Keeping products in use by scaling circular business models
Increasing production is not the only way to increase revenue. We need to decouple revenue from production and resource use to create a circular economycircular economyA systems solution framework that tackles global challenges like climate change, biodiversity loss, waste, and pollution. It is based on three principles, driven by design: eliminate waste and pollution, circulate products and materials (at their highest value), and regenerate nature. for fashion.
Today, the fashion industry operates under a take-make-waste model, meaning millions of tonnes of clothing are produced, worn, and discarded every year. We must reinvent this wasteful linear system and fundamentally transform the way we design, make, and ultimately enjoy our clothes.
What is The Fashion ReModel?
The Fashion ReModel is a demonstration project involving leading brands from across high-end, activewear, retailers, mid-range and high-street. It aims to identify solutions and unlock barriers in order to scale circular business models and begin to decouple revenue from production.
The fashion industry is rooted in reinvention, with the power to shape desire, trends and culture. By harnessing this innovative and creative potential, the industry can make circular business models the norm. This is the next step towards a more resilient fashion industry – one where businesses create diverse income streams and foster new connections with customers, and where policymakers support the enabling conditions for circular business models to thrive.
Let's make circular business models the norm: essential, accessible, and enjoyable.
Three drivers can help us achieve this vision of a circular economy for fashion: product design, circular business models, and infrastructure.
Making progress on these drivers will allow us to get closer to decoupling revenue from production and the use of raw materials.
What are circular business models?
Circular business models are nothing new. For decades formal wear has been rented, the charity sector has sold second-hand garments, and cobblers, tailors and laundrettes have been present in our communities. However, today these are not the norm.
At present, there are four main, customer-facing, business models that keep products in use in the economy and have the potential to decouple revenue streams from production and resource use: repairrepairOperation by which a faulty or broken product or component is returned back to a usable state to fulfil its intended use., rental, resale, and remaking.
Rental
This includes one-off peer-to-peer rentals by private owners, as well as large-scale rental and subscription models by multi-brand platforms or individual brands.
Repair
This is the operation by which a faulty or broken product or component is returned back to a usable state. For The Fashion ReModel, this includes alteration and repair services on products currently owned by consumers, not product returns or damaged stock.
Resale
This includes peer-to-peer sale of second-hand items, third-party marketplaces, and own-brand re-commerce.
Remaking
This is the operation by which a new product is created from existing products or components. This operation can include disassembling, re-dyeing, and repurposing. For The Fashion ReModel, remaking means:
Refurbishment to return a used consumer product to ‘as-new’ e.g. cleaning, redying
Remaking (or upcycling) on the condition that this is created using post-consumer fashion products, minimal new materials and the original fabric must remain intact
Remaking services exclude recycling or the use of recycled inputs for the creation of new products
How can you create revenue from circular business models?
Circular business models represent a significant opportunity for new and better growth in the fashion industry. They allow customers to extend the life of their most treasured clothes, offer the potential for items to journey through the lives of many people, and can even go beyond a physical product into a digital dimension.
There are multiple opportunities for organisations to generate revenue through keeping products (garments, bags and footwear) in use. The below outlines a variety of approaches that organisations could employ.
For more information on actions that businesses, supported by policymakers, can take to make sure their business models are circular, and to maximise the positive outcomes, please refer to our four key actions.
