The Fourth Industrial Revolution - AI and the circular economy in retail

By Martin Fawcett, agency services director at 100% Group

Global demand for more sustainable practices has led to a significant shift in the way we approach and consider resource consumption, production, and waste management. At the same time, a new era defined by rapid technological advancements is on the horizon thanks to the continuing evolution of AI (Artificial Intelligence), and its true impact is yet to come. These emerging trends are driving retail industry leaders to examine how such technology can be implemented to increase the transition towards a fully circular economy.

Revolutionising sustainability for the modern world

As environmental concerns increase following the reported 2.12 billion tons of wastewe generate each year and the subsequent damage it has on upon the planet (such as climate change and pollution), implementing a circular economy has never been so important. In comparison to the traditional linear economy, which follows the ‘take, make, dispose’ model, the circular economy aims to close the loop by promoting the continual use, recycling, and repurposing of materials and products; minimising waste and making the best use of finite resources.

The opportunity for businesses to transition to a circular economy has never been more accessible, thanks to innovative and evolving technologies such as AI. Ushering in the ‘Fourth Industrial Revolution’, AI can be a highly powerful and influential tool due to its various capabilities including machine learning, pattern recognition, decision supporting and adaptability. Here are several ways in which AI can support your retail business become completely circular.

Assisting in creating circular designs

In a circular economy, products are designed with end-of-life considerations in mind, meaning they must be recyclable, reusable, and made with sustainable products. So, when a product reaches its ‘end-of-life’, a new purpose can be found for it instead of it being discarded as waste. When it comes to crafting products tailored for a circular economy, designers can utilise AI for a faster and more efficient design process. By analysing data on materials, manufacturing processes, and environmental impact, AI can recommend adjustments to a product’s design that align with circular economy principles. Human designers can then review, refine, and approve these adjustments based on generated data.

For example, imagine designing and building a smartphone, AI can help take every aspect into consideration. Designing a smartphone with easily replaceable and upgradeable parts means users can replace specific components, such as the battery or screen without needing to discard the entire device, extending its lifespan and reducing unnecessary waste.

Optimising the supply chain

In a traditional linear economy, retail is known for creating an unsustainable amount of waste through the supply chain, especially in returned inventory. According to a reportby the British Fashion Council, 50% of returns are sent to landfill, 25% to incineration, and only 25% are recycled. Therefore, minimising waste and ensuring that products are repurposed or recycled effectively is an essential step towards achieving a truly circular economy. To reduce the number of returns being sent to landfill, AI algorithms can analyse customer preferences and purchase history to provide personalised product recommendations. By suggesting items better aligned with consumer’s tastes, retailers can increase customer satisfaction and decrease the chances of returns. Not only that, but AI can also analyse customer feedback, such as return reasons to identify trends and areas for improvement. Retailers can use this information to make data-driven decisions, enhancing product quality and customer satisfaction.

Managing the product lifecycle

AI can support in monitoring the entire lifecycle of products, from their design and creation to usage and disposal. By tracking the condition and performance of products, retailers can make informed decisions about refurbishment, repair, or recycling, extending the life of products and reducing waste. When it comes time to sorting waste products, AI is being used to improve performance and efficiency. ZenRobotics, a company that uses AI to automate waste sorting, works with cameras and sensors, whose imagery input allows AI to control intelligent waste sorting robots. These robots can reach an accuracy level of 98% in sorting a myriad of material streams, from plastic packaging to construction waste. This increases the value that can be generated from material streams through improved recovery rates and overall quality of outputs.

Upholding a more sustainable future

While AI has made tremendous advancements within the past year and can support businesses in achieving their goals, the technology is still in its early stages of development. For the foreseeable future AI must still be overseen by humans and guided by our principles and values to ensure privacy, security, and efficiency in the drive to a fully circular economy.

Sources:

https://archive.ellenmacarthurfoundation.org/explore/artificial-intelligence-and-the-circular-economy#:~:text=Designers%20working%20with%20AI%20can,initial%20designs%20or%20design%20adjustments.