The role of circular marketplaces: Reimagining the shopping cart for sustainability

In an era where consumers are in charge, brands are being asked to reimagine their ecommerce strategy to align with behaviors, values, and more. This means the future of ecommerce is not just about selling, but also about making every transaction count for the planet. This intersection of commerce with sustainability highlights a transformative shift toward circular marketplaces, a term and concept buzzing across retail, manufacturing, and beyond.

As economic challenges intensify and the need for waste reduction becomes more urgent, the concept of a circular marketplace has emerged as a promising solution. At its core, a circular marketplace is an online platform that connects buyers and sellers of used, refurbished, recycled, or remanufactured goods. The primary goal is to extend the lifecycle of products, preventing them from becoming waste.

For businesses, particularly large companies, these marketplaces offer a valuable opportunity to reduce their environmental footprint while boosting customer loyalty. By offering consumers a chance to earn money or credit for products they no longer need, companies can keep customers engaged and committed to more sustainable practices.

Today customers, boards, and stakeholders are all holding brands to supporting sustainability practices in different ways. Circular marketplaces enable brands to prioritize climate change improvement and contribute to a healthier global economy.

Additionally, many businesses see the revenue potential of these types of marketplaces. According to ThredUp’s 2024 Resale Report, the US secondhand apparel market is projected to reach $73 billion by 2028, growing at an impressive average annual rate of 11%. Notably, around 63% of consumers who shop secondhand do so online.

As companies increasingly focus on reducing their carbon footprint, this trend highlights a significant opportunity for businesses to tap into circular marketplaces in the coming years. With sustainability becoming a central focus for both consumers and companies, the momentum behind circular marketplaces is only expected to grow.

By now, the advantages of circular marketplaces should be well understood, but it's essential to consider these from both a consumer and business perspective.

For consumers, circular marketplaces offer compelling financial incentives. By selling back items for money or store credit, consumers can alleviate some of the costs associated with purchasing new products. This not only promotes sustainability but also encourages a more thoughtful approach to consumption. The ability to earn from items you no longer need supports a greener lifestyle while easing financial pressures.

For brands, the potential benefits are extensive. Establishing a circular marketplace can significantly reduce a company's carbon footprint and build stronger customer loyalty. As consumption levels continue to rise, encouraging consumers to return items for reuse or resale is increasingly important. This approach not only supports environmental sustainability but also opens up new revenue streams, drives customer loyalty, and enhances a brand’s image in a market that values eco-conscious practices.

Here are some key benefits for businesses:

• Revenue from resale: Businesses can capture a share of revenue from reselling items.
• Tax advantages: Companies can benefit from potential tax deductions by donating returned items to non-profit organizations, a benefit that may not be available if consumers donate directly.
• Increased sales through merchandise credit: Offering store credit instead of cash payments can drive additional sales. According to Trove, businesses issuing gift cards see a 50%+ increase in total spending beyond the card’s face value, with 31% of these cards being redeemed on the same day.
• Acquiring new customers: Trove data also shows that 50-65% of resale customers are new to the brand, providing an opportunity to expand the customer base and attract fresh interest.

While clothing retailers might be the first to come to mind when thinking about circular marketplaces, recycling, and waste reduction, as well as remanufacturing programs are just as critical for larger companies across various industries.

• Manufacturing: Caterpillar, the world’s leading manufacturer of construction and mining equipment, prioritizes customer success with innovative products and services. For Cat, remanufacturing is an ideal solution, enabling customers to buy like-new parts at a fraction of the cost while keeping resources in circulation. This approach lowers total owning and operating costs, making new machines and engines more attractive. Within the first six months of their program, the facility improved by nearly a quarter-million pounds of remanufactured material—equivalent to the weight of a Cat® 797 mining truck.
• Retail: Many consumer brands are getting used to the concept of circular marketplaces through buyback programs now being offered by retailers, including Lululemon like new, Patagonia Worn Wear, and Carhart Reworked, where customers can trade in their used items for store credit or cash.
• Automotive: BMW will reduce their carbon footprint by 25% by incorporating recycled fishing nets into the production of headliners and floor mats for several of their models. This highlights the vast potential for automotive companies to integrate recycled materials into their processes, significantly reducing waste and lowering their environmental impact.
• Electronics: The electronics industry is another area where circular marketplaces hold immense potential. Consumers constantly seek the latest technology but often don’t know what to do with their old devices. In response, Best Buy has introduced a trade-in model, allowing customers to bring in their old electronics in exchange for credit toward new purchases. Due to Best Buy’s circular economy, every year they repair about 1.7 million devices and since 2009 has collected 2.7 billion pounds of electronics and appliances for recycling.” This not only keeps customers coming back but also helps reduce electronic waste.
• Travel and hospitality: Even platforms like Airbnb embody a form of the circular economy. By connecting people who want to rent out their homes with those seeking accommodations, Airbnb exemplifies the sharing economy on a global scale, further illustrating how circular marketplaces can operate beyond just physical goods.

Circular marketplaces are not just a trend—they are the future of sustainable business. As both consumers and companies become more aware of their environmental impact, the demand for circular solutions will continue to grow. Whether through buyback programs, trade-in models, remanufacturing, or the sharing economy, circular marketplaces offer a pathway to a more sustainable, profitable, and eco-friendly future.

Sitecore OrderCloud enables brands to reimagine the shopping cart, powering creative commerce solutions like circular marketplaces. Explore more about Sitecore OrderCloud here.