The beauty industry, while focused on enhancing beauty, faces a significant challenge: waste. A substantial portion of cosmetic products, up to 40%, are destroyed, representing a loss of resources and revenue. To address this issue, Arkive has developed a system to categorize the specific reasons why these products reach their end-of-life (EOL), which we call "Arkived Because" reasons. Understanding these reasons is crucial for developing effective waste reduction and repurposing strategies.
Defining End-of-Life (EOL)
End-of-life (EOL) in the context of cosmetic products refers to the stage when these products are no longer sellable or usable by consumers. However, EOL is not limited to what happens after a consumer is done with a product. It encompasses all materials, ingredients, and products within the cosmetic supply chain.
The cosmetic supply chain consists of producers (e.g., L'Oréal Group) who sells via: own stores vs partner outlets (e.g. Sephora, Influencers), digital vs offline (store vs webshop), and B2B (e.g., hotels, hair salons, pharmacies) or B2C (Ici Paris XL).
The lifecycle of cosmetic products involves sourcing, warehousing, distributing, selling, managing returns, and reaching their end-of-life (EOL). EOL can occur at all of these stages, including:
- Scale of economies.
- Products damaged in warehousing or transport.
- Excess inventory due to inaccurate demand forecasting.
- Products becoming obsolete due to changing trends or packaging updates.
Common 'Arkived Because' Reasons
There are several common reasons why cosmetic products reach their EOL and become "Arkived":
1. Oversupply/Excess Inventory
- Inaccurate planning and forecasting lead to unsold inventory.
- It is sometimes perceived as more cost-effective to overproduce than to optimize inventory management.
- These excess products end up as outlet items, are traded, or are destroyed.
2. Discontinued
- Product reformulations or packaging improvements lead to product recalls.
- Recalled products are often destroyed to protect the sale of new products and maintain higher pricing.
3. In-store Production/Touched-the-Shelf
- Retailers require full and visually appealing shelves, which can lead to overstocking.
- Stores are emptied and restocked frequently (e.g., 6x a year), resulting in unsold items.
- Products that have been handled or "touched-the-shelf" may be considered unsellable.
- This contributes to a significant volume of annual product waste.
4. Limited Edition/Limited Collections
Products designed for temporary collaborations or seasonal promotions.
5. Test Batches/Trial Errors
Products produced during testing phases or due to formulation errors.
6. Damage
Products can be damaged during shipping, handling, or in-store display, rendering them unsellable.
7. Changing Trends/Seasonality
Shifting consumer preferences and seasonal trends can cause products to become obsolete quickly.
8. Packaging Issues
Defects or flaws in packaging can make products unsellable, even if the product itself is otherwise fine.
9. Expiration Dates
Cosmetic products have expiration dates, and unsold products may become unusable or unsafe for consumers.
10. Returns
Customer returns contribute significantly to waste, with returned products often being discarded regardless of condition.
The Impact of Each Reason
Each "Arkived Because" reason has financial and environmental consequences. Up to 40% of all cosmetics are destroyed, leading to substantial financial losses and wasted resources.
Arkive's Solutions for Each Reason
Arkive's platform is designed to address these EOL challenges by providing tools for inventory optimization, reverse logistics management, and connecting businesses with EOL partners for repurposing.
Conclusion
Understanding why cosmetic products reach their end is the first step towards a more sustainable and profitable beauty industry. Arkive provides solutions to identify "Arkived Because" reasons and minimize their impact.