Measuring the State of Circularity in the UK Fashion Industry
Part 2
Executive Summary
20
Introduction
Part 3
Conclusion
Part 1
The circular initiative
with an existing customer-facing circular business model claim to have a clear route to scale, with the plans and resources to get there successfully. But this doesn’t deter retailers altogether, and despite challenging market conditions and a lack of strategy, participation in all types of CBM is expected to increase. Another reality is that one size does not fit all, as the attractiveness and perceived feasibility of circularity models varies by value segment. Premium and luxury customers expect longevity from high-cost items, so circular design and repair models are considered more central to brand propositions and are therefore more mature. However, rental, remake and resale are met with hesitation as they pose a threat to brand
equity, value perception and exclusivity.
On the other hand, mid-market and value retailers are working with higher margin pressures and customers with different perceptions of value. Retailers that offer new products are afforded a much lower average selling price, particularly for rental, resale and repair. These businesses are able to leverage their reach to drive takebacks and recycling schemes, but financial incentives are critical for non-revenue generating initiatives and organisations contend with added operational complexity within stores and supply chains.
This research finds that, despite core business challenges, brands are actively looking to adopt circular initiatives, but are struggling with implementation and scaling. Although four in five (81%) organisations claim that circularity is a part of their five year strategy (and 82% of these have already implemented at least one circular initiative), just under two thirds (63%) of their customer-facing CBMs are in a low maturity pilot phase.
Ultimately, each CBM comes with its own set of benefits and challenges.
A lack of tangible roadmaps is a key issue – retail leaders have mixed confidence in the future of circular practices. In fact, no organisations
Current CBM participation vs future plans
Circular Initiative Landscape % of respondents with an initiative by market segment
Circular Design
Premium & Luxury
Mid-market & Value
42%
increase in participation
Repair
71% increase in participation
71%
31%
Circular Design
50% increase in participation
Resale
57%
15%
Repair
Takebacks
38% increase in participation
29%
31%
Resale
42% increase in participation
Remake
21%
38%
Takebacks
56% increase in participation
Rental
36%
23%
Remake
0%
10%
20%
30%
40%
50%
60%
70%
80%
21%
31%
Rental
Current
Future
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