MARKET TRADER, APRIL 12 - 25, 2019

RETAIL REPORTS 15 Retail returns are escalating... and so is waste

Despite reports questioning the overall stability of the retail industry, businesses are continuing to thrive, with e-commerce sales and fast fashion brands on the rise. The consequence of this growth, however, is that the volume of waste produced is escalating, most significantly from returns and excess stock that often end up in a landfill or destroyed due to retailers being unable to shift the products elsewhere. Growing competition in the industry to make

returns cheap and easy for consumers has resulted in an unprecedented number of items being sent back, says B-Stock, a leading auction platform for returned, excess and other liquidation inventory. Online shoppers typically

return around 30 percent of the goods that they buy (compared to 8 percent for in-store shoppers). Globally, the value of returned and excess inventory exceeds $1.2 trillion per year. In the UK, 300,000 tonnes of clothing are sent to landfill

every year – this includes garments that have never been worn or used. There is a pressing need to find a viable solution for retailers to quickly and easily alleviate this waste, in a way that will not further cut into their profits. “Returns and excess

stock contribute heavily to the amount of waste that retailers produce. With the environment facing the risks that it currently is, it is vital that we work together to change these outdated practices and instead utilise methods that will allow us to make a significant change,” said Ben Whitaker, B-Stock’s EMEA Director. “Supporting the circular

economy is so important for companies in the current retailing climate, especially where brand ethics and transparency are increasingly af fecting consumer’s purchasing decisions.” There are alternative

(Photo: United Nations)

solutions for retailers, such as marketplace platforms that allow retailers to sell their returned and excess stock to thousands of business buyers, as opposed to being sent straight to landfill. Whitaker added: “There are so many opportunities

now for retailers to shift stock in a way that is not only offsets loss, but more importantly, reduces the strain on the environment. Online auction platforms like the ones B-Stock

operates allow retailers to sell their unwanted stock for maximum value in a controlled dynamic.” By reworking traditional

methods and replacing them with a new viable

solution in the form of an online B2B liquidation marketplace, organisations have the potential to ethically repurpose and resell millions of items, and in turn alleviate wastage and landfill strain.

Online sales still growing

According to the Office for National Statistics, in the last decade the overall amount of money spent within retail has increased. In 2017 approximately £366bn was spent

in all retail excluding fuel, increasing by 4.3 percent when compared with around £350bn spent in 2016. Traditionally more money is spent within

stores than online, but online spending is growing at a faster rate than store sales, contributing positively to the overall increase in all retailing over the last decade. From 2014, store sales have remained relatively flat. In 2017 online sales increased by 15.9 percent from the previous year, an increase of £8.2bn from £51.6 to £59.8bn. This is in comparison with an annual increase of 2.4 percent within stores, increasing by just over £7bn from £299bn in 2016 to £306bn in 2017. Whilst the amount spent within stores displays moderate growth since 2008, in contrast, online sales show a sharper rate of growth, increasing six-fold since 2008 and contributing to the growth in overall retail sales. Online sales have shown a steady increase

since 2008, but have really set off in the last three years, as online spending increased at a faster rate from 2015. This has coincided with a slight slowdown in store spending, which shows the beginning of a shift in consumer behaviour to spending more online. As a proportion of all retailing, money

spent online has increased from an average of 4.9 percent in 2008 to an average of 16.3 percent in 2017. This means that nearly one-sixth of every British pound was spent online in 2017. When we take a closer look at sales within

each of the retail sectors, we can see that in 2017 the majority of money was spent within stores, with the exclusion of the non-store retailing sector.

Non-store retailing is otherwise known as

those stores that do not have a permanent “bricks and mortar” presence and mainly consist of online-only sellers. Therefore, the “store” sales in the non-store sector relate to sales that are not done online, such as markets or temporary one-off trading such as auctions. All other sectors are stores that have a store presence and may trade online.



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