Circular fashion: Are resale and repair actually good for sustainability?

Using consumer surveys to calculate displacement rates has proved contentious in the past, not least because “humans are terrible at mental accounting” and “answers will have to be adjusted for bias and memory gaps”, says Francois Souchet, managing director of advisory firm Swanstant and former lead of the Ellen MacArthur Foundation’s Make Fashion Circular initiative. Still, WRAP says surveys are the best approach available at scale. The alternatives would be wardrobes studies or volume comparisons, but the former is time-consuming and expensive (requiring companies to monitor their customers’ wardrobes and purchasing behaviour over time) while the latter doesn’t give an accurate picture of displacement (only how fast circular transactions are increasing compared with new product sales).

The other challenge is communicating the displacement rate to consumers without greenwashing, especially when the methods for calculating avoided emissions are just as fiercely debated as whether or not circular business models avoid them. In particular, lifecycle assessments have come under fire in recent years — the EU’s Product Environmental Footprint (PEF) methodology, for example, has been accused of giving synthetic fibres a competitive advantage. WRAP’s Key says there will be pros and cons to any methodology, and the core issue is what we do to minimise those impacts.

How do you increase the displacement rate?

It’s worth keeping in mind that calculating the displacement rate of circular business models is not the end goal, says Souchet. “We have found that brands can impact displacement through numerous decisions linked to the connection between new and circular transactions. As such, measuring the displacement rate might give a static answer to a dynamic problem.” The ultimate aim is to increase the displacement rate and use circularity to effectively curb overproduction and overconsumption.

There are several ways circular businesses can do this, Souchet continues. Confidence that circular business models will deliver can be buoyed by authenticity guarantees and seller verification, as well as traditional e-commerce plays to help people get the right size, look and feel. Convenience can apply to the purchasing journey, as well as where the circular business model is positioned in the broader retail landscape (or website homepage). Incentives could include price, loyalty programmes and discounts. And desirability can be increased through mainstream partnerships (such as Ebay x Love Island), challenging the dominance of newness and normalising circularity through social media and red carpets.

There’s scope to improve WRAP’s methodology in the future, says Key. Right now, for example, the calculation looks at each circular transaction in isolation and cannot account for products that might be resold, repaired, rented or repurposed multiple times through various circular business models. “If you wanted to look at the displacement rate of an individual item over time, you would need to be able to track the journey through digital product passports (DPP),” she explains. “This isn’t currently possible on a large enough scale to give meaningful results, but it could be in future.”

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