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Retailers Can Increase Loyalty By Providing Consumers With Opportunities To Resell, Recycle And Donate

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SOURCE PA Consulting Group

NEW YORK, March 7, 2018 /PRNewswire/ -- 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.

  • Respondents would resell items if the store where they were purchased offered a convenient buyback program (72 per cent for electronics, 66 per cent for clothes)
  • Over half would resell items if they thought it would benefit their community and/or the environment (57 per cent for electronics and clothes)
  • Fifty nine per cent of clothing consumers and 55 per cent of electronics consumers were open to reselling items if it were simpler

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:

  • Seventy eight per cent of electronics consumers would donate items if it helps prevent electronic goods from going to a landfill
  • Over half (67 per cent electronics consumers, 59 per cent clothing consumers) would donate items if there was a simple way to do it
  • Half of clothing consumers (51 per cent) would donate items if they had good experiences (convenience, friendly staff, availability of information) when participating in donation schemes

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:

  • Eight in 10 would recycle items if companies make it easy to do so (80 per cent clothing consumers, 79 per cent electronics consumers)
  • Clothing consumers would recycle if they are given more information about how companies plan to recycle the clothes (66 per cent)
  • Forty nine per cent of electronics consumers and 35 per cent of clothing consumers) would recycle if they were provided with financial rewards

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 this 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.

About the CE100
The Circular Economy 100 is a pre-competitive innovation programme of the Ellen MacArthur Foundation established to enable organisations to develop new opportunities and realise their circular economy ambitions faster. It brings together corporates, governments and cities, academic institutions, emerging innovators and affiliates in a unique multi-stakeholder platform. Specially developed programme elements help members learn, build capacity, network and collaborate with key organisations around the circular economy.

About Co. Projects
Co.Projects are opportunities for formal pre-competitive collaboration between CE100 members. They are driven by members, for members and their focus can range from research initiatives to pilots and toolkits. Co.Projects leverage the CE100 network with the aim of exploring opportunities and overcoming challenges commonly faced by organisations making the transition to a circular economy, and which organisations may not be able to address in isolation.

About the Ellen MacArthur Foundation
The Ellen MacArthur Foundation was created in 2010 to accelerate the transition to a circular economy. The Foundation works across five areas: insight and analysis; business and government; education and training; systemic initiatives; and communication. In its business and government programme, the Foundation collaborates with its Global Partners (Danone, Google, H&M, Intesa Sanpaolo, NIKE Inc., Philips, Renault, Solvay, Unilever), Core Philanthropic Funders (SUN, MAVA, players of People's Postcode Lottery) and its CE100 network (businesses, universities, emerging innovators, governments, cities, affiliate organisations), to build capacity, explore collaboration opportunities and to develop circular business initiatives.

About PA Consulting Group
An independent firm of over 2,600 people, PA Consulting Group operates globally from offices across the Americas, Europe, the Nordics, the Gulf and Asia Pacific. PA's deep industry knowledge together with skills in management consulting, technology and innovation allows them to challenge conventional thinking and deliver exceptional results that have a lasting impact on businesses, governments and communities worldwide. This extends into PA's work in sustainability, where they enable organisations to make the most of the circular economy. PA advises major brands in making their supply chains more commercially and environmentally sustainable. They apply their innovative technology and manufacturing expertise to reduce – or derive value from – waste, and they design new business models to help organisations embrace the growing market for sustainable products and services. PA is proud to be a member of the Ellen MacArthur Circular Economy 100 and a partner to the UN Global Compact Project Breakthrough. PA. Make the Difference.

About Walmart
Walmart Stores, Inc. helps people around the world save money and live better - anytime and anywhere - in retail stores, online, and through their mobile devices. Each week, over 260 million customers and members visit our more than 11,600 stores under nearly 60 banners in 28 countries and eCommerce websites. With fiscal year 2017 revenue of $485.9 billion, Walmart employs approximately 2.3 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity.

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