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  • Writer's pictureLena Mayberry

Fashion Brands are Tapping into the Circular Economy

By Lena Mayberry

A photo of Levi's Brand Ambassador Hailey Bieber sporting denim from Levi's new circular economy initiative, Levi's Secondhand. Behind Hailey Bieber is a minimal clothing rack packed with vintage Levi's denim pieces.

The fashion industry is one of the most resource-intensive industries in the world. As much as 80% of a garment's total environmental impact can be traced back to its production, distribution, and disposal stages. The apparel industry has been slow to adopt sustainable practices. However, there's growing demand from consumers who want their clothing brands to operate with greater efficiency and responsibility—and this demand is forcing many brands to rethink their approach to manufacturing.

What is a circular economy?

You may have heard the term “circular economy,” but do you know exactly what it means?

It's a system that uses resources in a way that doesn't waste anything—an approach to design and manufacturing that aims for zero waste. It's as much about creating products that are made of all-renewable materials as it is about designing them to be reused, repaired, or recycled after they've reached their end of life.

The shift in consumer sentiment around fast fashion and its impact on the environment is driving apparel brands to take a closer look at their strategies and how to tap into the circular economy. Millennials and Gen Z are a large part of this shift. They want the integration of sustainability into clothing design, manufacturing, distribution, and disposal of apparel.

In the past, when an item was no longer wanted, needed, or sold it was simply thrown away. But with a circular economy, manufacturers are encouraged to design products with their end life in mind—reusing and repurposing as much material as possible through recycling, remanufacturing, and regenerative agriculture.

How does a circular economy benefit apparel brands?

One way brands are responding to this desire is in the form of recommerce – the activity of purchasing or reselling previously owned goods at a discount. Recommerce is about quality as much as it is about sustainability. Brands are embracing recommerce as an opportunity to address issues facing their industry, including sustainability concerns, consumer demand, and control of merchandising over the product's lifecycle.

While traditional retailers struggle to find methods of reducing their environmental impact, these companies have found ways to use data analytics and new business models to create value from what would otherwise be considered waste materials. There is little waste in this kind of consumer-driven circular economy, and merchandise often retains value throughout its lifecycle. This is a win-win scenario for everyone involved. Retailers are able to drive sales and reduce waste, while consumers have access to goods that meet their expectations for quality and sustainability.

And ultimately, as consumers become aware of the brand's efforts toward sustainability and the fact that it is not simply another business out to make fast money, retail firms will increase brand recognition. Besides the financial benefits of a circular economy, there are also social and environmental benefits to be gained. A circular economy helps to reduce pollution by keeping materials in use for longer instead of sending them straight to landfills.

Recommerce occurs on a spectrum of service models, and it can take many different forms.

Some brands are using recommerce strategies as part of their overall business models, and we'll look at some key ways that e-commerce companies have tapped into this trend by offering their own platforms for recommerce transactions.

It's no wonder that major fashion retailers are turning to the circular economy. Recommerce is a way for brands to create more value and extend the value lifetime of their products, redistribute surplus materials, and reduce waste by selling clothes secondhand.

H&M, Levi’s, and Patagonia have been leading the charge: H&M has a recycling program where customers with unwanted items can trade them in for store credit. In fact, in 2020, H&M collected 18 800 tonnes of unwanted clothes and textiles through their Garment Collecting program. That’s the equivalent of 94 million T-shirts.

Levi’s sells used jeans at stores and around the world through their own recommerce site, Levi’s Secondhand. Some denim pieces are curated by their team, but the majority of the pieces on there were brought by Levi’s customers. Anybody may turn in a Levi's denim item—even if it's damaged—for a gift card towards a future purchase. Garment digitization and Virtual Try-On technology could aid in recommerce initiatives for brands like Levi's, which have staple garments with high demand and resale value, such as their three most popular vintage jean styles: the 501, 505, and 517.

Lululemon offers up new yoga pants alongside its old ones at discounted prices in its outlet stores. Recently, the business introduced its Like New resale program, which enables consumers to exchange their "gently used" Lululemon clothing for store credit. The clothing is then resold at a reduced price. The company is focusing on the emerging commerce channel by providing clients with value and sustainability.

Shein is one of several online retailers that allow customers to sell used clothes back as well as buy new ones on consignment terms (a percentage of sales goes back to sellers). The fast-fashion retailer is leaving it up to its customers to handle the majority of the associated tasks, similar to how they would on the marketplaces run by eBay, Poshmark, or Facebook, in contrast to brands that have formed partnerships with businesses like ThredUp to oversee the logistics of gathering and transporting used items.

Eileen Fisher Renew’s initiative allows customers who donate their gently worn Eileen Fisher clothing — including coats, sweaters, and accessories — to receive $5 in Renew Rewards for each piece they return - no matter what condition it's in. Renew takes back products that clients no longer need and gives them new life by either selling the items to another customer or recycling them into a new product.

Retailers are responding to consumers' desire for sustainable products and consumption, and in the process, they are able to retain control of their products over their lifecycles.

It's clear that consumers' attitudes toward sustainability are changing how we shop.

The circular economy is a way to embrace sustainability. It’s about designing products that can be reused, refurbished, repaired, and recycled. Achieving this involves rethinking the design of all aspects of apparel—from how it is made to how it’s used and disposed of. As consumers demand more sustainable options from fashion brands, companies will need to take notice and implement circular practices in order to stay competitive in the marketplace.

Whether you’re looking to sell your old clothes, buy new ones, or find a new use for old materials, there are plenty of options for both consumers and brands. The circular economy is becoming more popular with customers, but it also presents some challenges for retailers who want to move in this direction. To succeed with recommerce as well as other circular practices, brands need to make sure they understand their customers’ needs and provide them with the right experience at every touchpoint along the way.

If you have any inquiries, want more details, or want to test out Couture Technologies' Virtual Try-On solutions go to:

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