Retail Circularity: An Action Guide for Retailers

RetailCircularity:AnActionGuideForRetailers CENTERFORRETAILSUSTAINABILITY Copyright©2024DeloitteDevelopmentLLC.Allrightsreserved. Introduction|RetailCircularity:AnActionGuideForRetailers Thisactionguideisdevelopedforretailexecutivesandteamsacrosssegmentsastheyexploreandimplementcircularbusinessmodels.Thisresourceispreparedasatooltohighlightcircularretailopportunities,establishavalueframeworkforarticulatingthebusinessopportunity,andidentifythecriticalcapabilitiesneededforsuccess–illustratedbycasestudiesinpracticeacrosstheindustry. WHATTHISIS…WHATTHISISNOT… Anintroductiontocircularityacrosstheretailindustry Avalueframeworktoserveasatoolwhendevelopingbusinesscases Fundamentalsonprioritizedmodels,includingresale,repair,andrecycle Asampleofillustrativecasestudiestoshowcaseleadingpracticesacrosstheindustry Apragmaticguideforoperationalteams,applicabletoretailersacrosssegmentsandcompanysizes Anexhaustive,step-by-stepplaybookfordesigningandimplementingcircularbusinessmodels Acomprehensiveguideforallcircularityopportunities,includingproductdesign,packaging,wasteoptimization,etc. Atailoredroadmapforanindividualretailer Adetailedbusinesscaseforcircularityinretail Copyright©2024DeloitteDevelopmentLLC.Allrightsreserved. AboutUs&Acknowledgements NRF&DELOITTETHENRFCENTERFORRETAILSUSTAINABILITY Tohelpadvancethecirculareconomy,DeloitteandNRFareworkingtogethertodriveasystemofcircularityacrosstheretailsector.Throughengagingwithretailersandothersustainabilitystakeholders,weaimtoprovideinsightsacrosskeyissues. “ BybringingtogetherDeloitte’scapabilitiesandexperience,withNRF’sexperienceactingasanadvocateforpeople,brands,andideasoftheretailsector,thetwoorganizationsarewell-positionedtohelpdrivepositiveoutcomesinmovingtheindustryforward. “ Withdeepexperienceintheretailsector,retailsupplychainsandsustainability,Deloittecanhelpdrivepositiveoutcomesinsupportingourindustrymoveforward. -Deloitte&ToucheLLPSustainabilityPartnerJamesCascone TheNRFCenterforRetailSustainabilitysupportsretailereffortstocreateeconomicvaluewhilegeneratingenvironmental,social,andcommunitybenefits. LaunchedinDecember2023,theCenter’sinitialfocusareasincludeimprovingtraceabilityinretailindustrysupplychains,growingthecirculareconomy,andleveragingcustomerinsightsonsustainabilitypractices. “ “ TheNRFCenterforRetailSustainabilitywillaugmentindustrysustainabilityeffortsandresourcesacrosstheretailsector,centralizingengagementacrossthefullretailvaluechain. -NRFPresidentandCEOMatthewShay ADDITIONALACKNOWLEDGEMENTS Wewouldliketothankthemanyretailers,andindividualsthatrepresentedthem,forsharingtheirtimewithus–theirinsightfulresponsesandindustryperspectivesgroundedthedevelopmentofthisactionguide.Theconversationsprovidedimportantcontextintothechallengesthatretailcompaniesfaceintheircircularityefforts,andtheyallowedustoaddressthecurrentlandscapewithinformedmodelsandtargetednextsteps. Copyright©2024DeloitteDevelopmentLLC.Allrightsreserved. StakeholderEngagement Thisactionguiderecommendsstepstoadvancecircularityeffortsandaddressthehurdlesassociatedwithimplementingcircularbusinessmodels.ThisresourcewillprovidepracticalsuggestionstomovefromtheorytoactionbasedonacircularityworkshopatNRF2024:Retail’sBigShow,atargetedsurveytoretailers,andfollow-upconsultationmeetingswithselectcompanies. 3 4 OURPROCESS 37% 4% 1 LaunchedtheNRFCenterforRetailSustainabilityandfacilitatedacircularityworkshopwithretailersatNRF2024:Retail’sBigShow NRFshareda13-questioncircularitysurveytobeginretailmobilizationand 2 data-collectionefforts Analyzedresponsesandcapturedkeytakeawaysbyindustryandcompanysize Heldone-on-oneconversationswith16retailerstohelpshapetheroadmapandsocializeitsdevelopment SURVEYBREAKDOWN Individual Fashion&Apparel Home&Garden INTERVIEWEDSTAKEHOLDERS DesignerStores 4 BigBoxStores 3 ResaleOrganizations 3 Specialty/DiscountStores 3 DepartmentStore 1 NGOs 2 Copyright©2024DeloitteDevelopmentLLC.Allrightsreserved. 100 83 54% surveyresponses 18% Food&Beverages 3% Entertainment 17% MassRetailers 2% Logistics 7% Electronics 1% Toys&Games 5% Health&Beauty 1% Books&Stationary 4% Sports&Outdoors 1% Other UniqueCompanyResponses Ofrespondentswerefrom“Fashion&Apparel”or“MassRetailers” CHAPTER1 IntroductiontoCircularityinRetail Copyright©2024DeloitteDevelopmentLLC.Allrightsreserved. Today,only7.2%ofallmaterialinputsintotheglobaleconomyarecycledbackaftertheendoftheirusefullife–however,thelandscapeisshifting1 KEYMARKETSIGNALS Customerpreferencesareshiftingtowardresellandreuseofproducts,especiallyamongmillennials&GenZ. •30%ofallcustomerscheckwhetheraproductismadefromrecycledmaterialorisbiodegradablebeforemakingapurchase1 •Peoplewhohaveexperiencedextremeweatherare1.4xmorelikelytobuysustainably(53%purchasedasustainablegoodinthepastyear,comparedwith38%ofthosewhodidnotexperienceaclimateevent)1 •82%ofGenZcustomerssaidtheyconsidertheresalevalueofpurchasesbeforebuying3 •GenZandmillennialwomeninparticularshopsustainably–81%choosesustainableproductswhenavailable1 Regulationsaroundcircularityareincreasing,part