Why Fashion Circularity Is Good for the Bottom Line and How to Do it Right
Apparel retailers that embrace circularity have the opportunity to boost customer loyalty and create new revenue streams as shoppers grow mindful of conscious consumerism.
According to the “Keeping Customer Connections” research from PA Consulting Group, circularity in fashion can move from buzzword to bottom line impact when executed strategically. And the potential material cost savings globally could reach as much as $700 billion for companies that embrace circular business models. What’s more, the average U.S. household has $7,000 worth of unused goods hanging around, which could put $875 billion back into the economy, according to NPD data, and in the U.K., one ton of donated clothing generates $1,975, with a profit of $1,295.
There are clearly solid business cases for operating with environmental impact in mind.
As millennials have risen in buying power and influence, they’ve demonstrated a clear interest in new ways of consuming, including leasing, renting, sharing and reselling everything from clothing (e.g., Rent the Runway, Gwynnie Bee, Poshmark, thred), cars (Maven and car2go), music (Spotify) and spaces (Airbnb) instead of committing capital expenditure to an outright purchase. Millennials want access without the “burden of ownership,” according to Goldman Sachs research cited in the report.
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