Circular retail strategies are top of mind for consumers

In the last of our Create Better white paper insights, we look at interiors and how retailers and brands are extending the life of products.

Following closely in the footsteps of fashion’s recommerce boom, secondhand interiors and circular retail strategies are going mainstream. At WGSN, we’ve been tracking the rise of low-impact consumerism, closed-loop supply chains and secondhand products since 2018, when we forecast ‘the end of more’. Like many trends, the pandemic has only accelerated consumer awareness, shining a light on personal consumption habits and their impact globally.

It’s not just sustainability concerns pushing consumers to embrace secondhand and circular products; it also dovetails with a recessionary mindset and the growing number of consumers who are embracing frugality.

An August 2020 survey by US recommerce retailer Decluttr found that 45% of Gen Z consumers are becoming thriftier in order to build confidence in their financial future, while 72% are trying to think of creative ways to save or make money. Millennials, many of whom are now living through the second recession of their lifetime, are also mindful of how they’re spending.

Returning large pieces of furniture to the production chain can be technically and logistically challenging. As Gen-Z consumers begin renting and Millennials continue to purchase their own homes, they will look to sustainable secondhand markets, recommerce platforms and subscription-based rental programmes to furnish and decorate them, representing lucrative potential for brands and retailers.

Business strategies

• There are many retail options; experiment with take-back, recommerce and buy-back programmes as a way to incentivise more sustainable habits among customers. Make buy-back easy for shoppers with in-store drop-off or in-home pick-ups, and offer incentives such as store credits or percentage discounts. IKEA Australia launched a furniture buy-back service in 2019 and will roll this out to global stores over the coming months
• Another solution is renewal and refurbishment, as global interest in mending and crafting pushes brands to rethink how they can give their own products a longer life through repair. Examine your supply chain to find product areas that can be recycled and reimagined into new lines, and create enticing take-back or buy-back programmes that galvanise consumers
• Circular stores are taking this one step further. From mass brands to local stores, interiors retailers are creating circular ecosystems with new secondhand shops. According to ThredUp, the global resale market, including furniture, decor, books and clothing, is expected to take over the traditional thrift and donation segment, growing to $64bn by 2024. Retailers are tapping into this market, creating their own stores in which consumers can sell and purchase used products. Create secondhand retail channels online and in physical spaces to appeal to consumers who want to keep products out of landfill and save money

WGSN subscribers can see the full white paper, Create Better, here or catch up on our latest Food & Drink, Beauty, Fashion and Tech insights.