We’ve been hearing a lot about the circular economy lately and its efforts to reduce waste. But to really get a feel for it, consider the story of a company called Optoro. It is trying to solve the problem of retail returns. What happens to all those holiday sweaters, music systems, and power tools that get returned to stores every year? They don’t get put back on the shelf—it’s too much of a hassle for the retailer—so the stuff usually gets thrown away, donated, or sold to a liquidator. Most retailers, in fact, end up throwing out about 30% of their returns. It’s an inefficient process that costs the industry an estimated $260 billion annually in handling costs and lost revenue, not to mention causing a lot of stress on the environment.
That’s where Optoro comes in. At its Maryland warehouse, it tracks, tests, and sorts returns, and then finds ways to resell the merchandise at a fair price. The company, which is working with 20 of the largest retailers in the U.S., says it will process 25 million items this year—more than double the number from last year. And the result? The software is reducing waste and emissions in the reverse supply chain. For one of its customers, Optoro estimates a 60% reduction in waste and a 20% reduction in carbon.
For that kind of performance, Optoro won an award at The Circulars, announced to today at the World Economic Forum Annual Meeting in Davos. It is one of eight awards announced to businesses, organizations, and government officials who have shown outstanding leadership in the promotion of circular economy principles.