Retailers face mounting pressure to balance sustainability with profitability, as consumers increasingly prioritise eco-conscious brands.
Retailers worldwide are shifting their focus to sustainability, with an increasing emphasis on circularity – a system aimed at minimising waste by keeping resources in use for as long as possible.
A recent report by Deloitte, in partnership with the National Retail Federation (NRF), explores how retailers can leverage circular business models to meet consumer demand, reduce environmental impact, and build stronger customer relationships.
Embracing circular business models
Circularity represents a significant shift in retail strategy, moving beyond traditional “take-make-dispose” models towards approaches like resale, refurbishment, and repair.
These strategies resonate with consumers who value sustainable products and increasingly expect brands to reflect their environmental values.
According to Deloitte’s report, resale, refurbishment, and recycling initiatives offer tangible ways for brands to strengthen customer loyalty and, ultimately, sales.
Resale and refurbishment have shown particularly strong growth in recent years. Platforms like ThredUp and Depop demonstrate how circularity can successfully attract younger audiences by providing affordable, stylish, and eco-friendly options.
With major retailers exploring “take-back” schemes and secondhand marketplaces, brands are finding new ways to offer value without the environmental cost of constant new production.
Enhancing supply chain resilience
Incorporating circularity not only benefits customers but also builds resilience within the supply chain. By reusing and recycling materials, retailers can mitigate the impact of raw material shortages and price fluctuations.
Deloitte’s report encourages businesses to design products with durability and reuse in mind, which simplifies the repair and recycling processes. This forward-thinking approach means that companies can be less dependent on volatile raw material markets, improving both sustainability and cost-effectiveness.
Retailers must also work with suppliers to ensure that materials are ethically sourced, durable, and suitable for recycling or refurbishment. Major brands are already taking action: Patagonia’s Worn Wear programme, for instance, repairs and resells previously owned products to extend their lifespan.
These initiatives not only enhance the brand’s environmental credentials but also appeal to customers looking for cost-effective, sustainable products.
Meeting consumer expectations through transparency
Consumers today expect brands to be transparent about their environmental impact and circularity practices.
Deloitte’s report advises retailers to clearly communicate their sustainability initiatives and make it easy for customers to participate in circular programmes, whether through in-store recycling bins or detailed product lifecycle information.
Educating consumers on the benefits of circularity can foster greater trust, while empowering customers to take an active role in sustainable shopping.
Transparency is crucial for effective circularity in retail. By highlighting the environmental benefits of sustainable purchases and showing how these programmes support long-term goals, retailers can engage more meaningfully with consumers.
Well-implemented transparency efforts not only drive customer loyalty but can also set companies apart in an increasingly eco-conscious market.
In an evolving retail landscape, circularity is no longer just a trend – it’s a pathway to a more sustainable future for businesses and shoppers alike.
Source from Retail Insight Network
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