What: NRF report on Retail Circularity: an action guide for retailers

Why it is important: A guide developed for retail executives and teams as they explore and implement circular business models. Also a resource prepared as a tool to highlight circular retail opportunities, and more.

The Retail Circularity Action Guide 2024, by Deloitte and the National Retail Federation (NRF), focuses on the challenges and opportunities for retailers to adopt circular business models. The report highlights the need for retailers to transition from traditional linear product lifecycles to more sustainable and circular practices.

In order to create the report, NRF shared a 13 question circularity survey, receiving back 100 individual survey responses, and 83 unique company responses.

They found that there were 4 main key challenges in order to adopt circular business models.

Firstly, access to alternative materials. Retailers need greater access to recycled and alternative materials to design and produce circular products at scale.  Secondly the industry standards.  The safety of existing products, quality, and shipping standards are not designed with circularity in mind, requiring industry-level changes. Supply chain and Infrastructure was the third challenge.  Retailers struggle to collect and supply products for circular models due to limited access to high-quality recovered materials, post-customer products, and parts for repair.  And lastly recycling and tracking. Advancements in recycling solutions and infrastructure are needed to lower costs, and retailers need better tracking and grading systems to monitor product disposal and recycling.

The report outlines several strategies for retailers to adopt and implement circular business models.

These were:

1. Product Design: Designing products that can be repaired, reused, resold, or recycled at end of life.
2. Collection and Reverse Logistics: Implementing collection programs to take back used products and partner with third-party organizations for efficient reverse logistics.
3. Resale and Rental: Offering resale and rental programs to extend product lifecycles and create new revenue streams.
4. Repair and Refurbishment: Providing repair services to extend product lifecycles and enhance customer loyalty.
5. Recycling: Developing recycling programs to process and sell recycled materials, reducing waste and environmental impact.

The report emphasizes the importance of consistent company wide strategy, and support from leaders to  successfully implement circular business models. It also highlights the need for retailers to track and measure the effectiveness of these initiatives through various criteria, such as revenue growth, customer engagement, and environmental impact.

NRF Report: Retail Circularity