The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
The circular economy is one of eight trends which we see combining to create The New Consumerism. The New Consumerism sees today’s consumers assessing their priorities and increasingly asking themselves what they truly value: Why own something that I only use sporadically? Why accumulate more belongings when I could be out experiencing life? Why pay for space I do not use?
The circular economy is one where everything is re-used and nothing is wasted. It is the antithesis of the linear “build, buy, bury” model of a one-way stream of raw material to factory, to user, then landfill. The circular economy has the potential to completely transform the way in which businesses operate, and resource-intensive industries, including fashion, are at the heart of the debate.
As highlighted in Euromonitor International’s latest global briefing: Fashion Industry and The New Consumerism, the throwaway culture is gradually becoming obsolete, and the concept of the circular economy promises a way out, prompting fashion companies to think how re-using, recycling and repairing can become relevant to their businesses.
Many fashion businesses are choosing to incorporate recycled fibres, fabrics or clothes into their collections, but some have taken further steps to encourage more thoughtful consumption and promote recycling and re-use in apparel. For example, Patagonia’s The Worn Wear initiative supports the repair and extension of the product life of existing garments. The company has teamed up with eBay to create a network of people re-selling used Patagonia clothes. It has also invested in Yerdle, a start-up US company enabling the exchange and recycling of used goods.
Other companies, including Levi Strauss & Co and H&M, have also made it easier for consumers to recycle clothing and footwear, in order to reduce the volume of waste sent to landfill. In April 2016, H&M heavily promoted World Recycle Week, with a major project intended to collect 1,000 tonnes of used clothes. Voucher schemes, where consumers hand in their unwanted clothing in exchange for discount vouchers off new purchases, have also proved to be one of the most effective ways to encourage textile recycling.
The circular economy has also inspired a new breed of start-ups in second hand clothing. From theuser’s perspective, the major drawback of the largest re-sale sites, including eBay, is that sellers are personally responsible for photographing, posting and shipping products, which can be time-consuming. Concepts such as The RealReal, Poshmark and Tradesy make the process of selling pre-owned clothes much easier, thus encouraging consumers to make money by selling their unused clothing.
To a large extent, re-sell businesses focus mostly on designer clothing. Two companies that operated across all price points – Threadflip and Twicely – have shut down, as both proved to be unsustainable and were unable to raise more money. On the other hand, The RealReal, which acts as a luxury consignment service, recorded revenue of USD206 million in 2015, which is projected to reach USD400 million in 2016.