Beyond Fashion.....The high-stakes sustainability crisis in Home & Furniture returns and how AI can fix it.

The Home & Furniture boom...and its hidden operational burden

While fashion still dominates e-commerce, it’s the home and furniture category that has quietly become one of retail’s fastest-growing engines. According to McKinsey’s State of Fashion: Home & Lifestyle 2024, homeware, furniture, and décor grew nearly twice as fast as apparel online, driven by rising urbanization, hybrid working, and the “comfort-centric” consumer shift. Yet behind this boom lies a structural challenge most retailers underestimate. As Sarah Kent of Business of Fashion notes, “Home divisions are becoming retail’s fastest-growing category, but also the least optimized operationally, especially when it comes to returns.” Bulky items, complex materials, multi-component packaging, and variable product tolerances make returns vastly more expensive than typical apparel. And as online penetration increases, so does the exposure to logistical inefficiencies, sustainability pressures, and customer dissatisfaction.

The soaring cost of bulky returns and when logistics breaks the margin

Returning a pair of shoes may cost a retailer €12. Returning a sofa can cost €150–€500, according to internal estimates referenced in Vogue Business (2024). This single operational reality explains why return rates in furniture (though lower than fashion) are financially far more destructive. Heavy, oversized shipments often require specialized handling, multi-man pickup, re-packaging, storage, and (increasingly) repair or partial refurbishment. As Rachel Cernansky of Vogue Business writes, “Furniture returns have the highest cost-to-value ratio in e-commerce. Each single return can erase the margin of several successful sales.”Add to this trend the increasing shift toward online purchases for large items - 2025 data from Statista shows a 36% YoY rise in online furniture purchases across EU markets and retailers find themselves exposed to an entirely new cost structure. In the US, returns already cost retailers $743 billion annually (NRF 2024), and bulky home items account for the fastest growth within that number.

The sustainability blind spot ---> Why furniture returns are so carbon-heavy?

If apparel returns are bad for the planet, furniture returns are catastrophic.A single return journey for a table or armchair emits 8-12x more CO₂ than a clothing return (European Environment Agency, 2024). Add the carbon footprint of repackaging, reconditioning, restocking, or too often disposal, and the environmental impact becomes staggering. Despite growing regulatory pressure, nearly 50% of returned home goods still end up in landfills or incineration, according to a 2025 EU Ecolabel assessment.The EU’s new Extended Producer Responsibility (EPR) for textiles is expanding into homeware and household fabrics, and similarly, upcoming revisions to the Waste Framework Directive will place tighter controls on take-back, durability standards, and waste prevention for furniture. As found in the McKinsey report, “Bulky-category returns are structurally inefficient. The carbon footprint alone makes them a priority target for circular redesign.”

Fraud, Damage & Trust: The underestimated risk in homeware reverse logistics

Furniture returns are also disproportionately subject to fraudulent claims, mis-declared damage, or swapped items - losses that compounds already heavy costs. A 2023 study in the Journal of Retail & Consumer Logistics found that fraudulent oversized returns are 54% costlier and 2.3x more common than retailers report. As Prof. David R. King explains, “Fraud in oversized returns is significantly underreported, and the operational burden on carriers is growing faster than mitigation strategies.” Damaged-in-transit claims, customer-assembled errors, or minor defects can often be resolved locally, but brands lack visibility into actual product condition, or the logistical network required to route items efficiently to resale, repair, or donation channels. The result is unnecessary back-and-forth movement across borders, additional emissions, and preventable financial losses.

Designing circularity into the home category and what the market tells us

The circular shift is not a future vision - it is already happening. The EU is pushing for durability labeling, repairability scoring, digital product passports (DPPs), and right-to-repair requirements for household items. Meanwhile, luxury and mid-market homeware brands are experimenting with refurbishing, second-life resale, and local repair hubs. The homeware resale market is projected to grow at CAGR 15–19% through 2030, with platforms like Kaiyo, AptDeco, and IKEA’s resale programs proving that pre-owned furniture can be a high-margin, sustainable vertical. Even high-end interiors brands are joining the movement, driven by customer demand: according to Lyst & Vogue Business, Gen Z buyers are 40% more likely to buy refurbished home items compared to Gen X.Or, as Sarah Kent summarises, “Circularity is no longer an add-on feature in homeware , it is a strategic necessity.”

Where CIRQUEL Fits - AI -defect detection tech that reduces waste, carbon & cost in homeware returns while forecasting the best way of their repurposing

This is exactly where CIRQUEL brings measurable, transformative value. Our AI-powered anomaly detection, damage assessment, and quality forecasting allow homeware and furniture retailers to evaluate returns before they travel, preventing unnecessary shipments and identifying the optimal next path- resale, buyback, refurbishment, donation, or local re-commerce. We eliminate long-haul reverse logistics, reduce carbon emissions, and help brands recover value from items that would otherwise be written off. In practice, this means:

• fewer trucks on the road,

• fewer damaged goods re-entering long supply loops,

• fewer fraudulent claims,

• and a significantly improved brand and customer experience.

For the home category - where every centimetre of space, every kilogram of weight, and every return journey matters - CIRQUEL isn’t simply a cost-saving mechanism.It is the infrastructure the next era of sustainable home retail requires.