The Circular Economy: Put Your Purpose Into Focus

As NRF 2021 Chapter 1 just wrapped, it’s no surprise that the biggest focal point for retailers is transforming at an accelerated pace to keep up with the demands and challenges brought on by COVID-19. Key areas of focus included the usual suspects: transforming business models, managing new costs, delivering a delightful customer experience, and finding a company’s purpose. While none of these themes are new, the pandemic has provided a new lens in which to view them.

A passion for purpose

Retailers realize that a company’s purpose is important to both customers and employees alike. The conscious consumer movement puts an emphasis on a brand’s stance on key issues. In fact, a global poll conducted in 2018 showed that nearly two-thirds of consumers would decide to either buy or boycott a brand based solely on its position on a social or political issue.

What purpose does a purpose serve?

Simply put, purpose explains why your brand exists. The purpose is an articulation of the positive impact the brand has on peoples’ lives, society, and the environment. And make no mistake, the demand from customers for purpose cannot be understated.

The circular economy approach

While some companies are embracing environmental, social, and governance (ESG) issues, others are welcoming a circular economy approach. H&M, for example, is showcasing its support of Garment-to-Garment initiatives seeking to develop a viable garment recycling industry. Meanwhile, IKEA is highlighting its efforts to consider the full life-cycle of their products and services. Many UK and European retailers are focusing on both their sustainability and circular economy initiatives.

Getting started

With consumer expectations of sustainability and new legislation worldwide, retailers globally are being pushed to become more environmentally friendly. This means they need to consider the avenues in place to reduce overstock inventory sustainably. The problem is, overstocked warehouses are not conducive for profits, and the landfill is not an option for reputation. So how can retailers sustainably clear excess inventory and protect brand equity—all while minimizing financial loss? If done right, a B2B private, online auction marketplace can be a viable sales channel.

The B-Stock solution

Top UK and European retailers are currently using branded, online auction B2B marketplaces to sell their excess and returned inventory. These marketplaces are customized, integrated, and scaled based on the retailer’s unique needs—think of it like your own storefront to sell returned, excess, or other b-stock inventory. They also allow total control over who is buying the inventory and how it enters the secondary market. B-Stock is helping many brands enhance their circular economy and secondary market initiatives.

Here’s how and why it works:

Higher Pricing

By applying the right strategies, a B2B offset substantial loss for returned or excess inventory, even comparable to reprocessing back on shelf or returning to vendor. By setting up an online auction dynamic where specifically targeted buyers compete to buy your merchandise, pricing goes up.

Channel Control

Exposure to the right buyers ensures there is no confusion between primary (a-stock) or secondary (b-stock) channels and that your brand remains secure. Marketing to a database of targeted, vetted secondary market buyers allows you to control who sees your merchandise and who is allowed to buy it.

Velocity

With a larger buyer base made up of the right buyers, you can move inventory as needed—regardless of volume, time of year, or product category.

Automation/Efficiency

By automating your stock clearance process, you’ll improve the operational efficiency of your liquidation program. No more spreadsheets, faxing, and no more negotiating over the phone.

Online Auction Dynamic

Increased competition through auctions means higher pricing; it also drives velocity, creates a sense of urgency and excitement. Auctions also mean no offline negotiating: you’ll be able to extract buyers’ highest willingness to pay and have real data on secondary market prices.

Sustainability

Bypass stock waste costs. A robust buyer base exists for just about every product regardless of condition, style, or brand. From salvage and discount store owners to online sellers to mom-and-pop shops, refurbishers and exporters, you’ll have direct access to a large buyer pool.

We’re here to help navigate the new reality of retail. To learn how you can embrace the circular economy while offsetting loss, request a demo.

To learn more about B-Stock Solutions contacts Giorgio Vitale, Head of Business Development EMEA at [email protected]