Circular economy. Can it save the fashion industry?

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In the middle of March 2020, the world was ordered to stay home and it turned out that we didn’t need to buy new clothes to do it. That was quite a surprise given what was been happening in recent years. Our unrestrained desire for goods which are by no means essential has made the fashion industry one of the greatest environmental polluters, responsible for around 10% of greenhouse gas emissions from human activity.

  • Fashion is now a disposable commodity and the industry creates huge amounts of pollution and waste
  • Millennials demand more responsible environmental engagement from brands
  • The circular economy has the potential to change our habits for good

Awareness of the consequences of our unchecked shopping behaviors is growing and Gen Z is now starting to demand that brands take more responsibility for reducing the impact our wardrobes have on the climate. It seems that business-as-usual cannot continue and COVID-19 changed almost everything. It may be the wake-up call that makes us reevaluate our choices.

The fashion accounts for about 10% of global carbon emissions, and nearly 20% of wastewater. Washing clothes releases half a million tons of plastic microfibers into the ocean every year, the equivalent of more than 50 billion plastic bottles. What’s more, the equivalent of one garbage truck of textiles is landfilled or burned every single second! 

That is an ugly trend behind the garments that we now buy for pennies.

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See it – Buy it – Throw it out

“When you find a product you love, you can now buy it without leaving the app.” 

Instagram Blog

In essence, Instagram Checkout, the feature introduced at the end of 2019, was a clear message that the strategy of the most significant social media platform has shifted from social-focus to shopping. And it shows that, in spite of the fact that the minimalistic trends look cute on Instagram pictures, we are actually just throwing away the old and replacing it with the new. 

There was been a natural evolution over time. It all started innocently with pictures, then came the time of adverts, and, eventually, eCommerce. Influencers selling products as lifestyle advertisements on the platform made the evolution to Instagram Checkout a natural step for the app as it inevitably found a way to tap into the revenue stream. It allows users to buy any piece of clothing in the way we buy a pack of chewing gum—on impulse, without leaving the app. Easy and quick.


The fashion brands were prepared to address those needs, due to two main factors. First was the liberalization of international trade, especially since the mid-90s, when Asia, and China in particular, started to be a leader in textile production. As a result of cheap suppliers and the emergence of low-cost, fast-fashion retailers in the U.S., such as Walmart and Target, the price of clothing has fallen.

“Take a pair of men’s Levi’s 501 original-fit jeans. The price of this wardrobe staple climbed steadily for years, but that is no longer the case. They cost 58 USD in 2009, then rose to 64 USD three years later, only to fall back down to 59.50 USD last year.”

The Death of Clothing

It didn’t take long before European leaders copied this model. H&M and ZARA, using cheap textiles, have mimicked the runways and now sell jeans for around the 30 USD mark. Or course, they only last a few washes but, in the capitalistic economy, the continuous exchange of goods is crucial. When consumers start to perceive clothing as perishable goods, they simply buy more.

Companies have had to keep up with this consumption rate, so fashion collections stopped following the seasons a long time ago. It is now typical for brands such as ZARA or H&M to launch dozens of series per year. 
The industry had blossomed as a result of this shift to fast fashion. It grew between 3.5% and 4.5% in 2019, according to McKinsey and Company, and revenues are forecasted to rise from $481.2 billion in 2018 to $712.9 billion by 2022.

“Fast fashion is cheap clothing easily accessible for the masses in shopping malls. Products are very much inspired by high-fashion catwalks. In fact, many are on the verge of being exact replicas. The problem standing behind is the change it’s caused in our shopping behaviors and a constant need to stimulate the reward system by buying more.”

Monika Warężak, YUUGEN.

Overconsumption has, however, become an environmental problem. 

Elizabeth L. Cline, in the article “Where Does Discarded Clothing Go?, pointed out that “between 1999 and 2009, the volume of textile trash rose by 40 percent”, and that “Americans now buy five times as much clothing as they did in 1980”.

Data put together by the European Parliament in a comprehensive report, “Environmental impact of the textile and clothing industry,” is also alarming:

“It has been estimated that in 2015 EU citizens bought 6.4 million tons of new clothing (12.66 kg per person). According to the European Environment Agency (EEA) estimates, between 1996 and 2012, the amount of clothes bought per person in the EU increased by 40%.”

