Imagine a happy, thriving world filled with greenery and abundant resources, where nature and humans live in perfect harmony. Now, snap back to our current reality, confronting the stark contrast of a world veering towards devastation. The once-clear air is getting polluted, green spaces are disappearing, the waste is getting overloaded in the landfills. If this continues for just two more years, we are heading toward a modern hell.
However, there remains a viable solution: the adoption of a circular economy. With a whopping 69% of customers in India willing to pay more for sustainable and eco-friendly products, some savvy retailers are putting the spotlight on the circular economy. Their mission goes beyond customer satisfaction; they aspire to evoke not just smiles from buyers but also contribute to the Earth’s well-being.
What exactly is a circular economy in retail?
Simply put, a circular economy is an economic system designed to minimise waste and make the most out of resources. Unlike the traditional linear model, which mostly depends on the “Extract, Produce, and Discard” concept, the circular economy focuses on keeping products in use as long as possible. As a result, it contributes to environmental sustainability in the long run.
Let us explore seven innovative strategies that brands are adopting to establish and strengthen the circular economy within the retail sector.
Improving reverse logistics
Reverse logistics is the linchpin of the circular economy since it systematically manages the entire product lifecycle. When products are returned to the sellers, they make smart decisions for what to do next, like whether they will be returned to inventory to be sold as new, remanufactured to like-new condition, sold at a discounted rate, or donated. By integrating such critical thinking and improvement plans as parts of reverse logistics, retailers are contributing to a more circular economy.
H&M, for instance, encourages its customers to return gently used products in exchange for a discount on their next purchase.
Integrating circular product design
Today, eCommerce brands prefer designing products in such a way that they resell, remanufacture, and repair them in the future. For this reason, they are adopting multiple ways, like incorporating modular elements for easy disassembly, using high-quality materials, opting for recyclable and responsibly sourced materials, etc. Furthermore, they are collaborating with other businesses and researchers so that they can advance this approach to the next level.
Let’s take the reference of Adidas. This giant brand has launched the “Three Loop Strategy” to keep up with the circular economy. While the first and second ones focus on the “made from recycled materials” and the “made to remade” model, the third one involves using regenerated materials in the products.
Facilitating the Reuse Model
Brands are promoting the reusing model as much as possible to reduce product waste and production costs. And it takes place in multiple forms. For instance, some brands like Apple have established dedicated facilities to assess and repair products to enhance their lifespan.
Likewise, there are a number of organizations like Freecycle that facilitate the exchange of used goods within local communities. The members of these platforms can connect with each other to acquire items for free, which directly enriches the circular economy model.
Promoting resale and rental approaches
The resale market is making a boom In India. The second-hand luxury goods market size touched $555.0 million in 2022 and is projected to reach $1,060.8 million by 2028. It clearly shows that the reselling model is not only a great way to reduce product waste and maintain sustainability but also a profitable industry to tap into. Well-known brands like Patagonia and Levi’s have dedicated pages on their sites to promote the resale model.
Like reselling, the global online rental market is going to touch $2.29 Billion by 2028. When brands opt for the rental approach, it maximizes the products’ utility and minimizes waste generation. For example, Rent the Runway and Rocksbox rent apparel and fashion items for shorter periods to maintain a circular economy.
Extending product life cycle
When products are designed by keeping the future in mind, they are meant to last longer. But that’s not all. Some retail brands also offer regular maintenance services to extend the product life cycle. Dyson is one of them. It provides regular maintenance services for its items. In fact, you can also access its online resources for troubleshooting.
Adopting innovative product packaging
Most retail brands are going beyond traditional packaging methods and exploring creative ways to contribute to the circular economy. The Body Shop is a burning example of this approach. The bottles and tubes of its hair care products are made from 100% recycled plastics. It also aims to make all the packaging of its bath, body, and hair care products fully recyclable.
On the other hand, Puma has introduced its Clever Little Bag brand element. It’s completely sustainable and consists of a heat-woven bag and cardboard tray that you can reuse for storage.
Encouraging recycling practices
Establishing a circular economy is not limited to only changing the products and packaging. And retailers know it really well. Until the public aren’t aware of this sustainability model, it won’t work out. That’s why retailers are educating consumers through innovative programs, implementing incentive programs, and collaborating with other brands to strengthen the approach.
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ChopValue (a Canadian company), for example, has partnered with top commercial real estate companies across Asia for sustainable projects that aim to recycle 2.5 million discarded chopsticks.
Pave the way to sustainability through the circular economy model
Sure, building a sustainable future is not a one-day activity. But, slowly and gradually, by adopting small steps, we can make it possible one day. And here, retailers have come out as torchbearers by adopting these activities.
So, it’s time for the Earth to smile and for you to shine!
