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How Can Fashion Industry Become Fully Circular?

Jun 29, 2021
How Can Fashion Industry Become Fully Circular?

As consumers become more engaged with sustainability issues, circularity will be the key to a more sustainable future.

According to McKinsey The State of Fashion 2021 report -the article by Libbi Lee and Karl-Hendrik Magnus - with garment production volumes growing by 2.7 percent annually and less than 1 percent of products recycled into new garments it seems action on circularity is crucial.All fashion value chain stakeholders have a role in driving the circularity transformation.

The fashion industry aware that “less is more” meaning the less impact we have on our planet, the more benefits will accumulate for business, people and environment. Scaling circular business models, through which companies employ a range of strategies to reduce waste and use resources efficiently, as well as help customers to do so, too. In 2021, we see circularity moving towards centre stage.

The impetus to act on the environment is emphasised by shifting consumer attitudes. Regulators and policy-makers are also on board, more generally, measures such as the EU’s carbon border tax will promote circularity by making the economics of onshore recycling and other circular models more attractive. An industry-wide circular business model is a long way from being realised. As the industry makes progress with the “Rs” — reducing, recycling, refurbishing, reselling, renting and repairing — and despite good intentions on the part of some players, garment production volumes are predicted to grow by 2.7 percent annually between now and 2030. The priority, therefore, must be to set circular strategies, take planned action to scale solutions.

The Difficulties in Scaling Circularity

The way in which value is created in circular systems is radically different to the way it is created in linear systems. In essence, a single garment can create value repeatedly — through sale and resale, repeated rental, or being sold, repaired, returned, refurbished or recycled, and resold again to start the loop over.

With some of the industry’s leading names showing interest, circularity is gaining momentum. However, three key boundries are preventing adoption at scale:

Capturing value requires durability or recyclability. Without durability or recyclability, there is likely to be significant erosion of product value. Refurbished products can command relatively high prices if the refurbishment is carried out reliably, which is not always easy.

Enabling circularity involves a complex web of logistics. Resale transactions are currently mostly peer-to-peer, with individuals deciding whether the resale value is worth the time and energy. The key challenges are logistical, including laundry and delivery.

Engaging consumers requires overcoming obstacles. While circularity is winning fans among some consumer groups, it is still an abstract idea to most and terms such as recycled, upcycled, repaired.

What Will It Take to Scale Circularity?

The apparel ecosystem is fragmented, standardised solutions, therefore, are unlikely to emerge anytime soon. More probably, a variety of strategies led by a diverse cast of actors and predicated on three foundational capabilities will be seen:

Embracing Sustainable Design. Circularity starts on the drawing board, and with the textiles and materials that designers use for their creations.

Companies should: • Invest in, nurture, pilot and test alternative materials and processes for a circular system; • Radically reduce production waste and support, train and incentivise suppliers to reduce and reuse fibre, chemicals and packaging •Reskill designers and stimulate circular design innovation; • Create momentum by collaborating and developing tools

Ramping-Up Reverse Logistics. Through reverse logistics, companies can recover items from disposal or secondary resale and thereby continue to gain value.

Companies should: • Design reverse logistics to optimise value retention, either by partnering with a trusted intermediary • Leverage store networks to create in-store circularity hubs; • Build out non-store collection points and home pick-ups to improve accessibility. Optimize sorting facilities and recycling technology, either in-house or with partners; • Eliminate single-use packaging

Supporting Customer Adoption. For younger consumers born into the sharing economy, adopting circularity is a natural step. However, older consumers may require education and encouragement. Some consumers believe there is a hygiene issue with second-hand clothes, and others struggle to translate their sustainable values into actions for a wide range of reasons. Companies should: • Offer rental options such as subscription services and the option to buy rented products at a discount; • Borrow online marketplace techniques to filter, sort and group assortments, or leverage retailer-curated collections • Enable peer-to-peer business, including resale and rental, and sweeten the deal with logistics and digital solutions; • Create timeless collections, reflecting the declining prominence of seasonality; • Offer tips for care and repair; • Enable returns and recycling; • Develop data strategies to inform business decisions.

Driving the Future Circularity Circularity is likely to be one of the key business trends of the next decade. To realize this, a collective effort is required, in which fashion companies, customers and all participants in the value chain collaborate. To date, players that feature sustainability in the centre of their branding have been at the forefront of circular practices, as well as some established luxury brands owing more so, perhaps, to the resale value of their stock rather than their eco aspirations. Going forward, mass-market brands to scale their efforts is expected. Marketplaces can build on their size and logistical capabilities. As consumers become more engaged with sustainabil ity issues, circularity will be the key to a more sustainable future.

Posted by Abiteks

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