Coming Full Circle: Sustainable Retail In A Post-Recycling Age
PSFK considers emerging sustainable retail practices within the circular economy, tracing the new ways companies from fashion to food are designing sustainability into their business model from the get-go
In 2020, Colgate-Palmolive will finally deliver a recyclable toothpaste container. After more than two decades of mounting concern around plastic waste and discussions about sustainable initiatives, the 213-year-old company announced it would release a fully recyclable tube under its Tom's of Main brand, with plans to convert all products to 100% recyclable packaging by 2025: “Building a future to smile about means finding new packaging solutions that are better for the planet, but until now there hasn’t been a way to make toothpaste tubes part of the recycling stream,” said Justin Skala, Chief Growth & Strategy Officer for Colgate-Palmolive, in a statement.
But is this move by Colgate too little, too late? By 2025, the focus of corporate sustainability will have shifted, evolving from the use of recyclable materials to creating circular business strategies.
While Colgate pottered with laboratory testing, the recycling market collapsed. The exchange rate between the U.S. and China made a lot of recycling unprofitable, leading a number of municipalities to stop their recycling collection altogether. With the collapse of the international market, cities like Philadelphia have had to turn to burning much of their recyclable waste.
Compounding this problem is the fact that the majority of recyclable plastics doesn’t get recycled anyway. Only 9% of plastic packaging in the U.S. is recycled, 12% is burned and the rest ends up in a landfill—or even the sea. And while Adidas creates sneakers out of Pacific Ocean plastic and Walmart’s Asda uses similar debris to pave a parking lot, these programs are just delaying the inevitable: society ultimately has to deal with that plastic when it turns up in the waste system again.
What use is a new tee made from a mix of upcycled cotton and recycled fishing nets anyway when the used product needs to be processed again? Maybe we need to stop differentiating ‘single-use' from ‘recyclable' and come to the conclusion that nearly all plastic is used once. If we can grasp this notion, then we might be able to judge how corporations offload the responsibility to efficiently recycle on our local governments, which could seem an unfair and undue burden on them and our taxes.
Some retailers are already taking matters into their own hands. “We’re working with our suppliers and packaging manufacturers, looking at alternatives to plastics,” says Karen Graley, packaging manager at U.K. grocer Waitrose,” while the CEO of REI co-op explains, “We are in the throes of an environmental crisis that threatens not only the next 81 years of REI, but the incredible outdoor places that we love.” His recent call-to-action letter reads, “Climate change is the greatest existential threat facing our co-op. I believe we do not have the luxury of calling climate change a political issue. This is a human issue. And we must act now.”
When our researchers at PSFK studied hundreds of new ideas and signals developing within the sustainability space, we identified several emerging short- and long-term trends. Over the next 12-24 months, the focus for corporate sustainability programs dealing with product waste is likely to be what is defined as the Circular Economy. Beyond that, we spotted trends around new ways to avoid waste and inefficiencies. In this article, we explore the former set of trends and share them in a framework to help you as a business executive or even a consumer to consider how to approach sustainability.
No doubt, you’ve already read stories and reports on the Circular Economy, a concept around a cycle where we keep resources in use for as long as possible, extract the maximum value from those resources while in use, then recover and regenerate those resources at the end of their lives. By conducting pattern recognition on the latest ideas developing within this space, we identified a number of key pillars: receive, recycle, repair, refill, rent and resell. As corporations look to evolve their sustainability efforts, these six themes will guide them in developing a more holistic strategy. First we define the pillars, then explore what they look like in practice.
Receiving involves retailers and brands facilitating the simple return of their products and packaging at the end of what their owner thinks is their useful life. Sometimes this collection happens in the store, but at other times this gathering of used product may be more proactive. These materials are used to make new products, passed to external facilities to recycle, or end up in a landfill—which is currently the most likely result.
Building off of the notion of receiving, recycling concerns the reuse of materials as new products that the retailer and brand can leverage as part of their commercial business. The passing on of consumed materials to an external recycling facility or partner is not a part of this strategy.
Repairing involves fixing or upcycling product so that it either has a longer life or can be sold as new. This pillar includes both the servicing of products owned by customers and the repair of previously owned items.
Reselling concerns the creation of marketplaces that allow retailers or consumers to sell previously owned products.
Refilling is a system of avoiding packaging by expecting consumers to replenish the core product with their own reusable vessel. This creates efficiencies in production (mainly, bulk orders) and improves the frequency of brand-consumer interaction.
Renting is the short-term loan of products so that they can be reused by different consumers. The items are therefore more frequently employed and not left in storage, plus there is less demand for virgin product.
Pillars defined, now let’s take a closer look at how this framework for sustainability can manifest in business:
When it comes to the ways retailers and brands are facilitating the simple return of their products and packaging, there are several tactics. Sometimes stores choose simplicity and accept returns on premise. For example, U.K. grocer Sainsbury’s is planning to accept milk and glass soda bottles as part of a drive to halve the amount of plastic packaging it uses over the next six years. Department store John Lewis is also now taking back beauty packaging, which is traditionally hard to recycle. Levi Strauss has a take-back program that sells wares to a third-party who transforms old denim into insulation for community buildings.
