The future of Fashion is the circular economy
Adopting a business model based on the circular economy is no longer a choice for fashion companies, but a necessity. In fact, it is consumers who ask them for greater commitment to more sustainable production processes.
A 2020 study by IBM with NRF showed that nearly 60% of consumers have no problem changing their shopping habits if it could help reduce the environmental impact. 80% of them declared that sustainability is important, and 70% would pay more for brands that show to be environmentally responsible and sustainable.
Therefore, the circular economy is the answer to these needs.
What Is Circular Economy
EU gives this definition:
“The circular economy is a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing, and recycling existing materials and products as long as possible. In this way, the life cycle of products is extended.”
We can imagine the traditional economy as a linear system in 3 steps: take – make – waste.
Companies take raw materials, transform them into finished products, and shoppers, sooner or later, throw them away.
This system consumes a lot of resources and produces pollution and waste.
Instead, the circular economy creates loops where fewer products are created, used, reused again, and then disposed of without harming the environment.
The circular economy is applicable on numerous types of industries, including that of fashion. In this case, it's called circular fashion.
What Does Circular Fashion Mean?
Circular fashion requires a different view of 3 fundamental phases of fashion production:
In circular fashion designers create fabrics and garments taking into account the environmental impact of the entire life cycle of the product. The idea is to design garments that are durable and can be easily to recycled or transformed.
The goal is to minimize the consumption of natural resources and the production of waste and pollution. One way is to increase the use of recycled, ethically sourced, or local materials. Another is to rely to the many sustainable textile innovations.
consumer reuse and/or recycle garments as much as possible. At the end, garments are not thrown away but returned to the producers or given to other subjects that can safely dispose of them.
The goal is to set up a product life cycle that doesn’t bring socio-economic or environmental harm.
Why Is Circular Economy Important In Fashion?
Fashion is energy-intensive and one of the most polluting industries. This is particularly due to the Fast Fashion phenomenon.
Fast Fashion indicates a business model in which companies quickly produce numerous low-priced and poor-quality collections, consuming a lot of natural resources. Consequently, consumers are encouraged to constantly buy and, in parallel, to throw away clothing after a short time.
On the contrary, a circular economy in fashion brings several advantages. For example:
reduction of pollution and consumption of natural resources in a world where population growth and climate change are bringing increasing difficulties in this regard
less dependence on imports of raw materials
more eco-friendly industries and jobs
a better public image for sustainable brands
Is Circular Fashion Economically Convenient?
Well, according to the Circular Fashion Report, the potential value of fashion’s circular economy could be about $5 trillion.
3 Ways In Which Fashion Companies Are Applying Circular Economy
1. Resell and Rent
Both retailers and luxury brands are incorporating second-hand into their business strategies.
Second-hand includes both reselling and renting used garments. Indeed, analysts expect that in a few years 20% of the turnover of fashion brands will come from these two activities.
To ensure a longer product life, fashion companies are already introducing repair services. Thanks to these services, consumers can send damaged garments back to the producer, which will repair them.
3. Better inventory management
Circular fashion also includes a reduction in unsold inventory. These in fact risk turning into waste to be disposed of.
For this reason, many companies are equipping themselves with management systems capable of better predicting customer purchases and more precisely calibrating production to avoid unsold goods. This brings both environmental and economic benefits.