Durability, Reparability and Longevity: the core foundation of a circular model
A Circular Economy in the fashion industry means to extending the life of clothes. Clothing utilization rates have decreased by 36% compared to 15 years ago. By helping clothing find a second (and third?) life, companies can address clothing waste and gain additional margins per item ultimately decreasing the production of new clothing.
Increasing durability, reparability and longevity is essential to make clothes last and it will involve actors across the entire value chain from manufacturers and brands to consumers. This includes manufacturing clothes made to last, marketing clothes as items to wear beyond a short micro season, and convincing consumers to help play a role in finding a second home for items they are not longer using.
Durability is essential to the Circular Economy but has historically only been an obvious characteristic for certain types of clothing such as outerwear and high performance sportswear. However, promoting durability should be key for all product types and does not mean reduced revenues. Patagonia has adopted a clear strategy around durability and has still seen significant growths in sales revenues. During the Covid-19 pandemic, many companies selling quality basics have seen sales soar15. Promoting product durability can help brands foster a closer relationship between a brand and a customer. Furthermore, warranties to promote durability can also incentivize customers to repair clothing and consequently help foster stronger customer loyalty and better access to customer data.
Reparability is thus also key to maximizing the longevity of a piece of clothing. Brands can promote reparability to consumers by offering reparability services to maximize longevity or personalization services to see damaged or worn products in a new and refreshed light. Repair or personalization programs can also incentivize increased foot traffic into stores and encourage new purchases while maximizing longevity of previous ones.
Unfortunately, we observed during our engagement campaign, that very few companies have entered the life extension market for their products. Only one company is really thinking about solutions to “refresh” purchased items with personalization and patch solutions for breaks or tears which demonstrates a massive gap in the sector regarding circular thinking.
To maximize longevity, companies can also promote product life extension by getting involved with the second hand market if a product no longer matches a consumer’s needs. Strong relationships between a brand and a customer better connect to second hand clothing markets, while enabling companies to earn additional margins off the second hand life of a product. Luxury has historically been a more attractive market for second hand products, but new companies such as ThredUp who compete with fast fashion players on both price, variety, and brand selection are changing the game.
We only observed one company in our study who was beginning to take an active role in the second hand markets of products, but we think there could be more potential for this in the future.
Other business models that promote longevity can also be a growth opportunity for companies. For example, clothing rental models which address demand for ‘new’ clothes while decreasing new clothing production, also have additional elements to their value proposition. Rental models can provide additional boutique services such as stylist services to customers and can benefit from increased customer data on key metrics such as sizing, comfort and styling concerns. Also, as switching costs are higher, subscription rental services can also encourage repeat business foster greater customer loyalty.
Consequently, we encourage companies to broaden their business strategies to include new business models that help foster a Circular Economy. In the first year of engagement we observed that the exploration into new Circular Economy linked business models was at the nascent stage for most companies. While it is up to companies to determine how to fit these new business models into their overall sustainability strategy we do see this as an area of great potential for fashion companies. Regardless, these new business models are popping up (often by rapidly scaling start-ups). They have the potential to destabilise the linear business-models used by large players of the sector posing a risk for large companies unless they come to the market with similar business models and services.