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One-Third of Consumers Have Not Heard of the ‘Circular Economy’: Study

When it’s deliver-or-die, supply chains become the lifeblood of a company. To that end, the fashion industry has embraced technology to navigate today’s hyper-complicated supply chain, with myriad solutions shaping the first, middle and last mile. Call it Sourcing 2.0.

Takeback and resale programs by staple brands like Levi’s and Madewell are raising awareness of textile recycling, and programs like the Ellen MacArthur’s Jeans Redesign guidelines are working to ensure that more durable and circular garments are available on stores’ shelves. But are these efforts enough to engage consumers in the circular economy?

Yes and no, according to a new study by DNV, an independent assurance and risk management provider. In a survey of 2,900 consumers in the U.S. and in Europe, the firm found that 35.8 percent had not heard of circular economy. Of those that had, 45 percent indicated they have extensive knowledge and actively participate.

Unsurprisingly, given Gen Z’s call for action against global warming, DNV said knowledge and engagement are higher among younger generations, with more than 53 percent saying they actively participated. In comparison, 32.4 percent in the oldest grouping said the same, meaning there’s significant potential to engage them further, the report said.

Both traditional and social media are how most consumers acquire much of their circular knowledge, followed by “political discussion” and through friends, according to the survey. Despite companies building QR codes into their labels and working with eco-storytelling platforms, only one in five respondents mentioned that they get their information from manufacturers and suppliers directly, indicating that businesses may need to do more to get their message out and build trust.

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“Manufacturers and companies have to drive circular economy transition. However, this is not possible without consumer participation,” said Luca Crisciotti, DNV’s CEO of supply chain and product assurance. “Thus, more must be done to fill the information gap, ensure that consumer awareness is priority and provide validated, trusted information.”

Behavioral patterns, upbringing and purchasing power play a role in the degree to which consumers lean into the circular economy, but brands and retailers’ efforts appear to be moving the needle. Circular fashion products are visible, with 67.7 percent of consumers surveyed confirming they have seen a circular product in store or online.

Products with recycled properties are a priority for 48.1 percent of the respondents, and 62.9 percent said they prefer to buy less or opt for secondhand products. Those above 55 years of age do more repairs than their younger counterparts, while the younger respondents tend to buy more secondhand and rent instead of owning. The survey echos CGS data from June 2021 that showed Gen Z consumers are five times more likely than Baby Boomers to frequent secondhand sites like ThredUp or eBay.

Though style and price continue to weigh heavily on purchasing decisions, price is especially relevant for younger consumers, which DNV said could be linked to their purchasing power. Besides cost, several factors influence consumers when deciding on whether to buy circular fashion products. Information on a product’s ecological footprint is important to nearly half of the respondents, closely followed by working and labor conditions, quality of the product, and certifications, verified labels and validated sustainability claims.

“Consumers tend to focus most on aspects of circularity that are closest in proximity and main issues of concern in a person’s daily life,” the report said.

Most respondents, however, believe companies and brands should take responsibility for a product’s recyclability and end of life as well as being more innovative—and many are willing to back this up with their spending. About 21 percent of respondents said they believe boycotts and advocacy can work, which DNV said “could represent a risk for companies that do not improve and communicate their contribution to circularity.”