Retailers Can Increase Loyalty By Providing Consumers With Opportunities To Resell, Recycle And Donate

Staff Report

Thursday, March 8th, 2018

PA Consulting Group launches the "Keeping Customer Connections" report which examines how retailers in the US, UK, and Europe engage with customers when products are no longer needed using circular economy opportunities.

The report, using insights from Ellen MacArthur Foundation's precompetitive innovation programme the Circular Economy 100 (CE100), finds that retailers can build customer loyalty – and grow sales – by providing customers with reasons to stay engaged by returning to stores to resell, recycle, and donate clothing and electronics.

Retailers that provide genuinely useful services that ensure clothing and electronics are kept out of landfills have a greater opportunity to recognise economic value.
Data shows that the average American household has unused items in their home totalling $7,000 – that adds up to a wasted $875 billion that could be put back into the US economy. There is a large opportunity for retailers to help customers resell, donate, and recycle their products.  

Karl Havard, retail expert at PA Consulting Group, says: "The circular economy can be a catalyst for spurring new innovations within the organisation – from both a cultural perspective, and how it helps companies approach the entire product and service design process from creation to sale."

The research found customers were more interested in a convenient buyback scheme from retailers than being able to sell items at a higher price.

  • Respondents would resell items if the store where they were purchased offered a convenient buyback program (72 per cent for electronics, 66 per cent for clothes)

  • Over half would resell items if they thought it would benefit their community and/or the environment (57 per cent for electronics and clothes)

  • Fifty nine per cent of clothing consumers and 55 per cent of electronics consumers were open to reselling items if it were simpler

There is a clear case for simple buyback programmes. For retailers, this is an excellent opportunity to keep engaging with customers after the point of sale.

The research shows that people are interested in donations as a way of de-cluttering, particularly for electronics. There is also a large focus on the overall experience – friendly staff and information about the donation firms are essential. The survey found that:

  • Seventy eight per cent of electronics consumers would donate items if it helps prevent electronic goods from going to a landfill

  • Over half (67 per cent electronics consumers, 59 per cent clothing consumers) would donate items if there was a simple way to do it

  • Half of clothing consumers (51 per cent) would donate items if they had good experiences (convenience, friendly staff, availability of information) when participating in donation schemes

Retailers will see more items recycled if they make it as easy as possible for consumers. Respondents haven't ranked a financial reward highly, though in practice schemes with rewards can prompt behaviour change. The survey found that:

  • Eight in 10 would recycle items if companies make it easy to do so (80 per cent clothing consumers, 79 per cent electronics consumers)

  • Clothing consumers would recycle if they are given more information about how companies plan to recycle the clothes (66 per cent)

  • Forty nine per cent of electronics consumers and 35 per cent of clothing consumers) would recycle if they were provided with financial rewards

David Rakowski, circular economy expert at PA Consulting Group, says: "With ever more hectic lifestyles, consumers are looking for retailers who enable their lives.  Embracing circular economy principles offers a route to do that whilst reducing environmental impact.  We have seen that retailers embracing these principles are starting to disrupt current business models and build stronger relationships with their customers." 

Anna Vinogradova, senior manager at Walmart, says: "As we have learned more about reducing waste in our operations, we have embraced the concept of a circular economy, which moves away from a take-make-dispose approach to one where products, their residue or component parts, are cycled back into the economic stream. In order to help our customers more fully maximize the utility of the products they buy, we offer a variety of recycling and donation options such as electronics trade-in opportunities, clothing donations and packaging recycling programs."