Returns, rentals and resale: meet the brands making the change

Authors: Ella Yarrow and Rebecca Young

Without question, we are living outside of the safe limits of our planet’s resources. In fact, we haven’t been within the safe limits for the last 50 years.  In order to combat the environmental crises we’re experiencing – from climate change, to biodiversity loss, or pollution – we need to address what ‘business as usual’ really means.

The limits of consumption

For us to return to safe limits of consumption, we need to reduce global material extraction and consumption by a third. If we want to make a real dent in tackling the climate crisis, reaching net zero, and keeping global temperatures within 1.5°C of warming, energy efficiency and switching to renewable energy is sadly only half the story and would address 55% of global emissions.

So – what should we do? 

We simply have to change the way we produce, consume and use materials, products, food and other resources through a circular economy. This holistic approach aims to eliminate waste and keep materials and products in circulation at their highest value by prioritising regeneration, reuse, repair, refurbishment, remanufacture and repurposing (aka, going far beyond just recycling). 

 

How benefits can be achieved through circular principles

A typically overlooked and underestimated aspect of the circular economy is regeneration. This involves taking steps to encourage the environment to thrive, doing away with the ‘doing less harm’ mindset (which still produces a negative impact). Instead of continual degradation of our planet, we should be:

• building natural capital
• returning biological materials to the earth in our food system
• proactively creating positive outcomes for nature

Eliminating waste

Eliminating waste through treating complete disposal as a ‘design flaw’ is an extremely powerful mindset shift, and one that can help with returning biological materials to earth. Allowance should be made for materials and resources to re-enter the economy at the end of their use. Of course, an even better solution would be to eliminate the product in the first place, as waste can’t be created from nothing – but this is not necessarily a logical or practical approach in today’s world.

One brand that’s really making waves in the circular economy to reduce wastage is ZigZag Global, the market-leading global returns solution provider. Through their innovative platform, ZigZag connects retailers to an extensive global logistics network of over 200 warehouses and over 1,500 carriers (in over 170 countries). Their mission? To reduce the cost, waste and friction associated with returns, boost brand customer loyalty and make retailers more sustainable in the process.

ZigZag champions circular fashion ecosystems by moving goods back to the retailer, processed, and put back on the shelves quickly, prolonging the lifecycle of products (particularly fast fashion items which can be out of style in weeks). ZigZag also has partnerships with charities, refurbishing companies, and local marketplaces to resell goods and keep them out of landfills.

The bottom line is less waste = less harm, be that from releasing greenhouse gases, contamination, or direct ecosystem interference.

Mitigating the true cost of returns

Luke, Marketing Manager at ZigZag Global, says, “Returns are an unavoidable part of eCommerce… Returns will always have some environmental impact, but there’s plenty that can be done to reduce it. Encouraging the reuse of original sustainable packaging for returns, using greener carrier services like electric vehicles and locker services, consolidating international returns in-country, and avoiding landfill at all costs through charity donation or marketplace reselling. Companies like ZigZag facilitate all this and more – the online portal also allows for paperless returns which stops millions of paper labels being needlessly wasted each year.”

We asked Luke if ZigZag thinks consumers really understand the environmental impact of returns. “30% of UK consumers don’t know which carrier option is necessarily the greenest, so there’s plenty of education still to be had in delivery services alone. It’s often not in the best interests of retailers and carrier services to educate consumers on the environment impact of their purchases and delivery choices, so perhaps more can be done by external groups and governments.

Going paperless is another critical step. Implementing an online returns portal not only reduces the paper usage typically involved in the returns process – such as eliminating the need for pre-paid labels and customs declarations in outbound parcels – but also facilitates a seamless, label-less return process for consumers. New Look has achieved a 95% adoption rate of label-less returns and has eliminated dispatch notes, which is projected to save approximately 37 tons of CO2 annually. Such initiatives significantly reduce waste and contribute to a retailer’s sustainability goals.”

Resale, exchanges and peer-to-peer

“Exchanges can also be a great way to help retain revenue and give your customers a chance to order a replacement item in a different size or colour,” Luke says. “Whilst it doesn’t reduce returns immediately, it does reduce the need for customers to bracket their purchases (buy multiple sizes and colours) as they are safe in the knowledge you offer an easy exchanges option. Plenty of innovations are now available that can improve a retailer’s website so that returns become less likely. Retailers can take advantage of customer reviews, improved product showcasing through video, and there’s plenty of AI measures now that can give consumers a better feel about how the product will look on them.”

