The Circular Economy spells further changes for the Retail model..
The phrase Circular Economy has been bandied about quite a lot recently. It seems we are right at the beginning of several new models of Retail. Actually - Maybe not quite as new as many think..
'Circular Economy' - Definition: An economic system aimed at eliminating waste and the continual use of resources. This regenerative approach is in contrast to the traditional linear economy, which has a 'take,make, dispose' model of production.
We are now increasingly aware of our impact on the planet, and the changes necessary to protect the future. This is no longer a generational view. Rather it's generally accepted that the traditional 'consume, consume, consume' approach is tired and in need of change.
Here are just a few examples of the many emerging retail models in this space..
'Re-Told' is a rather lush retail collaboration between Harrods & the NSPCC. In 2019 the 'Re-Told' charity store 'popped up' for the month of May in Marylebone. It was the second event in this style that Harrods has delivered, and was even more beautifully executed than the first. Of course - the shop-fit / design was stunning, yet donated. And the store stocked donated and pre-loved vintage pieces - many of which were from leading designer brands and / or from high profile people..
All funds raised went directly to the NSPCC. And whilst the results of this years event aren't yet widely available, their previous pop up on Sloane St raised over 110k in a very short space of time.
Harrods interviewed at the time for Retail Gazette - "With Fashion Re-Told, our ambition is to change the public’s perception of charitable shopping by offering a Harrods-level of service, product range and shopping experience. We want customers to leave not only knowing that they have raised money for a hugely important cause, but also having bought a luxury item and experienced a truly unique shopping experience.”
This was by no means just a publicity / CSR exercise. This was an example of a leading Retailer - doing just that. Leading the way! It's likely we will see more collaborations between the non profit space and the private business space in coming years. Those wheels are already in motion.
A good local example is the mutually beneficial collaboration between TKMaxx & Enable Ireland. That's been a long term relationship that's served both parties very well. We will see more of this collaborative approach as the pressure increases to recycle and re-use...
Rent The Runway
Rent the Runway was started in 2009 by two Jennifers' (Hyman & Fleiss). It started as an e-commerce business. Bricks and mortar sites then followed - In New York, Chicago, Washington, San Francisco & Los Angeles. At RTR customers can rent designer clothing for a 4 or 8 day period. The cost of this can be as low as 10% of cost and each rental includes a back-up size at no additional cost to ensure it fits. Customers can get a second dress style for an additional fee. Rental prices also include the dry cleaning and care of the garments.
Rent the Runway also rents children's clothing, accessories, including jewellery and handbags, and sells related product - including lingerie, tights, shapewear, and cosmetics.
Their first international office opened this year on our own gorgeous west coast of Galway!!
Watch this space....
MUD are a sustainable and certified fair trade denim brand that's Netherlands based, and who started gaining traction around 2013. MUD really epitomizes the circular economy ethos. They lease their jeans to consumers for a small monthly fee. After a lease period of one year, consumers can switch them for another pair and continue leasing, return them for recycling or up-cycling purposes - or they can just keep them. The lease contract includes free unlimited repair services. This offering is online, and also available in a limited number of sustainable concept stores around the globe.
The mindset MUD have is one of using rather than owning, with return of the jeans promoted.
We are going to see this model repeated in coming years. And repeated! (It was always only a matter of time before Retail went SAAS ).
We'll see this trend emerge cross-category also! Think about items that are difficult to recycle - I anticipate these may come down the line first. Our future holds more ''use not own'' retail business.
So what does all of this mean?
Retail is changing. And this change is not just about digital v bricks & mortar.
There's much in the press and social media about the cotton trade for example. About sustainability. About provenance of product. The debate on plastics for example. And the subsequent damage and environmental impact that accompanies plastic.
These retail trends aren't fads. They aren't going away.. It is entirely possible that we are potentially looking at a future where plastic for example - will be tracked - from production to end use and throughout any recycling. This future is coming much faster than you may think.
Fast Fashion is already taking notice of these emerging trends. For example - Zara recently came out with statement that their clothes will all be made from 100% sustainable fabrics by 2025.
Many major supermarkets are already beginning to remove all plastics for loose fruit veg and bakery items. Sainsburys are plastic free on loose fruit & veg/ Tescos following suit.. When Big Business is sitting up and taking notice - it's a sure sign we all need to also!
So - In summary - Some key Trends to watch out for;
SAAS Model Retail - Leasing products rather than owning them. "Use / Not Own." This will not just apply to clothing / It will apply to many consumer goods. It will apply to both short term loan and longer leasing agreements.
Non Profit and Mainstream Retail Collaborations. - This wont just be about CSR. There will be a higher demand for vintage clothing - Quality Vintage Clothing and furniture in particular.
Traceability and provenance of product. - The trend has started already with food. We will likely want to know where much of our product originated. We will also want to know that it was created responsibly.
Let me know if you find this article interesting or would like to hear more about emerging retail business models. The examples above are just a few of many.