Leveraging Marketing Strengths: Dentsu Group Launches Unique Circular Society Project

※This article is an edited version of a piece originally published on Business Insider Japan on May 28, 2024.

Realizing a circular society requires collaboration between "manufacturing and sales" (arterial industries) and "collection and recycling" (venous industries), along with consumer participation. However, the current reality often sees manufacturers and retailers implementing isolated initiatives. While they call for consumer participation, they frequently fall short of creating strong incentives. To address this, three companies within the Dentsu Group in Japanhave launched a project to build a circular platform. Leveraging the group's accumulated expertise in corporate marketing support, this initiative aims to create a new model for consumer participation.

What sets this apart from typical circular platforms? We asked three key contributors: Mineko Hotta from Dentsu Inc.'s Sustainability Consulting Office, who led the overall concept and planning; Kaoru Suwa from DENTSU PROMOTION EXE INC. Headquarters, responsible for production and UI design; and Tenpei Ishii from DENTSU PROMOTION PLUS INC. Platform Co-creation Division, who handled system development.

Leveraging strengths cultivated in sales promotion to drive consumer behavior change

Currently, most initiatives for collecting and recycling empty product containers are manufacturer-led. However, manufacturers face challenges such as "collection and recycling incurring costs" and "collection not leading to subsequent purchases, resulting in a lack of monetization." To solve these issues , it is necessary to connect the "manufacturing and selling" arterial industry with the "collection and recycling" venous industry and drive transformation.
 

Provided by: Dentsu Inc.

The Dentsu Group's circular platform, "Don't Let It End Here PLATFORM, " allows users to scan the JAN code of empty containers with their smartphone. When deposited into designated resource recycling boxes installed in stores, users receive coupons immediately usable at that store.

Resource recycling box used in the "Don't Let It End Here PLATFORM" pilot test.

This system combines "collection/recycling" with "sales promotion," aiming to foster collaboration between upstream and downstream industries, encourage consumer participation, and achieve both business viability and social contribution towards a circular economy.

The project originated from a Dentsu Group initiative to collect and upcycle unnecessary plastic within the company. Project members gathered, thinking there might be something they could do not just internally but for society as a whole. Ms. Mineko Hotta speaks about this vision as follows.
 

Ms. Mihoko Hotta / Dentsu Inc. Sustainability Consulting Office. After working as a product designer for a major electronics manufacturer, she oversaw product design and UX design at a telecommunications company. She then served as a manager for product branding, marketing, and PR targeting the Japanese market at a global manufacturer. Since joining Dentsu Inc., she has worked as an expert in sustainable business and the circular economy. Recipient of numerous awards including the iF Design Award, red dot design award, and Good Design Award. Certified Human-Centered Design Specialist by HCD-Net and Certified Ergonomics Specialist by the Japan Ergonomics Society. Good Design Award judge for 2022, 2023, and 2024.

"Within the broader movement toward a circular society, corporate activities now extend beyond just 'making and selling' to encompass 'making, selling, collecting, and reusing'. As the Dentsu Group, which has traditionally supported companies through sales promotion, we believe we can leverage the marketing expertise and digital strengths cultivated in sales promotion to the recovery and reuse phase. This enables us to create mechanisms and communications that drive changes in societal and consumer awareness and behavior. This 'Don't Let It End Here PLATFORM' is the embodiment of that vision." (Mr. Hotta)

Leveraging collection data for marketing and customer development

The key point ofthe "Don't Stop There PLATFORM"is that it doesn't just collect items and circulate them; by digitizing the act of collection, it circulates both items and information. Mr. Tenpei Ishii explains.
 

Tenpei Ishii / DENTSU PROMOTION PLUS INC., Platform Co-creation Division. Worked on establishing the Japanese subsidiary of a foreign IT company, handling sales management and product management. Subsequently engaged in various project management roles at an advertising agency. After joining DENTSU PROMOTION PLUS INC., has been responsible for producing digital sales promotion initiatives, primarily for beverage manufacturers and foreign IT companies, utilizing various platforms.

"While purchase data has traditionally been prioritized, we recognized that collection data also holds crucial information. By tracking 'collection' as the starting point —who bought what and what and how much they deposited in resource recycling boxes—we can seamlessly create 'promotional pathways' and leverage this for marketing. Furthermore, we can nurture consumers participating in the circular economy as the next generation of customers," (Mr. Ishii)

A preliminary survey revealed that a customer segment exhibiting both high loyalty and strong awareness of recycling participation—defined as having "five or more brands they continuously purchase" and "at least one product they participate in recycling/recycling programs for"—exists in approximately 20% of each generation. While younger individuals tend to be more prevalent in this segment, men aged 30 and above show a lower tendency.
 

Provided by: Dentsu Inc.

We refer to these consumers as "Sustainable Customers," a concept following "Loyal Customers." We believe that identifying and increasing the number of Sustainable Customers, who support the dual goals of business viability and social contribution, is essential for sustainable management.

This unprecedented challenge drew reactions from other companies asking, "Why Dentsu Inc.?"

In June 2023, participating companies were recruited for the proof-of-concept experiment. From November 30, 2023, to January 30, 2024, Dentsu Inc., DENTSU PROMOTIONPLUS INC., Lawson, Meiji, and Nakadai Holdings collaborated to conduct the "Don't Let It End Here PLATFORM" proof-of-concept experiment. Resource recycling boxes were installed at three Lawson stores in Tokyo. Participants who deposited paper cartons and caps from "Meiji Oishii Milk" and other Lawson-sold products received discount coupons for "Meiji Oishii Milk."