Luke continues, “Resale is a fantastic solution to the returns problem. It offers retailers a second chance of retaining some revenue and at least breaking even on the product, realising revenue it never would have got otherwise. Resale is not shackled by quality standards, and can advertise damaged and pre-worn items, further lengthening a product’s lifecycle. From a sustainability perspective it also keeps goods out of landfill.

Resale also gives consumers the chance to purchase more frequently from the brands they love – although it can rarely replace the full experience consumers get from purchasing new items directly from the brand, it will let them test out and fall in love with brands at a lower cost, ready to become more traditional customers in the future.”

Vinted makes history

Digital platforms, such as Vinted and Thrift+, are ever popular with sustainability-conscious consumers who want to purchase good quality pieces that don’t cost the earth. The logistical freedom offered to the users of reselling platforms – both buyers and sellers can be ultra selective with the shipping providers offered on many of them – has undoubtedly helped boost their popularity. 

It’s widely accepted that a large part of resale platform success also comes from the ability to haggle on prices peer-to-peer and get a coveted item at a bargain price, especially in a cost of living crisis where consumers are watching their pennies closely. It’s no surprise, then, that Lithuania-based Vinted has been recently announced as the first ever profitable resale platform, with profits in excess of $17m this last financial year.

For people who’d prefer to take the hassle (and haggle) out of the selling process, which can be laborious and time consuming – think trying to ship multiple items with multiple carriers and photograph items in less-than-favourable lighting – then Thrift+’s streamlined service may be the best choice. They’ll do it all; everything from photography to making sure shipments reach the right people at the doorstep. Their promise? “Clear out your wardrobe and leave the hassle to us. Just send us a Thrift+ Bag and we’ll sort, photograph, list, pack and ship your clothes. Earn credit to donate to charity, spend on Thrift+, or redeem on vouchers with our partners.” Circular fashion without the ‘faff’ gets a thumbs up from us.

Back in the fashion world, brands such as Hirestreet, Hurr and ByRotation continue to make headlines about changing strategies inline with consumer demand – such as subscription-style models – demonstrating their close eye on their target audiences. The latest data from Hirestreet shows that rather than just renting one item for a special occasion, renters are selecting multiple items in one go and wearing them over an extended period of time; perhaps for work, a holiday or just to try out a new style – “the top 15% of Hirestreet consumers are now renting an average of 30 products per year and the platform also noted a surge in the number of items per order, up from 1.4 items per order in 2022 to 2.7 items in 2023.” The increased appetite for rental is certainly encouraging.

Why should we care so much about keeping things circular anyway?

Keeping products in circulation means that raw material consumption and virgin material demand is reduced, which also reduces greenhouse gas emissions associated with primary extraction and processing. In fact, 90% of terrestrial biodiversity loss and water stress are also caused by these activities so nature degradation would also be slowed down, not to mention the lessening of other forms of pollution across land, water, and air. 

We’ve also got to remember that a lot of our materials are finite (they’re not going to last forever) so we need a plan B for shifting our consumption patterns and just generally being more resource efficient.

Fortunately, circular business models in the fashion space are on the rise, allowing companies to make revenue without making new clothes; It’s estimated that by 2030, these models could make up 23% of the global fashion market. 

As recognised by the Ellen MacArthur Foundation, there are four main business models that circulate products and materials in the economy:

1. Rental – including both large scale rental subscription models or even smaller scale peer to peer to facilitate the movement of products from user-to-user so the products can be used more.
2. Resale – second, third, fourth etc. hand items being sold again and again and therefore keeping resources in use for as long as possible.
3. Repair – continual maintenance and rectification of any defects or broken products to minimise the need for brand new garments and therefore the need for virgin material use whilst retaining quality and value. 
4. Remaking – creating a new product from existing components and resources, which could include disassembling and repurposing. This process also presents an opportunity for the phasing out of toxic or hazardous materials, and being substituted with regenerative or recyclable resources 

This presents a fantastic opportunity for better, more sustainable growth for the industry. However, these need to be executed in a way where revenue is decoupled from production and resource use in order to result in the benefits associated with a circular economy. 

Stick around for our next article in this circular economy series, which will be focussing on the most talked about brands innovating in the apparel repair space.