Going Circular

The Age of Fashion Greenwashing

Key Takeaways

  1. By partnering with resale platforms, luxury fashion groups are able to attract new customers and strengthen brand loyalty by revitalizing interest in vintage pieces.
  2. Resale platforms promote the idea of a circular economy but only pristine and never worn items are accepted. Damaged or visibly worn items continue to contribute to the industry’s detrimental effect on the environment.
  3. Despite the inherent flaws in the recommerce business model, reusing worn clothing keeps items out of landfills for longer. A broader more systematic change within both the industry and by extension its consumer behavior is necessary to accomplish real environmental sustainability.

The fashion industry’s ecological impact can no longer be ignored. The need to address this issue has gone from a fringe topic championed by small niche brands to a prominent psychological factor that influences consumer spending and by extension redefines brand ethos. Conglomerate businesses have had to adapt the way they manufacture and sell clothing in order to move towards a circular industry in order to remain relevant. Yet consumer agencies point out that many companies are in fact, engaging in greenwashing since enforcement across global supply chains is tricky (Vogue Business). While many brands have created “ambitious targets that require technological leaps that are years or even decades away,” by aligning themselves with pre-owned clothing platforms brands can tap into the zeitgeist in the interim (BOF). 

The pandemic has accelerated the conversation around sustainability and the need for brands to adopt circularity as their economic model. Defined as, “keeping resources in use for as long as possible, getting the most value for those resources while in use,  and finally recovering and regenerating products and materials at the end of each service life, according to Maxine Bedat of Zady, an online sustainable apparel company, as told to Business of Fashion. Fast fashion brands behemoth H&M has championed circularity with its Foundation Accelerator Program awarding money to sustainable startups for technological innovations such as 2020’s Global Change Award grand prize winner Galy, a startup that engineered lab manufactured cotton. This cotton “lessens the burden placed on farmers,” and “takes only 18 days to produce and releases 80 percent less water and gas emissions.” (Sourcing Journal) Similarly, luxury group Kering has previously invested in textile blend recycler Worn Again, demonstrating its interest in materials innovation. Yet it’s important to note that “At present, less than 1 percent of the materials used to create clothing is recycled into new clothing, according to the Ellen McArthur Foundation.” (BOF) The reality of brands that mass-produce clothing attempting to portray themselves as sustainable has not been lost on many environmental activists and consumers.

Recently, many brands have created partnerships with resale platforms in order to depict their adherence to the circular economy. Once seen as a hindrance to the luxury market, reseller clothing platforms were thought to dilute a brand’s image by making it available to consumers at reduced prices. As the stigma of secondhand wanes, “The percentage of [it in] a person’s closet or wardrobe is going to increase,” according to Sarah Willersdorf, the managing director and partner of Boston Consulting Group, “even hitting 30 percent.” (WWD) Aside from just aligning with the environmental sustainability trend, megabrands have noticed that used clothing is big business as well. Luxury group Kering has taken a 5 percent stake in the French resale platform Vestiare collective with a  €178 million financing round (Haus von Eden). Similarly, Burberry announced a partnership with The RealReal in 2019. This move enticed shoppers to buy new items at Burberry, with the used apparel acting as a gateway for consumers that have never purchased from the brand directly before. By working with these consignment and resale clothing apps, brands can reach new consumers while also strengthening brand loyalty (BOF). Mirroring Kering’s investment in Vestiare Collective, Vinted an app that was founded in Lithuania in 2008, that helps users resell their clothing has raised €250 million in order to expand the secondhand marketplace bringing its total valuation to €3.5 billion (Business of Apps) Etsy’s recent $1.6 billion purchase of Depop is likely the first of many resale consolidations to come. Known for its crafts and vintage apparel, Etsy’s move to purchase Depop is one way the brand can guarantee its longevity by appealing to Gen Z, the core demographic on the mobile app (Vox). 

Although resale remains a small fraction of the retail industry, it’s growing 21 times faster than the sale of new clothing (BOF). It’s become a viable business opportunity for brands seeking to expand their reach. By working in tandem with used clothing platforms, brands are able to align themselves with the circular economy which has been touted by these apps. Is this merely a more sophisticated take on greenwashing? The answer is complicated much like the problem of promoting sustainability within an industry whose lifeblood is dependant on consumption. Finding new owners for used garments keeps them out of landfills for longer, yet this does not in itself diminish the production of new garments within the industry. Experts point out that by creating a marketplace for used garments, sellers (often consumers reselling their used wares themselves rather than professional sellers) feel justified in purchasing new products with the money they’ve earned on their consigned pieces. (World Resources Institute) Retail brands continue to benefit from this partnership, despite its less than virtuous cycle.

Recommerce apps such as The RealReal have partnered with retailers such as Stella McCartney by offering $100 gift certificates towards the purchase of the brand’s clothing, similarly “The largest consignment platform, Thredup offers consignors the opportunity to earn credit for Reformation and Cuyana-both brands that champion sustainability-when they send in items for sale.” (BOF) Moreover, the discerning tastes of consumers means that only new or pristine items are accepted by these platforms, so stained or damaged clothing is not diverted from landfills or incineration. The same can be said for rental platforms such as Rent the Runway. Although they “may present a welcome disruption to retail’s ownership model... it’s not necessarily sustainable if the clothes that are being produced using hazardous chemicals,” says Emily Macintosh, the policy officer for textiles at the European Environmental Bureau. (The Guardian) By incentivizing consumers to shop via these promotions, brands receive direct financial gain. The additional pr benefits are arguably more advantageous since this partnership conveys a sustainable image to unsuspecting consumers which may only represent a tiny fraction of their actual business model.  

The resale and used goods industry has become mainstream. No longer exclusively relegated to the closets of price-conscious consumers, large brands have begun the process of consolidation and partnerships with resale platforms. This synergy proves beneficial to both the luxury groups and recommerce industry by promoting consumer spending and depicting a sustainable business model, despite that not always being the case. In order for these apps to truly become part of a circular economy, consumers must change their buying habits and purchase fewer products. In addition, buyers should gravitate towards seasonless luxury apparel rather than fast fashion garments which are often produced from toxic fibers, in unregulated facilities that may violate the labor rights of workers, and adopt habits to repair and refurbish items they already own instead of disposing of them. Simply claiming that participants in reseller clothing apps are contributing to a sustainable future, (e.g. Vestiare Collective which gives its users a badge saying “fashion activist” if they purchase and sell one item) is misleading and tone-deaf. Despite its flaws, these apps provide an opportunity to combat environmental waste in what is arguably the biggest issue of our time. The challenge lies in reprogramming consumer behavior and holding brands accountable to scaling up sustainable operations, rather than focusing on performative practices in order to look good to consumers.