One of the questions we often get asked when we talk about circular retail is ‘what happens to the product’?
But what’s really being asked is ‘do retailers really have the capabilities to manage preowned product themselves’.
The answer is often no – BUT that doesn’t mean they can’t own and operate circular retail models directly; it just means they need someone else to help support on that part of the process – which isn’t as problematic (or as costly) as it might seem.
Three Paths for Retailers to Manage Circular Programs
What we see is that there are generally 3 ‘avenues’ for retailers to operate these programmes, whilst retaining ownership of the customer experience and relationship from start to finish:
1. They already have processing, cleaning, repair capabilities in-house – either because they own their warehouse operations and already run these services for customer returns or sample sale/damaged product, or because they’re already running these programmes manually but just need tech to help them automate and scale.
2. They are already working with partners who can do this part of the process for them. Many work with 3PLs that already do a level of refurbishment and repair for their ecommerce returns and can extend that operation to process and manage preowned items.
3. They need to find a partner that can help them with this part of the programme – and there are lots of companies out there today that offer this type of service.
Case Studies
Take, for example, the recent launch of repairs at John Lewis – who have partnered with Timpsons to offer repairs services in John Lewis stores. Because John Lewis don’t have the specialist experience to physically manage the product themselves, they’re partnering with someone that can. BUT – as it’s being run as a John Lewis in-store programme, the brand directly benefits from that deeper customer engagement and relationship, as well as the rich customer and product data that these programmes can generate (for example, the type of services customers look for, type of garments most repaired and the demographics of customers seeking the repair service).
Another example is Swedish childrenswear brand Polarn O.Pyret, who partnered with their existing 3PL – GXO Logistics – to deliver their (multiple award-winning!) trade-in and resale programme. GXO were already doing some light refurbishment and repairs for PO.P customers alongside their usual eCommerce fulfilment – but worked together with PO.P to build out those capabilities to fully support the processing, refurbishment and resale fulfilment for the programme – using Tern Eco tech to support the end-to-end solution of course. (#AD!!!)
The Key for Retailers: Owning the Circular Experience
The most critical thing for retailers is ownership of the programme – owning the customer journey, the brand equity, the pricing, the customer AND the revenue opportunity.
This is a new way of doing retail, but there are so many great services out there today that can help – you just need to know where to look.
You also don’t have to offer these services for your entire catalogue, or to your entire customer base, you can start small and learn as you grow – but that’s a post for another day!
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