The retail industry is evolving towards a circular economy, a transformative approach championed by the Ellen MacArthur Foundation that aims to eliminate waste and pollution, regenerate nature, and maintain the circulation of products and materials at their highest value. This model emphasizes the reuse, repair, repurposing, and reselling of products, as well as recycling them into their base components when they reach the end of their usefulness. It also involves the redesign of products for increased durability, using recycled and eco-friendly materials that can be easily recycled or composted.

The development of the circular economy is reminiscent of the early internet and e-commerce era, with foundational tools and business models currently under construction. These developments are the subject of high-level discussions at exclusive events like the NRF Circularity Workshop and the Reverse Logistics Association events, as well as Ikea’s “One Home, One Planet” initiative. Retailers are actively crafting their contributions to this sustainable economic system.

In the U.S, the most recognized aspects of the circular economy are the resale and recycling of products. However, the concept extends to other practices such as product redesign for longevity, the promotion of sustainable goods, the provision of repair and refurbishing services, the adoption of refillable and reusable packaging, and the shift towards renting rather than outright selling products. These efforts collectively contribute to a more sustainable and environmentally responsible retail sector.