Retail: The Circular Economy

Is this Emerging Trend here to stay?

Introduction

Our society functions on a linear path in which manufacturers look to constantly improve their products, resulting in a constant cycle of new product releases — all of which feed on finite resources and rely on the obsolescence of earlier models. You could call this the “take, make and waste” model.

The circular economy model has emerged as the leading alternative to a linear way of life. By tackling the problem of sustainable energy head-on, proponents of a cyclical economy hope to change the landscape of our lives. In this article, we try to explain what a circular economy is and look into the data behind the possible solutions.

What Is a Circular Economy?

It is a 360-degree evolutionary approach to the life of a product or service and functions as a closed-loop system, a framework around the way the world consumes or innovates that product or service.

It sets out to extend the lifecycle of products through sharing, leasing, reusing, repairing, refurbishing, and recycling materials and products for as long as possible.

It requires a different kind of thinking, one that prioritises the elimination of waste through the superior design of materials, products, systems, and business models.

The circular economy model mimics the living model that we see in the natural world around us. Plants, organisms, and animals start their lifecycle at birth. They grow, die and eventually decay before being recycled by the natural world.

Running the economy like nature runs nature, means rethinking the source, design, objective, journey, life-cycle and re-purpose of the product or service. Principally its directive is lessening the usage of natural resources, energy, minimising pollution and operating in such a way that nothing goes to landfill.

But rather than adopting the cyclical approach that we see in the natural world, we have structured our lives in a linear way. Big industries create products from a finite amount of resources, and consumers take them and dispose of them when they break or are superseded by new models.

Famed designer William McDonough was a pioneer for a sustainable, circular flow of the economy. His circular economy and cradle-to-cradle ideas have gained traction in recent decades as mass production and consumerism push the planet’s resources past the point of no return.

Driven by design, he described a circular economy being based on three core principles:

Eliminate waste and pollution — Waste and pollution are considered as design flaws rather than inevitable by-products of things we make.

Circulate products and materials — Products like food or packaging should be kept in circulation, so they don’t end up in a landfill.

Regenerate nature — Enhance natural resources by returning nutrients to the soil and other systems to eliminate the concept of waste.

Circular Economy Examples

McDonough’s new, circular approach to production does not end with manufacturers. To succeed, everyone in society has to adopt circular economy principles. Manufacturers have to create products that can be returned and regenerated. In turn, consumers have to acclimate to a new system of ownership.

The circular economy model can succeed in lots of different ways. One of the ways that it can become possible is by licensing technologies. In this scenario, consumers do not own their technologies. Instead, they rent them from manufacturers. When a TV, washing machine, or fridge becomes defunct, consumers will return them to the manufacturer. To close the loop of the circular flow of the economy, manufacturers will disassemble their technologies and repurpose them.

Another way that businesses can create a cyclical societal structure is by promoting zero waste practices. In the UK, the food industry throws away 3.6 million tonnes of food every year. Globally, we are throwing away more than enough food to end food poverty. More often than not, food waste goes straight into landfill sites.

Scandinavian startup Too Good To Go is at the forefront of zero waste dining. What started as a sustainable seed of an idea planted in Copenhagen has since spread to over ten countries. The company has an app that allows restaurants, cafes, and even supermarkets to advertise their ‘waste’ food that would otherwise be thrown away. Local people can ‘rescue’ perfectly good food and stock their cupboards and fridges for a discounted price.

Another example is Olio (www.olioex.com), which connects neighbours with each other and with local businesses so surplus food can be shared, not thrown away.

In the fashion sector, circular business approaches that increase clothing utilization rates, such as resale and subscription models, help reduce the amount of water needed for production and decrease water pollution from the dyeing and treatment of new textiles.

Companies such s H&M are putting sustainability first in all materials used, their sourcing, recycling, design repurposing and rewarding their customer.

Some brands are using technological advances available such as threads that dissolve in a sustainable process, to allow items to be re-purposed. Rental and hire services rather than high-value purchasing are becoming more mainstream.

What Is Driving This Emerging Trend?

It is no surprise that William McDonough’s circular economy model has become more popular in recent years.

As it stands, the planet does not have enough resources to sustain our current consumption, particularly now that developing nations are growing greater appetites. Clearly, we need to radically shift our approach and it seems adopting circular economies is the way to do so.

The COVID-19 pandemic has been another driving force behind emerging circular economy principles, having shown the vulnerability of our supply chains and the constraints of mass-produced goods.

Recent events have also emphasised the need to lower and diversify our use of materials, rather than rely on single finite resources. The current petrol shortage, for example, is likely to prompt businesses to consider electrifying their vehicles or perhaps adopt hybrid versions. Likewise, what might be a long-term hike in energy prices may well encourage businesses to rethink how much power they consume.

Is a Circular Economy Here to Stay?

The Circular Economy is not a ‘fix’ for the current economical status. It is a totally new system, one that questions the way technical and biological materials are sourced, sets out to change and find solutions to what is currently an exhaustible 360-degree journey that has a beginning, a middle and not just an end but a follow through to a new beginning: to repeat that cycle to re-use, re-purpose, regenerate.

Creating a product, service and or business that sustains itself and the planet, serving both the consumer and producer more efficiently, more economically, is a huge part of the bigger picture puzzle in creating a sustainable future for all.

It is a new mindset, a new piece of the strategy to break the waste cycle — there is no waste bin large enough to stay with the current model, the Circular economy is the future.

André Brown has a twenty-five-year background in e-commerce and is the CEO of Advanced Commerce which provides a Merchandising platform (GrapheneHC) designed for Headless Commerce. You can connect to him on LinkedIn or email him at andre@advancedcommerce.io

André is the founder and CEO of Advance Commerce.