PA Consulting Group today launches the Keeping customer connections report which examines how retailers in the US, UK, and Europe engage with customers when products are no longer needed using circular economy opportunities.
The report, using insights from Ellen MacArthur Foundation’s precompetitive innovation programme the Circular Economy 100 (CE100), finds that retailers can build customer loyalty – and grow sales – by providing customers with reasons to stay engaged by returning to stores to resell, recycle, and donate clothing and electronics.
Retailers that provide genuinely useful services that ensure clothing and electronics are kept out of landfills have a greater opportunity to recognise economic value.
Data shows that the average American household has unused items in their home totalling $7,000 – that adds up to a wasted $875 billion that could be put back into the US economy. There is a large opportunity for retailers to help customers resell, donate, and recycle their products.
Karl Havard, retail expert at PA Consulting Group, says: “The circular economy can be a catalyst for spurring new innovations within the organisation – from both a cultural perspective, and how it helps companies approach the entire product and service design process from creation to sale.”
The research found customers were more interested in a convenient buyback scheme from retailers than being able to sell items at a higher price.
There is a clear case for simple buyback programmes. For retailers, this is an excellent opportunity to keep engaging with customers after the point of sale.
The research shows that people are interested in donations as a way of de-cluttering, particularly for electronics. There is also a large focus on the overall experience – friendly staff and information about the donation firms are essential. The survey found that:
Retailers will see more items recycled if they make it as easy as possible for consumers. Respondents haven’t ranked a financial reward highly, though in practice schemes with rewards can prompt behaviour change. The survey found that:
David Rakowski, circular economy expert at PA Consulting Group, says: “With ever more hectic lifestyles, consumers are looking for retailers who enable their lives. Embracing circular economy principles offers a route to do that whilst reducing environmental impact. We have seen that retailers embracing these principles are starting to disrupt current business models and build stronger relationships with their customers.”
Anna Vinogradova, senior manager at Walmart, says: “As we have learned more about reducing waste in our operations, we have embraced the concept of a circular economy, which moves away from a take-make-dispose approach to one where products, their residue or component parts, are cycled back into the economic stream. In order to help our customers more fully maximize the utility of the products they buy, we offer a variety of recycling and donation options such as electronics trade-in opportunities, clothing donations and packaging recycling programs.”
Cranfield University, Arizona State University, and PA Consulting Group surveyed 250 consumers in the US, UK, France and Spain on post-sale behaviours. The conclusions in the report reflect the analysis of the survey results, company case stories, and the authors’ experience across a range of markets and geographies. Additionally, the following CE100 Co.Project partners contributed to the wider report: Stuffstr; eBay; Kingfisher; Philips; Waste and Resources Action Programme (WRAP); Walmart; the Ellen MacArthur Foundation.
Keeping customer connections: How retailers can engage customers in circular economy initiatives