Globally there is a huge demand to change the way we interact with and treat the natural world, particularly since news broke in late 2018 that we have only 12 years to limit catastrophic climate change.
Whilst previously the focus would be on individual behaviour, such as not using plastic straws or carrier bags, more attention is turning to companies and large corporations who have a much more significant impact on the environment.
The retail industry can be particularly wasteful: returns and excess inventory exceeds $1.2tn globally. Many of the items that are returned when consumers decide they no longer want them end up sitting in a warehouse or heading straight for landfill. Products that have been damaged or are no longer fashionable are notoriously hard to re-sell, and retailers are forced to dispose of them.
In the UK fashion industry alone, around 300,000 tonnes of clothes are sent to landfills each year, and less than 1% of the material used in clothing production around the world is recycled after use. The traditional processes of handling this type of inventory are unsustainable; changes must be made to reduce the damage done to the environment.
But how can companies sustainably and practically deal with excess stock?
Take H&M for example: the company’s nonprofit arm – the H&M Foundation – recently opened a hydrothermal textile recycling plant that can separate cotton and polyester from clothing made with mixed fabrics. Once separated, the materials are sorted for reuse in new garments, including jeans.
Retailers and manufacturers can also take advantage of the growing secondary market demand for returned, excess and other liquidation inventory. Online B2B marketplaces, like the ones B-Stock operate, enable retailers to tap into a secondary market buyer base and sell excess goods to thousands of small businesses for reuse, resale, and repurposing.
Access to this buyer base means more opportunity to find a market for items that otherwise would be idle, destroyed or placed in landfill. This enables the circular economy by allowing products to be repurposed and significantly reduces the damage done to the environment.
Expanding secondary markets
Yet, there is still more that can be done. There are many verticals where the lifespan of a seemingly obsolete product can be extended. For example, automotive, consumer-packaged goods, biopharma, hospitality and the oil and gas sector are all areas that have high rates of surplus/excess inventory. The good news is, there are solutions providers who can help companies find a second life for these surplus goods.
One industry that is becoming more embracing of the circular economy is the consumer electronics space, specifically smartphones. In January, B-Stock reported that the used phone market is currently worth $25bn and is growing faster than the primary market.
Today, the average mobile phone will be used by two to three people before it is scrapped. This is a huge step towards sustainability for the mobile industry and shows that there is indeed a growing market for used products, fuelling and supporting the circular economy.
A 2018 survey showed that 62% of American companies are planning to move towards a circular economic framework as part of their business strategy. Part of this should include rethinking traditional methods for returned, excess, and otherwise obsolete stock and replacing them with a new viable solution that enables the recycling, repurpose, reuse or resale of items.
By Ben Whitaker from B-Stock, a leading liquidation platform