Environmental impact of the textile and clothing industry by European Parliamentary Research Service

And trash is just one issue that the fashion industry has neglected so far. Global Fashion Agenda estimates that “in 2015 alone, the global textiles and clothing industry was responsible for the consumption of 79 billion cubic meters of water, 1,715 million tons of CO2 emissions and 92 million tons of waste. By 2030, and at current growth rates, these numbers could jump by at least 50%.”


Gen Z demands low prices as well as high standards

Given the latest trends, such as voice or visual search, the real breakthrough for fashion brands in digital is still ahead of us. But, as ecological awareness threads are growing, the business-as-usual approach cannot last. The sins of the fashion industry are being exposed and Gen Z is not going to pretend they are not there. They are forcing brands to take action. 

At a time when global companies are desperately looking for ways to win the loyalty of Gen Z, they cannot neglect these demands. 

A brand’s alignment with personal values is essential to:
– 52% of Millennials
– 48% of Gen Xers
– 35% of Baby Boomers

Evolution of Retail: The Brand Perception Effect study from Euclid.

The expectations of Gen Z may seem puzzling to many. They need a lot of outfits to live their Instagram lives and their primary motivator remains as price, according to a Business Insider survey; however, at the same time, they only want to support the brands that they believe in.

Paradoxically, all of these claims are not mutually exclusive. Gen Z shoppers are seeking sustainability as much as they are avoiding unified looks. They head for alternative shopping models, like rental and resale, but they are willing to pay more for a certain level of quality. According to the report,The State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail”, 62 percent of Gen Z—who will begin entering the workforce this year—prefer to buy from sustainable brands. 

The values represented by brands are crucial these days to earn the young consumers’ loyalty, but their “wokeness” must be authentic. If it is just a PR strategy, the public backlash can be brutal, as was the case when Greenpeace called out Nestle’s plastic initiative as “greenwashing”.

From linear to circular 

Taking separated actions is, however, significantly different than taking responsibility—especially for brands that, until now, were only focused on making money. The whole industry was built on that simple “take-make-waste” model, and so the whole industry is a problem. To take responsibility, brands would have to change the pattern; given that this current model generates huge revenues, a change in strategy due to a shift in conscience may be hard to explain to stakeholders.

Yet, today, when climate changes are striking hard, shoppers have started to demand that companies get serious about putting the planet before profit. The public don’t hesitate to shame businesses which seem to simulate eco-friendliness; moreover, they vote against them with their wallets and threaten to change their shopping habits. 

“Generation Z and Millennials are much more aware than their parents. This community, which will be 40% of the consumer market in the next few years, can easily catch falseness. Honesty is a very important factor for them while purchasing.”

Mateusz Oleksiuk, Less App

The issue is urgent. McKinsey stated in a 2019 report, that fashion industry members have to “self-disrupt their own identity and the sources of their old success to realize changes that win new generations of customers.” Even though it sounds a little bit bold, it is a fact that the B2C brands of all sectors must be likable to be shoppable. The fashion industry is hardly an exception.  

 According to a 2019 survey led by Hotwire, 47% of internet users worldwide have ditched products and services from a brand that has violated their personal values. Protecting the environment topped the list of reasons consumers switched, and 5% cited concerns about climate change. 

A circular economy based on reusability seems to be the one and only effective way to make a real difference. Big players have already started to embrace the trend. In January 2018, 64 of the world’s leading fashion companies signed a commitment to accelerate the transition to a circular business model. It is, however, not easy for them to change their way of thinking, and so many innovative start-ups have decided to search the solutions on their own. They deal with the problems of the fashion industry from different angles, such as promoting sustainable (slow) fashion, recycling, and reusability.

The COVID-19 impact 

The global lockdown due to the COVID-19 crisis has drastically changed the situation. In the face of an inevitable recession, people have suddenly lost their appetites for non-essential goods such as clothes or shoes. This has driven many brands on the edge. 

It is evident that this restraint will not last forever but the question of how COVID-19 will affect the fashion industry remains to be open. Will we use this sudden pulling of the plug to think through what we really need and how our choices affect the environment? Or, on the contrary, will the economic situation not allow us to afford luxury products and push us to buy as cheaply as possible? To make matters worse, will fear of “socializing” nip the recycling of clothes in the bud? Time will tell, but—one way or another—the fashion must change.

The mess we’ve been creating for decades will not disappear just like that. Companies from all sectors have to take a step back and collaborate to make in-depth changes. That is why we’ve decided to kick off the collaboration platform aimed at looking at the ways that technology can make fashion eCommerce more eco-friendly. 


Published April 20, 2020