Recommerce - Transitioning to a Circular Economy
The world is consuming more than it can replenish and in order to meet global net zero goals by 2050 a significant shift is needed in the way we use natural resources. Our current economy is only 8.6% circular, leaving a massive Circularity Gap. We need to close the Gap by a further 8.4% to also close the Emissions Gap by 20321.
To accelerate the transition from a “take-make-waste” model to a circular economy, we need to rethink the way we shop and support small businesses to grow in new sustainable ways. Many of us are already making choices that can add up to a big impact on people and our planet, like selling items when we no longer need them, repairing devices, or renting appliances for a short time. We now have to enable businesses and individuals to more easily consider the small changes they can make towards Recommerce activities like Resell, Repair, Rental, Refill, Return and Redistribute.
Short for “reverse commerce”, Recommerce takes a circular approach to manufacturing and consumption, where products and materials are reintroduced back into the economy rather than dumped in landfills, ultimately helping to reduce waste and pollution.
According to research produced in cooperation with GlobeScan, consumers are already making progress – with half of those interviewed engaging in at least one Recommerce activity twice a year. Younger consumers, for example, are more likely to shop second-hand because it’s an affordable way to acquire higher-quality goods and it minimizes their environmental footprint.
However, some activities are more popular than others, and only one in five people are familiar with all aspects of Recommerce2.
Why Recommerce matters
Regenerative business models including Resale, Repair and Rental, have the potential to attract new customers, increase sales and lead to mass job creation – the Gulf Cooperation Council (GCC) alone has the potential to develop a $6bn market in recycling alone, creating some 50,000 jobs3. As individuals look to make more sustainable choices, businesses can offer them options that inspire changes to the way they shop and support reduction of their carbon footprint.
Moreover, as businesses of all shapes and sizes look to new and bigger markets, they want to capitalise on Recommerce as a way to attract new customers, reduce costs and increase sales, making it easier for customers to make sustainable choices while increasing brand affinity with buy-back and resale programs.
It’s time to rethink and rebalance
Action needs to be taken to inspire individuals to rethink the way they shop and consume, because, as the world’s climate changes, the way we shop has never mattered more. To help accelerate the transition toward a more regenerative and equitable circular economy, Visa has created a new digital Recommerce space to help individuals and businesses learn more about how to adopt the six R’s of Recommerce (Resale, Repair, Rental, Refill, Return and Redistribution).
Visa is developing a behavioral insights lab — an open-source experiment around sustainable behavior. Through working with clients and partners, the lab aims to uncover actionable ways to implement real-world solutions and empower individuals to adopt more sustainable behaviors. Given the fundamental role of payments in modern global economies and its history in enabling large-scale socio-economic progress through the digital payments revolution, we believe that the payments industry has the power to enable a positive shift towards more sustainable behaviours.
Learn more about Recommerce here.
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1The Circularity Gap Report, 2021
2Visa GlobeScan Research, 2022
3PwC, The $6 billion GCC recycling opportunity The $6 billion GCC recycling opportunity | Strategy& Middle East (pwc.com)