How fashion brands benefit from a circular economy model

Following the rise of sustainability within the fashion industry, it comes to little surprise that interest in the circular economy has also increased. As the cost of raw resources and materials continues to grow, partly due to climate change, logistics, and the pandemic, as does the harmful impact garment production has on the environment.

Circular economy shifts from a linear production process — an item is produced, purchased and then, thrown away — which eliminates waste and pollution. It ensures the products and the materials used to make them can be used again and again. This system aims to offer fashion brands and retailers a path to build their businesses more sustainably.

How a circular economy approach can help reach and retain more customers

Consumers, especially Gen Z and Millenials, have new expectations regarding fashion and sustainability and are not afraid to hold retailers accountable. In a recent consumer survey of over 4,000 online shoppers across the world, commissioned by BigCommerce, the majority of respondents rated sustainability as either very important (32%) or somewhat important (52%) when making a purchasing decision.

The global fashion resale market is also predicted to grow by 127% by 2026, three times faster than the broader retail apparel sector, according to a recent study conducted by retail analytics firm GlobalData. 62% of Gen Z and Millennials respondents stated they would look for an item second-hand before purchasing a new one, while 58% of the respondents also said second-hand shopping helped them in some form during inflation.

By taking steps to implement more circular practices, such as a resale option, recycling used clothes or repairs, online retailers can cultivate deeper relationships with these consumers and build customer loyalty.

For retailers, shifting to a circular economy also means a more secure, stable supply chain. By implementing more closed-loops production processes built on using existing materials to make new products, online retailers can protect themselves from potential future shortages, such as those witnessed in recent years.

What you can do as a fashion brand to become more circular

There are several steps retailers can take to become more circular, including offering repair services, resale possibilities and recycling initiatives in-store or online or via third-party websites.

Building a more circular economy within your company is linked to customer service and a streamlined returns process. If customers feel that it is too much effort, then they are unlikely to engage in any repair, recycling or resale program.

A seamless returns system depends on effective operations management, knowledgeable logistical partners and flawless customer service. You must seek partners that offer integrated systems so customer service can easily track any return items, assess the impact and contact customers accordingly.

Start building a sustainable online store now

The circular economy is a system devised to support not only the environment but companies and consumers around the globe alike. However, to truly succeed, ecommerce retailers will need more sustainable options, clear returns and flawless communications systems.

If you are not yet selling online or if your current platform can’t support your sustainable ambitions, start a free BigCommerce trial .