Press Releases

Press Release 5 August 2021

Circular business model - the next frontier for retail growth

The need for a circular business model in the textile value chain has never been so critical. Earlier the concept was more a hype and looked upon as a futuristic and even idealistic approach to fashion. But it cannot be denied that years of producing cheap clothes with the help of ‘cheap labour’ has created an unsustainable supply chain in the US $ 1.5 trillion fashion industry. The linear take-make-waste approach that was the backbone of the industry for decades has resulted in consequences that are harmful to not only the environment but also the users of fashion.
Research has proved that the retail and use stage of the fashion cycle poses challenges that multiply the environmental footprint of the fashion industry. It is estimated that doubling the lifetime of a garment reduces its environmental impact by 49 per cent, by saving carbon emissions and water that would be used in the production of new garments. Circular business models aim to keep existing garments in use for a longer period while also changing consumer behaviour.
There is an ongoing debate on how a circular business model can be created and while there are no standard solutions, there are three steps recommended by McKinsey’s fashion industry experts - embrace circular design, ramp-up reverse logistics and support customer adoption.

What makes a circular fashion business model?
The starting point is zero waste in design
A lot of wastage is collected at the design stage because the designer is not satisfied and reworking is a norm using up a lot of resources. Significantly, 90 per cent of environmental impact occurs at the design stage of a product and to undo the harm, it is critical to think fresh in terms of product and materials innovation along with a shift in mindset. To go circular, companies need to reskill designers and stimulate circular design innovation. The key is to train their people as well as their suppliers to reduce waste in production and supply chains, and reuse fibres, chemicals and other resources to the maximum extent.
Managing waste with reverse logistics
Having a resolve to go circular is one thing and to find ways to do it is the real challenge. The lack of recycling technology, infrastructure and knowledge on how to manage waste and what all is important in the journey are still in the nascent stage of development. The best way to manage waste is through reverse logistics, which implies reselling or recovering items from disposal to continue deriving value from them. It is here that retailers can play a very important role by implementing in-store circularity hubs or creating non-store collection points. Retailers can eliminate single-use packaging and work with partners to optimise sorting facilities and recycling technology.
Creating awareness and acceptance for recycled products
All change is accelerated from the top and retailers can take a big step towards circularity by educating and encouraging consumers to translate their sustainable values into concrete actions. Engaging end-consumers in the entire process helps create a satisfying experience that goes beyond simply buying a product. The best example the clothing industry has, comes from market leader Patagonia, the outdoor clothing retailer. The company has an online platform for repairing, trading in, and reselling used Patagonia clothing, and not only educates consumers about the sustainability of its products, but connects committed individuals to organisations working on environmental issues in their own communities.
Giving values to value for viable business model
The idea of circularity is gaining traction very fast, but the reality is that very few have actually gotten on to the bandwagon. But post the pandemic, the fashion supply chain cannot ignore the need for a circular business model as also the customer awareness for the need. Market surveys by various organisations have shown that the most important takeaway for fashion retailers looking to succeed in 2021 is that doing good can positively impact the top and bottom line. Genuine efforts to become more sustainable and less wasteful will result in becoming a better company, yet to generate value –companies need to find the right balance between people, planet and profit.

About Apparel Sourcing Week

Apparel Sourcing Week (ASW) platform is aligned to the changing dynamics of the industry, moving in pace with evolving and shifting world trade of apparel sourcing while also acknowledging the changing needs and wants of the customer.

To facilitate the seamless process of sourcing for greater transparency and reach, the ASW platform offers the industry three independent verticals – Big Show, Marketplace, and V-Expo – to enhance business opportunities for all players in the fashion retail chain, in an environment of networking, knowledge, and inspiration. With the three verticals, the supplier has marketing opportunities all around the year like never before, while the buyer has multiple avenues to search his perfect sourcing partner from South Asia.

About the Organiser

Apparel Resources is well known for its benchmark publications – Apparel Online, StitchWorld and Resource Guide published from India, Bangladesh & Vietnam. These publications have been around in the industry for over 35 years, supporting, guiding and standing by garment exporters and the retail industry globally, providing them a platform to source better.

Order your pass
as a buyer, non-buyer,
press or an educator