{"id":155002,"date":"2023-07-26T07:00:59","date_gmt":"2023-07-26T06:00:59","guid":{"rendered":"https:\/\/startups.co.uk\/?p=155002"},"modified":"2023-07-26T08:58:07","modified_gmt":"2023-07-26T08:58:07","slug":"fashion-circular-economy","status":"publish","type":"post","link":"https:\/\/startups.co.uk\/marketing\/fashion-circular-economy\/","title":{"rendered":"Fashion retailers embracing the circular economy"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text]Nobody will be in any doubt the<\/span> rising importance of the environment for businesses <\/span><\/a>of all descriptions. In fact, sustainability will increasingly impact retailers whether that be through legislation forced on them by policymakers or customers choosing to only shop with retailers and brand owners that operate to ethical standards.<\/span><\/p>\n

Emphasis on experimentation<\/h3>\n

Against this backdrop we are seeing the rise of retailers embracing the circular economy, which encompasses resale, repair and the rental of products. The aim is to give more than just a single, short life to products and right now retailers<\/span> are working out how best to handle such activities. For many this involves <\/span>much experimentation.<\/span><\/a><\/p>\n

Certainly the prize for cracking the resale market is meaningful because we are seeing strong forecast growth in this area. On a global basis<\/span> the market for pre-owned goods reached around $100 billion in 2022 and it is forecast to hit $250 billion by 2027, according to the Ellen MacArthur Foundation. At that point it would account for a sizable 23% of total retail sales.<\/span><\/p>\n

Big brands leading the way<\/h3>\n

Of the big players, Selfridges has been very proactive in this area. It has set itself the aim of having 45% of its transactions taking place through circular products and services by 2030. To this end it has launched various in-store activities around its Reselfridges initiative including pop-ups supporting the exchange of used products for store credits and repair services.<\/span><\/p>\n

Jigsaw has also been busy, with the launch of a rental, subscription and resale service called Jigsaw Forever. Beth Butterwick, CEO of Jigsaw, says: “With the secondary market growing eleven-times faster than the primary market, sustainability is undoubtedly going to transform the fashion industry over the next 10 years.”<\/span><\/p>\n

The company had also<\/span> partnered <\/span><\/a>with My Wardrobe HQ to offer a repair scheme pop-up within one of its London stores. There is no doubt that most retailers are choosing to partner with sustainability specialists to help them with their early circular economy experiments.<\/span><\/p>\n

Market traders<\/h3>\n

For a growing number of brands this has involved setting up marketplaces on their websites for customers to sell their goods through. They have either worked with recognised third-party platforms such as The Real Real and ThredUp or with the peer-to-peer marketplaces including Depop and Vestiaire Collective. Others have chosen to use the technology of the likes of Trove and Reflaunt, which handles all the back-end infrastructure for trade-in and resale.<\/span><\/p>\n

The objective for retailers and brands is to generate extra revenues from existing products by selling them multiple times. This moves them away from constantly having to make new products, which is the cause of the majority of the negative environmental impact.<\/span><\/p>\n

Rental revenue<\/h3>\n

The other area where we are also seeing retailers work with third-party specialists is with rental programmes. These include <\/span>Rent the Runway, Hirestreet, HURR and Le Closet. Such partnerships include: Flannels and HURR offering ready-to-wear items and accessories for rental periods of four, eight, 10 and 20 days; and Asos and Hirestreet delivering the first ever rental collection from Asos that initially encompassed 180 styles focused on women’s occasion wear with items from £275 offered for hire over four, 10 and 30-day periods, with the starting price at £20.<\/span><\/p>\n

Hirestreet has already worked with other retailers to launch rental collections including Marks & Spencer and a number of brands in the Boohoo portfolio including Warehouse, Oasis and Misspap. With the lower price-points of these brands it highlights how the rental market is increasingly covering all parts of the clothing sector. <\/span><\/p>\n

Another area of activity is with children’s clothing. The likes of John Lewis has partnered with <\/span>The Little Loop to use its platform for the rental of items for youngsters who invariably grow out of clothing incredibly quickly so a rental proposition makes great sense. <\/span><\/p>\n

It is maybe not surprising that most of the rental activity currently taking place involves clothing, which is forecast to grow in the UK by 62% this year and a cumulative 164% in the years up to 2026, according to GlobalData. This will contribute to the 19% CAGR that is predicted for global growth from 2022 to 2026 and will take the market size well beyond its current $4.9 billion.<\/span><\/p>\n

Sport goes circular too<\/h3>\n

However, it is not simply about clothing rentals because<\/span> over recent years there has been a growing acceptance of the rental of goods rather than buying outright. This has helped broaden out the range of products that people are willing to rent\/hire.<\/span><\/p>\n

Among those dipping their toes into this interesting market is Decathlon that has rolled-out sports goods rentals across all its UK stores – involving bikes, kayaks, paddleboards and tennis rackets. The retailer says it has committed over £1 million worth of sporting products to the scheme in its first year.<\/span><\/p>\n

Bikes have long been a product that has been hired out (especially when people are on holiday) but this has expanded out to include subscription services from the likes of Bikeclub. This involves children’s bikes, which can be changed over time to larger models as the child grows, for a monthly subscription fee.<\/span><\/p>\n

Final thoughts<\/h3>\n

It is undoubtedly early days for many bigger retailers and brand owners on their circular economy journeys.  Growing environmental imperative and consumer sensitivity around sustainability suggests this will be an area that is increasingly active and vibrant that SMEs should be keeping an eye on.<\/span><\/p>\n

Read more about sustainability, SMEs and retail:<\/strong><\/p>\n