COP26 delivered some improvements on climate change targets. It feels like governments are just not capable of delivering the urgent change we need in order to meet the 1.5C target.
In that case, businesses must take a stand in the fight against climate change – and many are developing strategies to do this. It’s unclear whether these strategies are genuinely going to deliver the change we need or just a knee-jerk response to “we need to be seen doing something”. An example of this was the Business of Fashion “Voices” event, back in December 2021, which some might say sounded a bit “blah, blah, blah”
The WRI rightly identified that the elephant in the boardroom is consumption. Most businesses are still locked in a linear business model that rewards boards for driving more consumption of resources and products. This is misguided for two reasons:
- It’s lazy
- It’s shortsighted
We deserve more than laziness from our business leaders. It’s been too easy for too long to make large volumes of products and just sell them – but the reality is that linear business models are less profitable than circular ones in our experience. Businesses stuck in a linear model are throwing products out on the market and hoping that they’re good enough for a fair number of customers…and in doing this they’re losing sight of what their best customers actually need, and how to meet those needs. (It would be too hard to work that out and adapt to that, right?)
The reason it’s short-sighted is because many business leaders are too distant from the emerging customer segments – these leaders are in a different world to Gen Z and fail to accept (or even recognise) some of the vast differences in outlooks, beliefs and needs.
An example
In our work for the British Fashion Council’s Institute of Positive Fashion, we sought out people who buy and use more clothing than the average customer. Some of their responses were eye-opening and highlighted needs that brands aren’t currently meeting.
This group of “intensive shoppers” is far more inclined to buy and sell used clothing, and to hire it for short-term use too. Even more surprising was the proportion of respondents who admitted they “bought” items, wore them, then returned them to the retailer for a full refund afterwards: over one third of the people we surveyed said they’d done this. More common among younger respondents, this trend to use brands as a free “clothing library” is well understood in the fashion sector.
Yet no-one is acting to address it with a customer-focused proposition.
Too hard? We don’t think so. Brands are currently writing off these returns and attempting to re-sell them, where they could be charging a use fee to the first customer in an open and more focused offer.
Recently we’ve seen Apple announce it will let customers repair their own products (and provide the guides and parts), and Marks and Spencer in the UK finally launch a hire business model for clothing after many years of considering it. These are big brands for whom change can be challenging – but they’re only adapting to the markets they can see evolving.
If you’re wondering whether your business could do better with a circular business model, the answer is almost certainly “yes!”
Get in touch today if you’d like to find out how to do it.
