8 Aug 2022

Unless you have been doing a digital detox, you have likely heard that Amazon recently purchased iRobot, the the implication of acquiring the Roomba.

On one side, now they have a fantastic autonomous home cleaning system. But the predominant idea behind the acquisition is not for the robot, but for the information acquisition that comes with it.

Roomba's help to map an internal environment that they clean. That map gives more precise dimensions from users; which likely could be modified. This, when combined with the existing audio from the Amazon Echo/Alexa provides a more expansive mapping of the audio-environment and engagement. This positions Amazon again not only with a unique informational advantage, but a unique predictive advantage in how home organisation and behaviour relate to purchasing behaviour.

Amazon has been a logistical powerhouse with a unique informational advantage; with the growth of AWS and robotics acquisitions, Amazon is positioning itself further as an information giant - paralleling the work of Google and Meta.

So what does this have to do with circularity?

From the last years, one of the most prominent, recurring problems facing circularity is information access, information sharing. Who has it, who shares it, and for what do they have it about. Estonia's circular economy program had difficulty with national material flow analysis in part due to the lack of effective granularity of information capture about where materials are and how they move.

Now the problem here in part is Amazon itself, and its also the trend towards information aggregation to shape market power. Amazon positioning itself as a monopsony player towards its suppliers. Circular aggregators, attempting to be the unique micro-amazon for circularity, have continuously been proposed - and have continuously come into difficulties. In part due to market expectations and monopsony power from Amazon, but not in full.

But as Amazon pushes its own circular initiatives, eventually, Amazon will likely use its logistical position to enter into the circular field, leveraging its informational position equally.

Consider Loop's initiative. Loop helps to facilitate a precision consumption model by delivering items in durable packaging enabling users to send back the durable items to be refilled. There is nothing about Loop which Amazon cannot replicate, and likely reduce the cost through further warehousing advantage and refilling automation.

But this ultimately means the current generation of circularity providers are in a precarious moment relative to the conditions of future scale. The potential for external large player entrance remains high. And if so, likely the same model will re-emerge. Amazon positioning themselves with "circular basics" and as an intermediary circular provider.

But this also means a rise in competitive mimicking. If amazon positions itself through warehousing and informational advantage for circularity offerings, we can expect similar attempts. The race towards scale to facilitate circular transitions, where the micro-environments have been finding difficulty to scale.

Welcome to the age of platform competition for circularity. It arrived years ago, now we are catching up to it.

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