How Retailers can Create More Circular Supply Chains

Businesses are increasingly likely to see reputational damage as a result of failing to be accountable for their environmental impact. 

In retail, where 25% of greenhouse gas emissions (GHG) come from the supply chain, change must surely be a priority. 

From product design to inventory management, reverse logistics to re-commerce, there are numerous stages at which companies can improve the environmental impact of their supply chains. 

Here, Alex Cheesman, Global Industry Advisor for Supply Chain, Manufacturing and Logistics at Endava, considers the steps necessary for creating a circular supply chain. 

How is climate data pushing retailers to act on supply chain emissions?

In 2025, as public interest in sustainable processes continues to grow, consumers are increasingly seeking confirmation about how their products are made, with apps like Good on You giving them a quick overview of each retailers’ practices. This push for visibility is set to drive the growth of circular supply chains, with companies competing to be seen as a climate conscious alternative.

The organisations getting ahead in the sustainability race will be those guided by their own data, with unique insights enabling them to make decisions that align with customer expectations and increase business value.

Where in the supply chain do retailers often miss chances to cut emissions?

Retailers have often struggled with overproduction. In 2024, a briefing published by the European Environment Agency highlighted that 4-9% of textile products put up for sale in Europe end up destroyed prior to use, equating to between 264,000 and 594,000 tonnes per annum.

By optimising intelligent inventory management across the entire supply chain network, retailers can turn this around, cutting emissions produced by creating less products. For example, using AI-powered demand forecasting, they can analyse real-time customer data and consumer behaviour patterns, to more accurately predict the volume needed.

In turn, predictive analytics can be coupled with IoT software to identify patterns in product performance, sharing insights about when items should be put on sale or repurposed, limiting overproduction and driving a circular approach.

What’s the first step toward building a circular supply chain?

By laying the foundations correctly at the beginning, retailers can create truly circular supply chains that decrease waste and emissions. Through designing products that are easy to care for and can be disassembled for efficient reuse and remanufacturing, companies can ensure their supply chain practices feed into long term strategies.

Therefore, the first step should be taking a closer look into the data that drives every element of the supply chain. Do the current processes reflect the need for circular practices, or do the insights suggest this could be improved?

How can tech support re-commerce and circular practices in retail?

Incorporation of re-commerce is key to creating a circular supply chain. Through encouraging customers to send products back that can be re-sold or to list them on a marketplace that the retailer owns, shops can generate revenue growth at the same time as driving products to have multiple “life cycles”.

Here, technology will be pivotal. Digital tools that prioritise traceability and visibility will be crucial for driving consumer trust in re-commerce sales. 

How crucial is transparency in supply chain sustainability today?

It’s essential. Customers are actively searching for confirmation that their products are sustainable, from production to sale. Retailers that fail to drive visibility across their supply chains will be unable to compete with those demonstrating their awareness of climate impact.