Overview:

80% of the worlds unwanted clothing are either burned or dumped in landfills. This is largely justified by clothing companies who put forth that it is more costly to repair products. Further justification for ‘dumped clothing’ is given by luxury clothing companies who feel that re-purposing/retooling their products removes the exclusivity from owning their products – therefore harming their business. Unfortunately, the absence of circularity in the supply chain has caused three notable negative consequences:

The clothing market has declined by 10%, and luxury brands have declined by at least 15% as a result of COVID-19. While this may not seem like a large decline, especially with the expected 6% resurge when things are normal, compared to other industries such as technology, PPE, and food, clothing (especially luxury) ranks on the lower end for a priority list. To ensure that when the next economic recession, pandemic, or next great technology emerges, clothing companies need to maximize revenue as much as possible by expanding their market share. Further, this can be achieved by saving money via refurbishing products into new ones, which therefore improves their survival since they need to expand their product lines.

It can be estimated that about 3-5% of global greenhouse gas emissions comes from clothes dumping which is part of the billions of dollars spent on air pollution every year. To put matters into perspective, Canada pays at least 1 billion every year as a result of air pollution. Eliminating ‘dumped clothing’ could save Canada thousands if not millions of dollars every year.

There is a rapid demand for sustainable clothing, which includes the second hand market. As such, this 24 billion global market is expected to jump to 51 billion in just three years. In Canada, 85% of Canadians participated in the second hand economy which is valued at 28.5 billion. Clothing and accessories made up 1/3 of the second hand economy. By not retooling their products, clothing companies are missing out on a massive market. This is especially the case for my Generation which multiple studies have found to be the most diverse and will prefer brands that are socially responsible.

While the above evidence should convince the average clothing brand that embracing circularity is necessary, at Rohan’s Green Deal, we like to promote solutions. Here, I am going to promote a solution that promotes a circular economy, while also ensuring that businesses maximize their revenue, savings, and their brand image.

Solution: A buy back program

In most (if not all cases), luxury clothing items are meant to last forever such as my mom’s 15 year old Chanel bag that she uses to this day. However, there are many customers who would like to upgrade, but are unable to justify spending the money on a brand new product.

As such, luxury brands can introduce a buy-back program in which consumers can trade in their item for a credit to purchase a new product. The ‘old’ product can then be sold as ‘vintage’, at perhaps at a higher price. Alternatively, the business could transform the ‘vintage’ product into accessories or other ‘main’ products through re-purposing such as wallets and phone cases. However, if the product is relatively new, and therefore cannot be sold as ‘refurbished’ (rather than vintage) since it removes the exclusivity of the brand, the product can still be refurbished into an accessory. If these options fail, then the products can then be retooled and re-purposed for general market supply chain. The luxury brands can establish contracts with manufacturers and other relevant parties to ensure that when the materials are separated (etc), they do not bear the logo nor ‘characteristics’ of the brand.

As a result, not only does this extensive program promote a circular economy and create many manufacturing jobs by avoiding ‘dumped clothing’, it allows luxury brands to still retain their target market. This is because such brands can still market ‘old’ products as vintage, but also repurpose other products into other new products that can be exclusively sold. Further, the brand can severe all ties with the product in question by ensuring that it transforms into generic material for the supply chain. This way, the business still avoids the cost of repairing products that it deems too expensive. Further, this expansion allows clothing companies to avoid some of the loss that a pandemic, recession, and keep up with changing demand.

Conclusion

‘Clothes Dumping’ is a massive problem that exists where it shouldn’t since clothes companies can co-exist with the growing demand of sustainability and economic unpredictability without hurting their overall brand image. The solution I proposed is one of many solutions. What is your ideal solution? How would you ensure the brand image stays secure while also moving forward into the future?