As the end of the financial year approaches in April, retailers have several options to begin their spring cleaning. A new fiscal year allows companies to evaluate their spending over the past 12 months and look to make any changes as budgets refresh and new targets are set.
With return rates higher than ever before, ecommerce on the rise, brick and mortar struggling and the uncertainty of Brexit impacting consumer purchasing decisions, the landscape is rocky. Retailers are also expected to support the circular economy, especially with brand ethics and transparency increasingly affecting where consumers buy from.
Addressing returns rates and serial returners
The competition for customer loyalty has resulted in many online retailers providing free returns, delivering items in packaging that they can be returned in, and operating ‘try before you buy’ models. While a retailer’s returns policy can often entice customers, some consumers end up taking advantage of this system, returning a larger number of items than they keep.
Consequently, retailers find returned items piling up in warehouses, gathering dust and depreciating in value. In the past, many have turned to landfill as a solution for this, but this is an unsustainable and damaging process.
In the new financial year, retailers have an opportunity to encourage their customers to return less, by changing returns policies or by providing fun tools to help customers make more informed choices about what they are buying, such as virtual fitting tools that have already become a big hit for some retailers. Educating shoppers about the impact returns can have will also help consumers to make more environmentally-conscious choices, reducing the chance of them spending money on items they don’t want and saving them the hassle of returning those products.
Extending the lifecycle of products
Fast fashion retailers encourage the quick disposal of items as soon as they are no longer in style. Additionally, these retailers often make items using cheaper materials and processes, resulting in garments that do not last as long. This encourages consumers to repeatedly buy new replacements, increasing the demand on landfills.
According to The Guardian, extending the life of a garment by an extra nine months reduces its environmental impact by between 20 and 30%.
In the new financial year, retailers need to make responsible decisions to reduce the environmental impact of their products, increase their lifecycle and promote the recycling of their products as much as possible. Consumers, too, must consider a company’s ethics before deciding where to purchase from.
Some retailers are leveraging online auction marketplaces to extend the lifecycle of clothing and other apparel. B-Stock for example operates the world’s largest network of B2B marketplaces for returned and excess apparel, shoes, and accessories. Some of the world’s largest apparel retailers are using B-Stock’s online marketplace platform to sell over 20M units of apparel annually.
Recycling over landfill
In 2017, one major fashion retailer (that is known to many for its ‘fast fashion’ garments) facilitated the recycling of more than 17,771 tonnes of textiles – the equivalent of 89 million T-shirts. It is becoming increasingly ‘fashionable’ to be environmentally friendly and to provide consumers with ways to be eco-friendlier too. Brand ethics and transparency are increasingly affecting where consumers decide to spend their money.
To increase sales and encourage customer loyalty in the new financial year, retailers can choose ways to recycle their own waste, including packaging and other materials, and provide and promote more ways for their customers to responsibly dispose of their products.
With Brexit looming and a lack of many specifics to show how this will affect businesses, many retailers feel that they are unable to prepare most effectively for this huge change that is due to take place before the new financial year begins.
One way to maximise profits before this time is to shift unwanted stock through an online B2B marketplace, such as B-Stock. These marketplaces facilitate the resale of products that have been returned or damaged and would otherwise sit idle in a warehouse or end up in a landfill.
The selling of this excess stock supports a circular economy and reduces waste, providing retailers with a sustainable way to shift their unwanted stock, avoiding the traditional landfill option and saving money along the way. Furthermore, if Brexit causes an issue with supply chains, such as problems at customs, retailers can buy their products through B-Stock, directly from the world’s largest retailers and manufacturers. This will reduce the disruption for their customers and avoid a dip in profits.
To date, B-Stock has enabled the recycling, repurposing, reuse or resale of over 180 million items through a total of 338, 748 auctions.
By Ben Whitaker, EMEA director at B-Stock