If there’s one word that matters to consumers much more than it once did, it’s sustainability.
In the retail world, consumers are constantly bombarded with advertising and marketing messages to buy the next best thing, whether that’s cosmetics, homeware, electricals or fashion. This is presenting a huge problem for brands. Not only are inventories becoming bigger and bigger, but the amount of waste that is being produced by such fast-moving products is immense, not only in terms of products returned but surplus stock too. Businesses need a solution that shows they are sustainable while allowing them to remain profitable. So, if sustainability is the buzz word for the 2020s, what does this actually mean in practical terms and how can businesses be more sustainable while keeping customers happy?
The Problem of Returns
If you’re a business owner in the retail sector, you will know how much of a headache returns can create. What to do with the stock, how do you keep your operations profitable and what about the impact on the environment? These are just some of the challenges that you may come up against. By making your operations more sustainable, you can overcome many of these issues. Solutions such as the circular economy are not only viable and profitable, but they are growing in popularity. The Circular Economy is where products are reused, recycled or repurposed so there’s no waste. Rather than a customer return ending up in landfill, it is reused in whatever way it can be, whether that’s reselling it in its current condition, breaking it down into component parts and reusing them with electronics for example or upcycling items such as furniture and reselling them. The opportunities in the circular economy are endless and it’s a profitable solution too. When you commit to building your business on the circular economy, this will allow you to become much more sustainable.
Returns Management – A New Approach
We’ve all seen the images of sea life being consumed by plastic waste, or the toxic waste ending up in the environment causing serious damage. Consumers are becoming more aware than ever of the impact their purchases have and the way in which businesses operate. Changing attitudes have encouraged businesses to look for new and creative ways to manage their supply chains, with more and more focus being placed on sustainability and in particular committing to zero waste goals. That said, if ambitious targets like these are to be achieved, businesses must adopt a new approach to the way that operations such as returns management are coordinated. Customer returns can generate so much waste. But not for a sustainable business. Every single item is reused or put to some use, whether this is the actual product or the packaging that it comes in. The way in which products are reused or recycled will depend on the nature of the retail business, but owners need to get creative to minimise the amount of waste that’s sent to landfill.
Peak Season Returns
The problem gets even bigger when it comes to seasonal peaks in returns. These times can present huge challenges for businesses because they generate eye-watering amounts of waste. With a greater focus on sustainability, businesses can make problems like this a thing of the past. There are entire marketplaces popping up online who buy stock in bulk and then resell it, albeit at a lower cost, but the products are being reused rather than ending up in landfill. These marketplaces have vast audiences who are ready to buy the products that they are adding, whether it’s fashion brands or refurbished electricals, consumers can buy products at a discount that would otherwise have gone to waste. Businesses benefit too because they can turn waste into profits. Rather than have masses of products ending up as waste, all of these items enter the circular economy where they are put to use in a much more positive way.
Sustainable Retail
The concept of sustainability is an attractive one for businesses in the retail sector. More companies than ever before are wanting to divert more of their product and material waste from landfill to speciality companies who reuse, recycle or resell. That said, there needs to be many more companies who specialise in this type of recycling so every item we use from clothing to homeware and even carpets can be recycled, creating a zero-waste economy that’s not only kinder on the environment, but more attractive to consumers and businesses. Sustainability is a business model rather than a trend or passing phase. Organisations often have divisions in their business dedicated to sustainability but they rarely integrate with the rest of the business. These departments must learn to work hand in hand if sustainability is to reach every area of the reverse supply chain. Companies need to create sustainable strategies to get everyone on board with the sustainability mission. When sustainability is integral to everyone’s role from the executives to juniors, that’s where real change will happen. Retailers who are actively looking to reduce their environmental footprint, enhance their reputation and maintain a competitive market share should consider:
- A public commitment to sustainability – Being accountable to consumers and investing in the circular economy, promoting the benefits of this and how it has a positive impact on the environment and customers
- Implementing a circular business model – These models prove incredibly beneficial for businesses and create huge amounts of value. They can eliminate waste, create a positive impact across the entire value chain and improve competitiveness. These models are incredibly viable from a financial perspective too.
- Rewarding consumers for sustainability – Retailers can build long term customer loyalty by rewarding customers ethical behaviour. This can be done through providing incentives for returning end of life products or those they no longer want to re-enter the circular economy, the provision of reuse or recycle initiatives and broader sustainability rewards and incentives.
There has never been a better time to commit to a circular business model. Increasing advances in technology, improvements in infrastructure and speciality companies who recycle and reuse unwanted products mean that retailers can embrace this model of sustainability and have confidence that it will prove beneficial on many levels.