But how effective is that drop box by the store door? It assumes consumers will remember to carry their products into a store—when on most trips, they still forget their reusable grocery bags. Some firms are therefore incentivizing the returns: Patagonia will accept any good-condition product that is not a “next-to-skin garment” and provide a gift card for up to $100. Similarly, Canadian outdoor clothing company Arc’teryx has a new program called Rock Solid Used Gear that incentivizes customers to bring their lightly used products back to the store in exchange for a gift card valued at 20% of the item’s original retail price. IKEA Canada also allows customers to “sell back” their gently used furniture to the store and receive store credit. Adidas has a new system in the U.K. called Infinite Play that lets consumers return any branded products purchased within the past five years in exchange for a gift card and loyalty points.
Meanwhile, some companies aren’t just waiting for the shoppers to turn up; they’re going out to get their used product: H&M ran a test earlier this year in New York where it offered Lyft rides to the store for shoppers planning to deliver used product and John Lewis is sending trucks out to collect larger items in the U.K. Vogue Business says that “at a time when brands are finding it increasingly expensive to attract and retain customers, take-back programs are a way to stand out.”
Receiving product doesn’t necessarily imply the recycling and regeneration of materials into new products for the retailer and brand to use in commercial business. There are companies developing enterprise-level strategies when it comes to the pre-recycling stage: For instance, H&M picks up clothing and shoes in more than 60 countries and sells some of the materials back to the companies who made the original clothes.
The actual reprocessing of the materials into new product is burdened with challenges, not the least of which is the presence of potentially harmful constituents: The fabric from a used pair of jeans could contain formaldehyde, carcinogenic dyes, toxic heavy metals and more, which poses problem for enterprises looking to avoid including an unknown assortment of nefarious chemicals in the next generation of product. One solution to this issue is implementing new recycling processes: a startup called Evrnu breaks down used fabric into constituent molecules, enabling the isolation of any unwanted materials as well as desired ones, like pure cellulose, for repurposing.
While used items often get shredded and returned as raw ingredients for the product, some companies are fixing, or upcycling, product so that it either has a longer life or can be sold as new.
Luxury U.K. department store Harvey Nichols now has an after-care service called The Restory that offers not only to repair and restore premium items but even “reimagine” them. After years of criticism, Apple is finally shipping official parts to repair shops that have had to use third-party materials in the past.
Atelier & Repairs is a boutique fashion label that specializes in the remaking of old and used products. Brands like Gap and Deckers have collaborated with them to explore the repair of old hoodies and jeans to create fresh fashion that’s not made of virgin stock. At the announcement of the Gap collaboration, the brand’s Head of Adult Design, John Caruso, told reporters that the partnership with Atelier & Repairs allowed the company to reinterpret and “reimagine their classic styles, lengthening the traditional product life cycle.”
California-based b-corp Dhana takes this remake concept further by upcycling a customer’s memories into a new outdoor coat, including their concert tees, Comic-Con costumes and other memorabilia into the lining.
Patagonia seems to be one of the most progressive brands in the repair and remake space, reportedly fixing 100,000 items each year in 72 repair centers globally. Some of these items are now appearing on the site of its sub-brand WornWear, which has an online presence and recently opened its first store in Denver, Colorado. WornWear doesn’t just repair and resell items: the designers also reimagine them by mixing pieces from recycled products they have. Vogue Business reports that the new line doesn’t cannibalize existing sales, but “brings in customers who are, on average, ten years younger than the typical Patagonia shopper.”
As products get returned, repaired or remade, we’re witnessing the creation of marketplaces that allow retailers or consumers to sell previously owned products. German online fashion retailer Zalando has been testing a second-hand store concept for women's fashion items called Zircle. The store sells used fashion items that were purchased back from customers on their Zalando Wardrobe app. One objective of the test is to understand if the company can reach new customers.
Premium U.K. department store Selfridges has been working with third parties like Vestiaire and Depop to develop shop-in-shops that resell shoppers' apparel. The Vestiaire Collective space also comes with a resale point where customers can deposit items that subsequently appear on the brand’s app for sale.
Online retail platform Farfetch recently launched Second Life, a pilot initiative that allows consumers to resell the designer bags sitting in their wardrobe. “We're on a mission to become the global platform for good in luxury fashion—empowering everyone to think, act and choose positively,” reads their site. “Services like Farfetch Second Life help our customers extend the life of the clothes they buy.”
Meanwhile, with every new purchase, fashion brand Cuyana is including a shipping label that helps consumers send unwanted clothes to reseller thredUP, who will in turn send coupons for every successful resale. “Young shoppers like pre-owned goods for their lower prices and ability to express concern for causes like sustainability,” says fashion editor Lucy McGuire. Research commissioned by thredUP reports that the total secondhand apparel market will reach $51 billion in the next 5 years and will be larger than Fast Fashion in 10 Years.
