How Can Your Brand Succeed In a Circular Fashion System? 

BY VALERIA E. KONST

It is obvious that in a highly competitive environment, taking the courageous initiative to integrate circular fashion into your brand identity can be a significant yet profitable risk. In a concerted effort to innovate and reshape the fashion industry, numerous endeavors have been made to open up new horizons within the system. Throughout history, some successful attempts have involved inventing smart technologies and implementing marketing strategies that have redefined the rules and provided a fresh perspective on conscious consumption. Esteemed designers like Stella McCartney or Gabriela Hearst, as well as industry giants like Gucci, Adidas, Nike, and even fast-fashion leaders like H&M, have already played pivotal roles in this transformative revolution. 

Regardless of the success of their initiatives, they have embraced a new vision for their future, and every aspect of it, whether failed or successful, serves as a crucial pillar for the reconfiguration of the fashion industry. Let’s face it: whoever takes the lead will always be a step ahead in business. Sustainability is not merely a passing trend; it is our new reality, and no one can escape it. It is intrinsic to the natural progression of things. So, even if it appears non-profitable at the moment, nothing could be further from the truth. By integrating smart investments and absorbing the accredited knowledge of specialized professionals, future profits can be surprisingly lucrative. 

Source: The Round Up

Despite the numerous unsustainable strategies implemented thus far, the fashion industry remains resilient in the face of potential failure, often losing substantial financial investments. Consequently, in reality, the true apprehension lies not in the fear of failure but rather in the inability to adapt to new conditions, especially in the context of the evolving norms of the New Normal. Thus, the greatest challenge confronting the fashion sector is not merely the dread of failure but the imperative need to adapt to the changing landscape.  

It is crucial for each brand to adopt a new business model, which will ultimately define the true winners of the “New Normal”. Let’s examine the initial steps a brand must consider: 

  1. Your customers prefer brands that offer longer-lasting sustainable products.  

What if I inform you that your current marketing strategy, which involves creating products with shorter lifetimes and avoiding responsibility for repairs, will cause you to lose customers in the long term? Consumers have an unexpected demand for quality. This means they want assurance that everything they purchase will not only endure but also come with a warranty for repairs if needed. Providing a wise, sustainable, and durable product is not your only commitment. You must also demonstrate your brand’s identity by offering appropriate care instructions and guides that show your customers you care. Offering clothing repair and upcycling services is a big plus, and your customers are more than ready for it. 

According to a relevant study, conducted in 2019 with 175 respondents in the United States, 68% stated that durability is the most important factor when shopping for apparel. As we consider the steady rise in inflation and the increasingly expensive cost of living, the need for quality becomes even more crucial, extending into 2024. 

Which of these longevity characteristics resonate the most when you are shopping for apparel? 

Furthermore, in a study titled “Building trust in uncertain times” conducted in 2023, where more than 2,000 consumers were surveyed, the findings revealed that nearly a third (31%) of respondents considered the quality of products and services more important now than before the cost-of-living crisis. This sentiment was particularly pronounced among Gen Z and Millennials, with over half (54%) of 18 to 24-year-olds and 43% of 25 to 34-year-olds placing greater emphasis on quality compared to a year ago

This indicates that consumers are becoming more discerning about their purchases, allocating their money more wisely than in previous decades. This shift is a significant social and economic experiment, demonstrating that consumers prioritize essential items more and, despite inflation, are mindful of where they spend their money. Quality is not just a factor; it holds deeper significance. When consumers prioritize quality, they also consider the ethical and environmental implications of their purchases. What does this mean? Simply put, they care. 

Consumers seek comprehensive information about products: who manufactures them, where, when, how, and under what conditions. This new consumer power differs greatly from what we’ve seen before, and it presents an opportunity for businesses to bridge the existing gap. 

The sustainable fashion sector is rapidly expanding, with forecasts indicating that it will surpass $10,1 billion by 2025 , and there’s always room for new sectors to emerge. 

