The fashion industry needs to embrace the circular economy in order to reduce their environmental impact. Currently, it is the second largest polluter in the world (after the oil industry). From microplastics in the synthetic materials, to high water usage and pollution, carbon emissions, and the piles that end up in landfills, fast fashion is really detrimental.
How can fashion labels lower their impact on the environment?
A solution to tackling these environmental concerns is to push fast fashion brands to adopt principles of the circular economy. The adoption of some circular practices is growing in the fashion industry with some innovative brands redefining the concept of waste.
Some fast fashion brands are also making the move to more sustainable practices, such as reselling old clothes. H&M has a “re-made” collection that they started in 2019. Customers can drop off their old clothes, which are then resold, or recycled into textile fibres. COS also has a resale option, and 76% of their materials are ethically sourced. They also repurpose their excess fabrics into new collections.
Another fast fashion brand that has a sustainable line is Shein, one of the most popular online brands. They don’t offer a resale collection but their premium collection MOTF mentions sustainable fabrics and uses recycled polyester.
Zalando also has a resale collection that they call “pre-owned”. This encourages customers to return their old clothes. Zalando is planning to go completely sustainable by 2023, selling only sustainable brands. They also plan on reducing their carbon footprint while ensuring good working conditions, especially for their female workers in South India.
Zalando and COS seem to be making a real move towards becoming a sustainable fast fashion brands, with actionable clear goals. H&M and Shein however, are only slightly dipping their toes into a few select sustainable practices, with no real plan to become a low waste, eco-friendly fast fashion brand.
How do fast fashion brands embrace the resale model and implement circular economy principles successfully?
Resell is a component of the “reuse” aspect that Ccrave utilises in our vetting process, when considering brands to partner with. Let’s take a deeper look at the resale aspect.
There are three criteria that fast fashion brands need to meet, in order to sustain the resell component.
1. Have a positive social and environmental impact.
Collecting used clothes to resell will require certain processes such as sorting, cleaning, and mending. This will have an environmental impact for sure — for instance, using up water resources and creating water pollution with the cleaning process. Therefore, it’s important for the brands to understand how to minimize the impact. Another important factor to consider is: who will be in charge of this? Will they outsource to “cheaper” labour wages countries? Will the staff there be working in safe conditions and receive a decent pay? The main point for any brand adopting a circular business model is to lower the environmental footprint and have a positive social impact.
There are circular fashion brands such as Vintage for a Cause and HNST Jeans that take care of the whole take back process themselves, ensuring that everything is done with limited impact on the environment and with social fairness.
2. Satisfy the customer with an affordable and convenient value proposition.
If fast fashion brands adopt circular practices such as selling their second-hand clothes rather than sending them to landfills, they need to ensure that it makes sense for their consumers and the environment. Will the brand only resell some items in great condition, or fix up the less perfect ones as well? The first option still won’t address the large amount of textile waste. On top of that, customers will feel like they can only drop back a few selective items. Therefore, when reselling, the brands need to make it worthwhile for the customer as well. Some brands offer a discount for every return that they receive, such as Yuma Labs, Patagonia, and MUD Jeans.
3. Be financially viable for the brand while slowly replacing their current linear business model.
The circular business model of reselling needs to create value for the brand too. Brands need to have a clear idea of where the revenues and recurring costs are coming from, which is why it’s important to understand the customer journey well. What are the amounts of clothes they are willing to take back from customers? Will the latter get an incentive to send their used clothes? What will be their motivation? What will be the percentage price markdown on the second hand clothes, and will it be worth it for the customer to purchase a used item compared to a new one? How will the KPIs on the resale items compare to new products? If reselling puts the brand into debt, or does not justify the effort, then reselling is simply not a viable option. Brands that have excellent resale value include Zalando and H&M mentioned above.
These three criterias are crucial to determining a fashion label’s success in resale. There are, of course, other ways for brands to embrace circular economy principles.
Ccrave has an ecosystem of experienced consultants, innovative product designers, growth and sales acceleration marketers, and more. Contact us to learn more about our consultancy services and how we can help your brand along its circular economy journey.