Retailers and service providers are also providing more ways to refill and restock certain products. U.K. grocer Waitrose has launched trials of its Unpacked system to gauge shoppers’ reactions to packaging-free food and drink options including the use of refills. They encourage shoppers to not only bring along reusable shopping bags but also their containers for filling up with the products during their Unpacked shop. The containers can be any material, size, shape or weight, but if shoppers don’t have anything to hand at home, they're welcome to buy bags/containers in store. Waitrose even encourages customers to bring their own coffee cup to enjoy a brew in the aisles.
In London, The Body Shop now offers a product refill station, while at Bleach London shoppers can buy glass bottles filled with their favorite shampoo and conditioner, then return for refills. To track the growing number of zero-waste/refill stores in the U.K. capital, an advertising agency created the Useless London online map.
On U.S. college campuses, rather than selling new bottles of water, The Coca-Cola Company has been trialling PureFill refill stations. In Sydney, the vegan online retailer Flora&Fauna has a new brick-and-mortar store that offers refills of zero-waste goods.
NYC's fast-casual chain Dig is testing a closed-loop dishware program where restaurant goers receive a reusable bowl and lid with the expectation that they return with it every time they visit the brand's Washington Square Park outpost.
Similar to a pattern observed with receiving, this refill service is not only taking place in the store, but also in the home. TerraCycle has been a pioneer in the recycling movement: its Loop system delivers everything in a returnable container. Brands like P&G and retailers like Kroger have partnered with Loop, now letting shoppers enjoy an array of package-free products, including Crest oral rinse, Tide laundry detergent and even Häagen-Dazs ice-cream. “The response has been overwhelmingly positive. It's phenomenal how many people have signed up for it,” said Loop co-founder Tom Skazy to PSFK. “Consumers understand that there's a garbage problem. While some prioritize the environmental aspect, others really like the design aspect, and some really like the convenience aspect. When you put all that together, it's a pretty big ecosystem of benefits.”
And finally, brands are also exploring the short-term loan of products so that they can be reused by different consumers. Some of this has been pioneered in the luxury fashion space for a few years now (think services like Rent the Runway), but there are signs of more mainstream options. H&M, for example, has launched its first clothing rental service at a newly refurbished store in Stockholm, following similar efforts by Banana Republic, Urban Outfitters and Ann Taylor Loft. Levi’s is exploring the space through a partnership with Rent The Runway. “For this crowd, consignment sites like thredUP and Poshmark, as well as the rental services, offer a lower-cost way to keep the ‘Gram fresh without hoarding clothes,” writes Ankita Rao in an article entitled ‘Clothes Are Canceled’ on Vice.com.
Rental goes well beyond apparel—IKEA is renting furniture, Lego has the service Netbricks for the rental of its little plastic building blocks—but fashion is where the groundswell is. According to research by GlobalData, the U.S. garment rental market was worth $1 billion in 2018, less than 1% of the total apparel market, but it also grew 24% in that year compared to 5% for the wider clothing market. Different ways to rent, like P2P platforms, are cropping up in the clothing rental space as well: Wardrobe is a just-launched sharing network operating out of local dry cleaners in Manhattan, letting members borrow high-end, designer and even vintage pieces from each other's closets and solving for the common issues around renting like convenience and value.
As retailers evolve beyond the classic Reduce, Reuse, Recycle mantra to embrace the six pillars described above, they ultimately are moving toward enabling closed-loop systems, embedding sustainability into their business model in a way that merges seamlessness and customer satisfaction with avoidance of waste creation in the first place and repurposing of original materials. This focus is not without good incentive: consumers are a driving factor in the push for true sustainability, wielding their spending power with retailers effecting the changes they want to see. Nielsen found that 81% of surveyed consumers think companies should support improving the environment (this sentiment was particularly strong among millennials and Gen Z), while 50% of CPG growth between 2013 and 2018 came from sustainability-marketed products.
Based on these signals, what could the future look like? A zero-waste restaurant in Brooklyn may give us a glimpse. Mettā re-opened earlier this fall in Fort Greene, partnering with regional farmers to secure ingredients from the source at their peak, concentrating on eco-friendly transportation and preservation methods, and curbing water waste wherever possible. Further, the business purchases electricity from 100% renewable sources, and offsets the 75% of its carbon footprint generated from food production by buying sequestration initiatives, which harness or avoid releasing an equivalent+ amount of carbon into the environment, according to the company's website.
While perhaps a more extreme example, Mettā's viability proves that businesses are taking the next generation of sustainability seriously, moving beyond the ineffectiveness of recycling into an era of inherent sustainability and investing in thoughtful strategies to enable consumption without destruction.
But why should businesses really bother about what a restauranteur is creating in Brooklyn or a grocery store is doing in London? Maybe because a massive population of young, militant people are emerging as potential consumers, who know things can be different and are determined to make them better. They have Greta Thunberg and now there are activists like Feroz Aziz. These passionate minds have better and faster communications tools than your social listening platform can offer and can amass faster than your staff can fire-drill. Moreover, there is infinitely more of them than there are of you, so businesses need to align to a new framework for sustainability and retool for a new set of practices.