Meiji recognized the challenge that the recycling rate for paper cartons currently falls below 30%. Additionally, the year-end and New Year period presents the issue of large quantities of surplus milk being discarded due to the absence of school lunches. Meiji sought to address this by promoting demand in tandem with paper carton recycling.

Meanwhile, Lawson agreed to participate, seeing the installation of resource recycling boxes in convenience stores—now an essential part of daily life—as a way to become a hub for a circular society.

In fact, many other companies showed interest but did not participate. Regarding the reasons, Mr. Kaoru Suwa stated:
 

Kunji Suwa / DENTSU PROMOTION EXE INC., Regional Headquarters. With years of experience planning and producing promotional activities for clients across diverse sectors including beverages, food, finance, and automotive, he currently oversees the entire CX domain. This includes digital sales promotions in collaboration with platform providers and retail promotions utilizing purchase data.

"We received positive feedback from many distributors and manufacturers. However, regarding actual implementation, some companies expressed reservations, citing issues like lack of space to install resource recycling boxes or concerns that coupon usage would increase checkout wait times. There were also opinions stating, 'We want to direct users to our own app, not experiment with an independent platform.' A key challenge moving forward is enabling seamless integration between this platform and each company's app," (Mr. Suwa)

Many companies were also surprised that Dentsu Inc. initiated this effort.

It's an unusual challenge for Dentsu Inc., which handles client business, to develop its own platform. We were often asked, 'Why is Dentsu Inc. doing this? Aren't you an advertising agency?' The Dentsu Group has adopted 'B2B2S (Business to Business to Society) ' as its management policy. We explained , 'We want to contribute to a circular society by leveraging our strengths, which is why we're taking on this different kind of challenge '." (Mr. Hotta)

Increasing collection points expands business opportunity potential

After completing the proof-of-concept experiment, new challenges also came to light.

"As this was a proof-of-concept with a minimal budget, we had to use existing tools, which presented challenges in terms of UX. However, I believe we provided the optimal solution for this proof-of-concept.

However, since coupons are issued based on user self-reporting, proving that items were actually deposited remains a major challenge for full-scale service implementation.

For example, we need solutions like having users decide in advance which store to drop off at and then turning on GPS to confirm their location upon arrival. Digitizing the resource recycling boxes themselves would increase costs. We want to solve this without incurring additional costs to increase the number of collection points and participating companies." (Mr. Ishii)

"Interest and attention from consumers, media, and government agencies was high. However, since it was only implemented at three stores in Tokyo, we felt there is still significant room for growth in the actual collection volume. To encourage awareness and behavioral change, increasing the number of collection points is essential. Furthermore, creating incentives beyond coupons—such as adding gamification elements to make visiting the points fun—is a key challenge moving forward." (Mr. Hotta)

" Geotargeting ads displayed to people near stores using location data showed some effectiveness. This made us realize we need to develop meticulous plans for ad placements going forward." (Mr. Suwa)

The pilot project was a significant step forward, including clarifying these challenges. Implementing this platform in society opens new possibilities for achieving both business viability and social contribution.

"While this trial focused on paper carton collection, we received numerous inquiries asking, 'Can't you collect plastic?' Of course we can. By preparing JAN codes and corresponding material information in advance, and then scanning the JAN code with a smartphone, consumers can identify materials like PET (polyethylene terephthalate), PP (polypropylene), or PS (polystyrene) from PET bottles. They can then sort items into the appropriate resource recycling bins according to the numbers displayed on the screen , thereby improving recycling efficiency and quality.

We also heard feedback like, "We don't need coupons; please continue this initiative," showing that sustainable customers aren't solely motivated by monetary incentives. We want to explore non-monetary incentives too, such as displaying CO2 reduction amounts, enabling donations, or improving rankings within the service.

Furthermore, creating a flexible, advertising-like business model where manufacturers can make spot requests for resource recycling boxes—saying "We want to introduce this in this area for 3 months" or "6 months"—could open new possibilities. By making it a social platform where multiple companies can participate regardless of competition, we can reduce costs and increase collection points." (Mr. Hotta)

The ideal is to foster an atmosphere where local collection becomes the norm, achieved not just by companies but through regional collaboration.

"To realize a sustainable society, we must increase the number of collection points and the volume collected. We will continue aiming to build a network where various companies and local governments can participate. The Dentsu Group in Japan has connections with approximately 6,000 companies. Precisely because we are the Dentsu Group, we believe we can create a platform that makes it easy for everyone to join." (Mr. Hotta)
 

[After the Interview]
"Why is Dentsu Inc. building a platform?" That sense of surprise was precisely what I felt when I first learned about this project.
Thinking about it, the position of an advertising company as an intermediary connecting businesses and consumers (or businesses) does indeed provide a suitable distance for designing cross-industry mechanisms.
The definition of a new customer segment, the "Sustainable Customer," revealed through their research, is also unique. This new concept can serve as a target for companies redefining their brand value.
I look forward to seeing the voices of "business professionals conscious of social issues"—like those who first reached out—become a tangible force driving society forward.
(Interviewer: Yuki Ito, Editor-in-Chief, Business Insider Japan)
 

For details on the "PLATFORM that doesn't end there," click here

(Business Insider Japan Brand Studio)

Related article:
What kind of people are "Sustainable Customers" who create a virtuous cycle with companies?