FROM THE INDUSTRY
while recovering value.
The circular economy replaces the traditional “take-make-dispose” approach with systems that keep products and materials in use as long as possible and are recycled properly. Its core principles are to design out waste, preserve material value and regenerate natural systems through reuse, repair, refurbishment, remanufacture and recycling. Returns have transformed from cost centres to strategic value recovery points. Advanced circular logistics uses AI-driven grading, automation and digital product passports to assess condition, trace origins as well as redirect products into secondary markets.
or poor fit, and valuable ones that enable trade-in and product-as-a- service programmes. Resale turns
Digital platforms are increasingly integrating these functions into unified ecosystems that manage the entire product lifecycle. By connecting supply chain, finance and ESG systems with compliance tools like digital product passports, these platforms enable organisations to manage assets across multiple use cycles. Together, optimised returns, expanded resale and sustainable liquidation demonstrate how circular logistics transforms reverse operations into revenue generators that strengthen customer loyalty, while advancing both environmental and competitive objectives.
recovered goods into valuable secondary transactions, creating a large global market across electronics, apparel and consumer goods valued at hundreds of billions annually. Specialised platforms facilitate authenticated resale through AI grading, repair tracking and certified refurbishment, maintaining trust while generating margin and supporting sustainability goals. Liquidation, once seen as a sign of business failure, now represents the final phase of circular value capture. Instead of destroying surplus inventory, companies use predictive analytics and AI pricing to move goods through discount or export channels proactively, minimising waste
Retailers can now distinguish between avoidable returns, such as mis-shipments
Reverse Logistics: The Engine Driving the Circular Supply Chain By Rich Bulger
and prepared for resale, reuse or responsible recycling. This convergence of operational precision, data intelligence and sustainability performance defines a new discipline: Circular Logistics. Circular Logistics operates under a simple but powerful principle - a product’s life does not end with its first customer. Instead, value exists in the transition from Customer 1 to Customer 2, and potentially beyond. When managed intentionally, a product can move through a continuous Product Lifecycle Loop - forward to its first point of use, back through reverse operations and forward again into secondary or tertiary markets. Each circulation builds new revenue potential while reducing environmental impact. The numbers validate the urgency. Online return rates average 17.3 %, double that of in-store purchases, while the U.S. secondary market already exceeds $800 billion and continues to grow. Combined, these trends create a $1.6 trillion opportunity for organisations that can master reverse operations, automate grading and disposition and integrate AI-driven visibility across the product lifecycle. Over the next 6–12 months, innovation will accelerate in three areas: n Automation & AI - intelligent grading, root-cause analytics, and dynamic resale pricing. n Lifecycle Visibility - end-to-end tracking of assets, materials and carbon impact powered by digital product passports that verify origin, condition and reuse history. n Circular Sales Integration - leveraging residual value to sell more new products while identifying new ways to grow install bases through trade-in and reuse programs. And as Vic will explore next, the logistics network itself becomes the starting point for building the infrastructure that powers the entire circular economy.
In 1874, Aaron Montgomery Ward offered one of the first 100% return guarantees in his mail-order catalogue - a revolutionary promise that built trust with rural customers in the
US buying products sight unseen. Since then, returns have been viewed as a necessary evil - a cost of doing business that retailers sought to minimise. The prevailing belief was simple: all returns are bad. The goal was to reduce, prevent and avoid them entirely. But as shopping behaviour shifted from bricks-and-mortar to online, app-based and omnichannel models, the volume and complexity of returns grew exponentially. In 2024, according to the National Retail Federation, U.S. retailers processed $890 billion in returned goods - nearly 17% of all retail sales. That total now rivals the GDP of most nations, illustrating how returns have become a defining element of modern commerce. This rapid rise has forced companies to rethink their approach. Rather than simply managing unwanted returns, leading retailers are learning to differentiate between return streams that should be compelled down and those that can be compelled up. Returns caused by buyer’s remorse, defective products or just overstock tend to drain profitability and must be minimised through better forecasting, product data and customer experience design. However, returns from trade-in, lease, product-as-a-service and early-upgrade programmes are now considered opportunities to capture residual value, recirculate products and strengthen customer relationships. In this new model, Reverse Logistics evolves from a cost centre to a profit enabler. The ability to efficiently receive, test, grade and reallocate products has become a competitive weapon. Every product that comes back must be matched to the correct originating entity, assessed for cosmetic and functional condition,
Volume 47 No.4 DECEMBER 2025
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