New research from ReBound Returns and Advanced Supply Chain (ASC) has revealed a gap between retailers’ circularity ambitions and the value they are recovering from returned products.
The Circularity Index, based on research among 150 senior leaders at mid-to-large UK and European retailers, found that 86% have an established approach to circularity in returns, with practices including resale, refurbishment, repair and recycling regularly used across the business. For 27%, circularity is a core part of how returns are managed.
However, translating those strategies into commercial value remains difficult. On average, 12% of returned items generate no value, while only 9% of retailers resell more than half of their returned products at full price.
There is also a significant opportunity still to be captured. 82% of retailers believe that up to half of their returned stock could generate additional value through enhanced recommerce strategies, while 62% already make regular efforts to recover value from goods that cannot be resold.
The findings suggest that while circularity has moved beyond isolated initiatives for many retailers, consistent value recovery from returned stock remains less mature.
Stuart Greenfield, UK & European Sales Director at Advanced Supply Chain, said: “Retailers have made clear progress in building circularity into their returns strategies, but the data shows that having a circular process in place does not necessarily mean retailers are maximising the value of every returned product.
“Returns have traditionally been treated primarily as a cost: measured through transport, processing and warehousing spend. The opportunity now is to look at what comes back as inventory with potential value, and determine the best route for each item, whether that is resale, refurbishment, repair, donation or recycling.
“That requires greater visibility and better decision-making throughout the returns journey. What happens after a product comes back can have a direct bearing on margin, waste and the wider performance of a retailer’s circularity strategy.”
The findings come as regulation is placing greater focus on what happens to products and inventory at the end of their initial sales journey, including through the EU’s Ecodesign for Sustainable Products Regulation (ESPR).
Inge Bujakiewicz-Baars, Head of Sustainability at ReBound Returns, said: “Regulation is bringing circularity further into day-to-day retail operations. The focus is moving from commitments and targets towards the practical question of what happens to products once they can no longer be sold in their original form.
“Retailers that have clear processes for assessing, routing and recovering returned products will be better placed to respond to these requirements. Circularity needs to be built into operational decision-making, from inventory and returns management through to resale, refurbishment and recycling.
“The Circularity Index shows that retailers recognise the opportunity. The next step is turning that recognition into consistent performance.”
Read the full Circularity Index here: https://advancedsupplychain.