  1. Investment in New Technologies 

Undoubtedly, one of the most significant investments a brand can make is in new technologies. In the realm of circular fashion, adopting sustainable solutions across all facets is imperative for effecting drastic change. From product development to its final destination, every aspect carries an environmental footprint. It’s not only crucial for the dignity of your brand but, more importantly, for its financial future to invest a substantial amount that will generate new cash flows

Source: McKinsey

The risk associated with tech innovation may seem daunting, especially for smaller brands, but the potential benefits can be transformative. One can initiate progress through incremental steps, carefully considering each impact. Companies like Evrnu (link) and Renewcell (link) are among the most renowned for their partnerships with sustainable brands. Numerous suppliers are embracing the latest technologies in sustainable textile production and innovation, thereby contributing to a circular ecosystem

Source: PSQR

Through such pivotal partnerships, one can begin by adopting sustainable packaging as an initial step. Subsequently, the journey can progress towards integrating other sustainable techniques in design, production, and sales, all under the scrutiny of reuse and recycling

  1. Prioritize transparency 

One of the most significant steps toward a successful business model of circular fashion is to ensure transparency in all aspects of your operations. From waste reduction to minimizing carbon emissions and water pollution, every action defines your brand’s identity and must be disclosed. Consumers are increasingly weary of opaqueness; they demand and deserve to know what they are paying for. This reflects the New Reality, with numerous examples (link) from the past highlighting the failures resulting from poor brand transparency. 

The European Commission also emphasizes traceability: “all regulated products will have Digital Product Passports. This will make it easier to repair or recycle products and facilitate tracking substances of concern along the supply chain.”

Studies such as this underscore consumers’ unexpected demand for transparent brands, often favoring them over even the most renowned ones due to their transparency and honesty shortcomings. 

It’s not a coincidence that in the Fashion Revolution’s 2023 Transparency Index, which rates brands based on the amount of information they disclose, only a very slight change has been revealed for the eighth edition compared to the previous one. The average score of the 250 fashion brands increased by only 2 percentage points to an average of 26%. Interestingly, for the first time, two brands scored 80% or higher, including the giant Gucci

As a result, a lack of transparency can enable companies to make false or misleading claims about their products, such as sustainability claims, leading consumers to lose trust in them. This presents a significant opportunity for new players, especially in circular fashion, where consumers are most conscious. 

  1. Incorporate resale and rental methods into your brand’s DNA. 

By collaborating with recognized resale and rental marketplaces, you can ensure safety in many aspects. Circular fashion encompasses a multifaceted concept and is poised to become one of the fastest-growing industries in the next decade. 

You can discover your favorite brands at the top global second-hand stores, spanning from the United States to Europe, with just one click. Websites and apps like Vinted, Depop, Freecycle, Craigslist, and many others offer a vast selection from numerous brands worldwide. 

Source: Statista 

Avoiding scandals such as the sale of fake luxury bags, by collaborating with these platforms, you can establish diplomatic relationships. This enables the fashion industry to finally combat counterfeit imitations. The more informed you are, the better control you have. It’s crucial for every brand, regardless of size, to demonstrate its commitment to a more sustainable, circular, and ethical future. It’s a win-win scenario, but you are the key player. 

Even luxury brands are embracing the second-hand resale market. Companies like Gucci, Stella McCartney, Burberry, and Alexander McQueen are partnering with specific resale platforms such as Vestiaire Collective or The RealReal to facilitate customer resale of their products. They often offer incentives and focus on sustainability. According to a report by the Boston Consulting Group and Vestiaire Collective, the global resale market is projected to reach $64 billion by 2025, with the luxury segment growing twice as fast as the overall fashion industry. 

Key to success 

As we’ve delved into, the real key to success lies in a blend of knowledge and expertise, diligent work, and adopting new strategies. The necessity for the latest technological innovations, quality products, and transparent practices are crucial ingredients for a brand to thrive in a competitive landscape. Circular fashion will always face scrutiny, with new innovations emerging daily. Thus, remaining adaptable is essential for navigating evolving regulations. 

A significant lesson we’ve learned from past strategies is that to achieve success, one must consider all the ramifications of their design, production, sales, marketing, and the overall lifecycle of their product

The Circular Fashion Market was valued at US$ 6.09 Billion in 2023 and is projected to reach US$ 11 Billion by 2030, growing at a compound annual growth rate (CAGR) of 8.8% from 2023 to 2030. There’s a substantial opportunity awaiting your brand, and the path forward involves business restructuring and modernization. 

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