great insights and I mean, Whirlpool is unique. Yeah. It’s a specific industry and we know there are many companies looking into refurbishment, we now hear it one specific case, but trying to make it work also for other companies. When does certified refurbishment work?
Karel J. Golta: You know, this is really cool. Thank you, uh, Caio and uh, Sam to share that because, uh, for me I have three things that make it, make it to work. Um, and, and the first one is the obvious business case one. Okay. And I have understood, and this, this works for everyone. You need to make more revenue, somehow you need to grow some of the business metrics, which is either margin or revenues, right? And revenue is one that they said that they could do and would be doing. And I think this is a strong lever and motivators for many others, um, when it makes, makes it, or when it comes to make it work. But especially what I liked, and I think this is important as well, we heard, um, and, and I, I read a little bit between the lines, is that. Yes. Um, you don’t wanna add cost to it, so it has to be cost neutral what they’re doing. So adding revenue at no gain, um, that, that, that can still work if the gain is in other metrics, business metrics, if they apply in the businesses, which in that case and in other many other cases, we know it applies as well, which is sustainability metrics. So it could be less landfill put to landfill, right? These things. So these are really strong arguments as well. So this is point number one that I’ve taken Patrick. The second one is, uh, and I like, um, the, the, uh, being able to speak a, a couple of languages myself. Uh, literally I loved what Sam said about, you know, being trilingual or multilingual. I love that concept because it is true. People need to speak the languages of the different stakeholders to make things irresistible because otherwise you are not comprehendible. That’s the minimal. But actually, this brings me, um, to the third point. I think only if you have people like Simon Caio. Probably more within their team. I assume when you have people that really, with all their energy, are trying to make the best case possible, that’s when you speak the language of the, uh, stakeholders and when you speak the language of businesses that you really have a case for refurb. And maybe just as a last, I just just came back, um, from a business trip, um, at a conference where I’ve seen hundreds of people standing in line at a regular large, um, conference or show where next to all the big booths where you would show the newest innovation. There was a small booth with hundreds of people standing in line with a pile of money in their hand because they were able to buy second hand products at this show, which was amazing to see, you know, when everyone was showing off, they were the coolest and greatest was the newest innovation in technology. That the most profitable business on the floor was the one that was selling the secondhand products that were otherwise sold throughout that, um, B2B industry fair. So with that, I just wanna make, uh, make sure that, you know, refurb is a case. As Kayo said it, guys, why haven’t you done it before? Why are we not doing it on other business segments? That’s the beauty.
[00:44:02] Barriers Benefits And Wrap Up
Patrick Hypscher: And I mean, the, the initial answer to why haven’t we done it before is it doesn’t work, doesn’t work for us. What are the barriers that you spotted in the conversation and also the approaches to overcome them.
Karel J. Golta: Yeah, that’s actually a really good point, right? Because the barriers it seems in this case are more, um, the smaller technicalities that you have to make sure you have on your page or that you’re addressing correctly. Um, so I think for example, um, when we, when we’ve seen what, Whirlpool has looked at in the Chicago area was the family owned or, or privately owned large business, that that was doing certain things, um, that you sense not actually the barrier but the opportunity, then you have to transform it or translate it into where are or potentially are barriers that you address. And this comes back to a little bit, to this multilingual topic in making sure you think the perspective or in the shoes of the stakeholders, you’re gonna address a certain opportunity to with, because you then understand what would they consider a barrier, um, as Caio alluded to with, um, with certain certifications, right? UL certifications, for example, for the engineers and things like that. So these are the small barriers. Um, and they can be huge mountains if, if, if you’re not talking the right language, I would say. Um, and then I would al also say, and this is, this is something we maybe haven’t addressed today, but I sensed also between the lines, you need to have some sort of a quality pro a product, right? Because if you don’t have a product that has the opportunity to go for an extended life and the data, uh, we’ve heard today, you know that there, it shows that there is gonna be a longer life cycle in these products. Um, this is, this, this is crucial, I think, um, and probably an entry barrier. People have not on their list at the beginning, but that shows that quality you know, can pay off twice or eventually we’re gonna see that three times.
Patrick Hypscher: Yeah. My last question is, as you mentioned, you, you’re reading between the lines and not only in this conversation, but also uh, in, in many others, and you’ve seen, um, many refurbishment programs. We already talked about, let’s say the commercial benefits, extra revenue, or at least in break even meeting sustainability goals. What are other contributions, uh, of refurbishment towards business success?
Karel J. Golta: So we, we, we heard it in the circularity and circular metrics, right? I think, um, avoiding landfill, reducing CO2 emissions, potentially making sure that, um, you don’t only recycle, but look at other, circulation streams. Basically these are all different, um, metrics that contribute to success. And what we also have seen, and I think this is something everyone that starts to do refurbishment will uncover is data. So data is a huge topic because understanding your customers may be in their behavior better. And also that we heard a little bit about, hey, we were not able to, um, render the service to all the zip codes, right? In the future when you do that, you will understand which areas under what conditions are more inclined to do that. That is super valuable data that you’re probably gonna use in the future. I see that as, at least in other businesses we are working and talking with, to actually then redesign or innovate new products that have even more capacity and capability to add even more, um, different businesses, uh, business benefits, and um, I think it’s just terrific also as an internal, you know, almost like, um, internal branding and, and and energy booster for employers at, at Whirlpool, if they see that, that they’re actually adding more to environmental cause by making business. So also this very emotional kind of touchy thing saying, Hey, you don’t have to be a tree hugger. You can just do the, the obvious smart thing to do actually good for a business, um, for customers that obviously want these products. And in the end, also for the planetary boundaries.
[00:48:32] Outro
Patrick Hypscher: Thanks for sharing your experience, uh, with us and can’t wait to see the result of the scaling up up.
Samantha L. Truesdell: Thank you so much for having us. It’s been fun.
Caio B. Doranti: Yeah, thanks a lot. I appreciate the invite.
Karel J. Golta: Thank you. You have been so amazing. Thank you, Patrick, for hosting this.
Patrick Hypscher: This marked our third episode in the serious irresistible circular business in sponsoring partnership with INDEED Innovation, the Global Design and Innovation Firm, pioneering the Circular Economy. You want to get the actionable one pager about this conversation, then sign up for the Circularity.fm newsletter. You can find it at www.Circularity.fm. And do you want to learn more about how leading brands are turning returns into revenue? Then download the eCommerce Playbook by INDEED Innovation. You will find the link to it in the show notes. In the next episode, we will hear from Philips, a pioneer in the circular economy, how they capture value from various circular offerings. Let’s drive a profitable circular economy. And please don’t forget, the most abundant renewable resource is your imagination. My name is Patrick Hypscher, and this is Circularity.fm, the podcast about understanding, building and managing circular business models.