The role of retail in a world going circular: Five steps businesses can take to harness their buying power and drive action

As shoppers flock to (online) malls this season, businesses have a key responsibility to provide sustainable offerings. Photo by Heidi Fin on Unsplash

The power of procurement: buying teams must take the wheel in driving circularity

Our analysis with Action confirmed: the vast majority of a retailer’s emissions and material use occur at the product level — and that the most impactful change can be driven by buying teams tweaking their product assortment. But with an often-varied product assortment and hundreds of suppliers, this can seem like a daunting task. We’ve boiled it down to five steps:

  1. Focus attention on ‘change’ products. Once the relative circularity and commercial relevance of products in an assortment is known, the path forward is clear: target items that are highly relevant to your revenue, but have low circularity. Products that sell in far lower quantities, or have good-but-not-great circularity can always be improved — but they shouldn’t be your first priority.
  2. Understand the nature of your ‘change’ products. What are these items like? Are they long-lasting goods — like appliances, clothing or furniture? Are they disposed of relatively quickly, like paper plates or party decorations — or even consumed through their use, like cleaning supplies or candy bars? Understanding how your products will most likely be used after they’ve been bought will help hone in on the most suitable strategies for boosting circularity. We’ve already developed lists of the most relevant circular strategies for each product type so that buyers can quickly identify their best options for improvement.
  3. Choose strategies for each stage of a product’s life. Going circular isn’t as simple as recycling a good rather than throwing it in the bin: it requires changes spanning design, use and end-of-use. Has a product been designed for easy repair, or recycling when it’s stopped being useful? What materials have been chosen — emissions-intensive plastic, or regenerative, sustainably sourced wood? Are there options for customers to refill, reuse or repurpose the product? Is recycling possible given your locale’s resource recovery infrastructure — and is it made easy for consumers to carry out? Circular strategies can address all these questions, ensuring a product’s impact is as small as possible from start to finish.
  4. Connect and collaborate with suppliers to turn strategy into action. At this stage, you know which strategies you’d like to try out for your products — but suppliers will have to be brought up to speed. Share your insights and discuss what’s feasible and affordable, before collectively setting targets. Buying teams should set KPIs — which through the CTI framework can be translated into a single company-wide metric, allowing monitoring across a diverse portfolio of products.
The Circular Change Matrix allows a buying team to prioritise the products that will contribute most to improving the circularity of an assortment, based on a product’s ranking along two dimensions. Framework and image developed by Circle Economy.

The aftermath: what does your business stand to gain?

We now know there’s no reason to disregard sustainability in business: the so-called ‘eco-wakening’ is spreading among consumers across the globe, in high-income nations and emerging economies alike. The numbers show just how much sustainability is valued: in the US, revenue from sustainable products spiked 29% between 2013 and 2018, and these goods grew 5.6 times faster than their regular counterparts.

Taking the plunge: a circular product line is only the first step

Going circular is a lengthy journey: it will require education, radical collaboration and drive to translate data into actionable targets and vague ambitions into achievements. But retailers stand a lot to gain — from boosting customer satisfaction and increasing brand value to meeting sustainability goals. Circle Economy’s work with Action has already gleaned promising results: by following our five step process, the retailer is taking the first steps to make practical changes to some of its best-selling products. And contrary to popular opinion — they’re showing that this doesn’t have to mean giving up on their goal of selling affordable products.

Retailers stand to gain a lot from going circular — but collaboration will be key to getting there. Photo by Tyler Franta on Unsplash

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Circle Economy

Circle Economy

We empower businesses, cities and nations with practical and scalable solutions to put the circular economy into action.