Take the case of automobiles. A car can be a limited edition, budget-friendly, and can find its way to the second-hand and vintage market. Its components can also find utility in their second and third lives. But how much percentage of the original price will you get if you buy a car from a showroom and try to sell it the same day? In terms of material, functionality, aesthetics, etc., the car remains, say, 99% the same as when it was sold via a showroom, but its perceived value depreciates manifold in a matter of a few hours, days, and a month after its showroom sale (5 to 30%).
To make this idea appear more legitimate, there are evaluators, insurance agencies, business literature, and marketing gurus who will make you believe that the car’s tangible value has depreciated significantly and that it must find its way to the second-hand market. A day-old car and a 5 year-old car both belong to the second-hand market and remain at the mercy of speculators. The car is just one example, but there is a missing formal market for products that are virtually and technically as good as new. Consequently, products experience a sudden drop in perceived value as soon as they change hands, prompting borderline consumers to opt for a new one instead, hence adding more burden to resources and the environment.
The case of supermarkets and fulfillment centers is no different. Consumers, in search of value for money, righteously want products exactly as displayed and promised in advertisements. The result? A minor dent on packaging or product, and the product goes to the waste bin. We are talking about millions of such products going to waste bins daily. FMCG and F&B products of varying value, shelf life, and embodied energy, whether edible or otherwise, face cosmetic rejection and end up in waste bins and landfills because there is a missing formal market, mechanism, and buyers for such products.
The solution is not very difficult. The first point of sale, i.e., brands, delivery agencies, supermarkets, fulfillment centers, etc. should come to an arrangement with potential and latent consumers based on self-disclosure about the extent of cosmetic damage, backed by legitimate valuation in depreciation, to sell such products through a dedicated section of their existing sales channels, websites, apps, and stores. This will only enhance the sustainability quotient and brand value of businesses, allow consumers to get a fair deal and make sustainable decisions, and result in lesser wastage, a lower environmental footprint, and reduced resource consumption.
Author: Anoop Jha
Founder, Urban Tenets
Netherlands
https://urbantenets.nl/
CircularEconomy
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