The retail industry is becoming increasingly focused on using sustainability to drive better business outcomes. From sustainable supply chains, to the circular economy, to a commitment towards responsible end of life product disposal, retailers understand that these issues are growing in importance. As this topic grows in relevance, many retailers have pledged to commit to sustainable practices. Most recently, Patagonia announced their mission to make their supply chain carbon neutral by 2025.
To discuss how retailers can embrace better practices through circular thinking, especially through responsible returns optimization, Optoro’s Senior Director of Sustainability, Ann Starodaj, and UPS’s Senior Director of Global Sustainability and Environmental Affairs, Crystal Lassiter recently joined forces on a webinar with Sustainable Brands.
Crystal kicked off the webinar with some of the latest stats on retail and its impact. Retail sales have grown consistently — especially e-commerce, which increased 10-12% in 2018.1 With that growth in sales, comes the associated increase of returns. On average, 11% of goods are returned, and that number can reach 30% or more in e-commerce. That all amounts to an estimated $390 billion worth of returned merchandise in the US alone. UPS also reported a record amount of returned packages on December 19, 2018. On what has become known as National Returns Day, UPS processed 1.5 million returned packages.2
The explosion of returns causes significant environmental damage. 5 billion pounds of waste is generated each year, 15 million metric tons of carbon dioxide and along with 1.6 billion gallons of diesel fuel consumed.3
Fortunately, a few retailers are leading the way to a better solution. Ann spoke about several brands with successful recommerce programs: The North Face, Eileen Fisher and Best Buy. The North Face and Eileen Fisher both have renew programs, where previously worn, damaged, defective or returned products are professionally cleaned and repaired so that they can be resold online and in stores.
And similarly, Best Buy has an outlet for refurbished electronics that sold an estimated 1.1 million products in 2018.4
At Optoro, we build returns technology that helps retailers route returned and excess inventory to secondary markets where it can be resold or to donation partners, eliminating unnecessary waste and increasing financial recovery on items that previously would have gone to waste.
1 NRF Forecasting 2018
2 NRF Forecasting 2018
3 Optoro and Environmental Capital Group Data, 2018
4 Retail Dive, 2018