Rise of The Circular Economy in the Retail World

Over the past few years, thrifting and re-use of materials and products have experienced a surge in popularity. According to a popular resale store, ThredUp, the number of people buying secondhand is expected to double by 2027, adding up to a staggering $350 billion market.

These trends have also led to an increase in companies who are experimenting with the reuse of materials to promote their sustainability efforts, extend them to areas beyond packaging, and tap into these emerging consumer behaviors and markets. According to a report from branded resale platform provider Trove, there are now more than 120 brands with dedicated resale channels.

While these concepts are still in their early stages in retail, many companies are leaning more into these areas. Outdoor retail store REI is often considered an overall leader in resale efforts thanks to practices like in-store “garage sales,” the ability to buy used gear online through Re/Supply, and the chance to exchange gently used items for REI gift cards.

Another outdoor gear retailer Patagonia, which has long been committed to sustainability and circular economy, has recently launched an initiative called “Worn Wear Program” that allows customers to purchase pre-owned products along with their brand-new items. Patagonia also offers repair or recycle options for their items, championing slogans like, “better than new” and “scars tell stories.” As they continue their sustainable journey, one of the company goals is to integrate QR codes onto their merchandise, which would not only contain product information and eliminate the need for printed tags, but also chronicle the item’s reuse and repair history, aligning with Patagonia’s sustainability vision.

On the other side of the retail spectrum, luxury brand Ralph Lauren is also making strides in this space through its products and its offerings. One example is the development of Cradle to Cradle Certified Gold Luxury Cashmere Sweater, which company calls “a reimagined iconic product made to be worn, loved and live on responsibly for generations to come.” The company has committed to have five iconic RL products be C2C Certified by 2025 and this is the first. Another example is the firm’s effort to incentivize their customers to recycle any 100% cashmere items they might own regardless of brand. By 2030, they aim to ensure responsible life extensions for both past and future products, as well as ensuring that all new products are “designed, developed, manufactured and packaged in alignment with circular economy principles.”

As the popularity of secondhand shopping continues to soar and consumers continue to seek out products that are more sustainable, retail companies will have to embrace circular economy as an approach that is essential for both their environmental stewardship and business success.