Following our first installment on “Why circular economies?”, we now assess the how retail and commercial spaces can be used to support circular models in their respective industries.
Consumer movement towards a circular economy
The proliferation of the internet and digital media revealed the severe environmental impacts of the linear production-consumption system, causing a shift in consumer behavior, where consumers are now favoring brands and stores that are environmentally conscious (Waste Couture: Fast Fashion vs the Environment).
The Coronavirus pandemic exposed the vulnerabilities of the retail and commercial industries. Disruptions in trading resulted in significant economic losses and rocketing unemployment rates. How can a circular economy model soften the socio-economic repercussions of the pandemic?
The changing face of retail: Recycle, Re-sell, Donate, Rent and Repair
The fast-changing perceptions of consumers has pressured retailers into adapting along with them, by designing processes that will extend the retailer-customer relationship beyond the purchase. By using the circular economy model, retailers have introduced post-purchase engagements with their clients (Figure 1).
Figure 1: Retailer Circular Economy
American retail giant, Walmart, undertook a study in 2018 on consumer responses to end-of-use options for electronics and clothing. The study revealed the following:
- 72% of consumers would resell their electronic items if the store offered a convenient buy-back program.
- 70% are more like to donate unwanted clothing to prevent it from being wasted or disposed.
- 59% would donate clothing if companies make it easy for them to do so.
- 80% of consumers agreed to recycle both electronics and clothing if companies facilitated on their behalf.
For €7.50 a month, customers can rent out a pair of Mud Jeans (made from organic cotton) for a year. After one year, they have the option of leasing for another year, or end the lease and receive a voucher for the next purchase.
Home DIY giant, Castorama (Poland) introduced repair centers in their stores. For over 16 years, the repair centers serve to test products with combustion engines (e.g. lawnmowers), panels for lights and functionality of power tools such as drills and jigsaws.
With brand loyalty becoming increasingly harder to come by, creating long-term relationships with customers encourages them to come back. Walmart found that retailers investing in circular economies gain valuable insight into how customers use their products and how often they are replaced. This, in turn, is filtered into the product life cycle, development, innovation and sales departments.
Can shopping malls create a circular economy?
ReTuna Shopping Mall (Figure 2) in Eskilstuna, Sweden, became the world’s first recycling shopping mall in 2015. Everything sold in the 14 specialist shops, is either recycled, reused or has been sustainably/organically produced. Even its artsy décor is made from recycled materials. The mall also serves as an education and recycling hub, where customers can drop off their recycling and donations for stores to resell or create new items from it.
Figure 2: ReTuna Mall
Viewing commercial space differently
In an attempt to curb the spread of the Coronavirus, severe lockdown policies were enacted, reducing trading times for restaurants, bars and entertainment facilities. However, rental charges remained unchanged, adding to the financial stress of a dramatic decline in revenue.
The Ellen MacArthur Foundation reported on the growing trend of shared-use schemes, where restaurants in New York City, that are typically closed during the day, turn into a co-working space, where companies can utilise it for meetings or office requirements (Figure 3). This concept benefits both the restaurant (extra revenue and publicity), and the corporates (cheaper rent, convenient location), and is fast becoming a popular way of creating value to underutilised, high value spaces.
Figure 3: Co-working Spaces
Flexible office space realtor, WeWork, survived the crush of the pandemic and is expected to continue its profitable ride, post CoViD-19. WeWork focuses on short leases and move-in-ready spaces (Figure 4), in addition to co-working.
Figure 4: A typical WeWork rental space.
Think ambitiously, but start small
Optimising retail or commercial space along the circular economy principles prolongs the life of the asset, and keeps it within the economic loop. By minimising the time an asset is idle, fewer resources will be needed to keep it in value, and thus less waste is produced.
Given the fast-changing relationship between consumers and retailers, the shift to a circular business system is critical. Walmart suggested a three-step process to follow when changing to a circular economy model:
- “Think big” when creating your circular model strategy.
- “Start small” with innovative, insight-driven services and then iterate.
- “Scale fast” to implement the changes and enjoy the benefits!
Circular economy models are a key focus at Don’t Waste. Our systems and technology support circular models, which are aligned to the waste hierarchy at all times. With our advanced tracking system, retailers can easily trace the final destination of their products, be it through recycling, reuse or donation, and feed this back to customers ensuring transparency across the value chain.
Don’t Waste provides industry leading business intelligence, site management, and waste management services to Property, Retail, Commercial, Industrial and Hospitality industries. Our customers include the world’s leading property management groups. To find out more about our innovative value-added systems and services in onsite waste operations, contact:
Linus Naik- Group Manager: Sustainability & Business Development (Email: firstname.lastname@example.org I Mobile: +27 82 552 0675).
Michael Foreman- Managing Director UK (Email: email@example.com I Mobile: +44 7939 027193).