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Why Circularity May Be the Next Big Trend In Streetwear

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While sustainability radicals would suggest that the most sustainable option would be to stop producing things, Rachael Dimit, WGSN senior consultant, says there’s a less radical option—one that makes great economic sense for fashion, particularly the men’s market.

At Project New York Monday, Dimit shared how millennial and Gen Z consumers are forcing major shifts in the fashion industry by holding brands to new standards for sustainability, transparency and the creation of a circular economy. And, she said, the change represents an opportunity for brands willing to take a stand on ethical and environmental issues.

Echoing the Ellen MacArthur Foundation, which recently released circular economy guidelines for the denim industry, Dimit said brands should not view sustainability as a constraint. “Rather it’s a catalyst for innovations,” she said. “And the circular economy is no longer a trend, but a full on paradigm shift. To me, it is the biggest disruptor in the fashion industry and the apparel landscape today and every day to come.”

Defining a circular economy

Transitioning from a linear to a circular economy is no easy task, but the effects a closed loop will have on Mother Earth is tremendous. According to data by Boston Consulting Group, Dimit said clothing consumption is expected to increase 60 percent by 2030. Meanwhile, one truckload of clothing is being burned or landfilled each second.

Brands, she added, need to look beyond the current “take make waste” extractive industrial model. Rather, the principles of a circular economy are based on designing out waste and pollution, keeping products and materials in use and regenerating natural resources. “The goal is to keep materials functioning at their highest utility at all times, preventing would-be waste from reaching landfills” she explained. “The big idea is for companies to squeeze out as much value as possible from their resources.”

Additionally, a circular economy aims to redefine the growth and success of a brand by shifting the focus to the positive benefits that a brand can have on society. This, Dimit said, means that the circular business model can actually enable brands to “decouple growth from the use of scarce and finite resources.”

And this is where small and nimble brands have an opportunity to outpace clothing giants. “This type of economy actually empowers grassroots and small business owners to use innovative materials and design processes that go beyond traditional manufacturing,” Dimit said. “Brands have the power to rewrite the rules of how to play in this circular space.”

The new luxury

The beneficiaries of a circular economy don’t start and end with the environment. Sustainability is increasingly raising the status of brands among millennial and Gen Z consumers.

“Sustainability is a new marker of luxury, premium quality and taste,” Dimit said. “[It] is a new sign of wealth, and perhaps, cultural ‘wokeness’ cachet.”

While older generations may have not known about issues like factory conditions and the decomposition time for synthetic fabrics, Dimit says more and more consumers today are weighing a brand’s or a product’s circularity and sustainability before purchasing. Citing a 2019 survey by the Center of Global Sustainability, she reported that 68 percent of Gen Z consumers made an eco-friendly purchase in the past year.

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And whereas brands could once use the opacity of their manufacturing to build desire and intrigue, consumers today demand transparency. “Knowing how and where something is made gives us social currency,” Dimit said.

However, brands should keep in mind that the circular economy and sustainability initiatives are a long-term play, and they may not see short term ROI from consumers right away. The fact is, Gen Z’s values—as vocal as they are about them—do not match their disposable income yet. “They can’t exactly put their money where their mouth is quite yet,” Dimit said. As the young cohort joins the workforce, she expects them to become the largest sustainable buyers.

Companies need to start preparing now for this shift in consumer habits. “Brands will need to move beyond simplistic messaging and token gestures and embrace real systemic change as consumers seek meaningful relationships that reflect their own progressive values,” she added.

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