Mirco and Luca De Savelli run a for-profit library of things in Lugano, Switzerland. You read that right: for profit. While most libraries of things operate on a non-profit basis, usually with volunteers and limited opening hours, Circular Lugano takes a different approach. Good idea? Let’s find out!
It’s not the first time we’ve seen such a model. Amsterdam-based BIYU raised €2.6M in 2022 to scale their rental shops across the Netherlands before having to stop operations. Other innovative companies are also running for-profit businesses using shared lockers (we commonly refer to them as sharing stations) but focused on just a limited number of items (usually 10 to 30 items). Circular Lugano, meanwhile, makes hundreds of items available in their sharing library from Monday to Saturday. This includes DIY tools, a car roof box, a kayak or even moving boxes. They have ambitions to expand operations throughout Switzerland and beyond – all currently without investors.
Circular Lugano’s main objective is helping to advance the circular economic model and reducing the number of under-utilised items produced and thrown away in cities. They believe in the for-profit model for several reasons
“We are competing with big players from the linear economy. To be able to beat them, we need to attract talent and show potential for growth, both of which are essential to solve logistics and other operational challenges. Also, while other libraries of things use wording such as ‘members’ or ‘users’, we solely refer to ‘clients’.”
Mirco also points out that to be competitive, they need a service that is as convenient as possible – and this means long opening hours.
The origin story
Circular Lugano started in Mirco and Luca’s apartment, where they began listing donated items for rent on second-hand platforms. This worked well to begin with, but the platforms eventually asked them to stop. Notwithstanding, this first initiative showed the brothers that demand for sharing and renting was strong. Next, they found a dedicated space where they could rent out hundreds of items – the large majority of which were obtained through donations.
From there, their model started to grow and Circular Lugano was born. The company started investing in high-quality items, experimenting with different brands, and established which products were more suitable than others for sharing.
“There are some brands traditionally associated with quality that aren’t really high quality anymore. With experience, we are learning which items and brands best fit our sharing model.”
Running an effective library of things
Drawing on Mirco’s experience of running the day to day management and client interactions at the Circular Lugano store, we wondered what he could tell us about running a library of things in the most effective way possible.
The secret, he says, is ensuring the items are used and taken care of properly, limiting the need for repair, cleaning, and other supporting tasks. Effective and creative communication is key here. For example, to help embed habits like cleaning the shared items into the clients’ user experience, Circular Lugano provides cleaning tips. Mirco also acknowledges that running a library of things requires many different skills, including fixing electronic items. Here Mirco re-emphasised the importance of populating the library of things with only the most robust, high-quality items.
Powering growth
Circular Lugano is growing fast as a business, with a 20% annual increase in rentals. This is down to a smart two-pronged approach that combines (1) a pay-per-use scheme, where the client pays a daily rental fee, and (2) a membership scheme offered to companies and municipalities, providing free usage to their employees and residents. Today, 40% of clients come through the membership scheme, which is currently offered by 10 companies and 3 municipalities
“Companies are interested in providing a circular and attractive service to their employees. We typically work with Sustainability and HR managers to create this package. It also provides us with free marketing as all employees and residents in an area get to know us.”
Seasonality is also an important element to consider: Mirco acknowledges that their business doesn’t have enough winter equipment yet.
Next steps for Circular Lugano
Looking ahead, Circular Lugano will soon test an automated self-service library of things to reduce reliance on staff. If effective, Circular Lugano aims to deploy several of these self-service libraries of things around the region to tap into the “network effect”, boosting visibility and accessibility.
The company now welcomes any subsidies from municipalities willing to help them open new stores – in the form of cash to cover initial investments, marketing support, partnerships with companies, or affordable rent. However, the brothers believe that once their model has been proven, they’ll be able to deploy it without needing any funding from the public sector.
Based on the latest rental numbers, the De Savelli brothers are confident about the business model of their library of things – and we hope to see them flourish in Switzerland and beyond.
The Access Economy Alliance is Europe’s first network of public authorities, businesses and researchers that pools together resources, collaborations and knowledge to deliver a circular economy through access-based services.