Today, the fashion supply chain and its infrastructure are designed for a one-way flow of products. For circular business models to work, it must be transformed into a supply network capable of circulating products locally as well as globally.
It needs to be economically and technically viable to keep products in circulation meaning they cannot readily be shipped around the world to be cleaned or repaired, to then be resold or redistributed. To effectively circulate products, services will need to be distributed, requiring effective collaboration by all industry actors.
Technology can be leveraged to improve multi-way collaboration and move away from one-directional transactions towards mutually beneficial partnerships. For instance, the rise of cloud computing has opened new avenues for collaborative work, allowing factories and fashion businesses to work together from many parts of the world at the same time. This enables them to access relevant data, making for a faster and more effective way of communicating.
Collaborating to build a distributed supply network
Circular business models provide an opportunity for products and their materials to remain at high value within the economy, but the current one-way supply chain does not facilitate this. Infrastructure for operations such as resale, rental, repair and remaking, which can require handling, sorting, cleaning, repackaging and redistribution, needs to be distributed for circular business models to reduce greenhouse gas emissions effectively.
This requires a diverse and highly connected, dynamic network based on mutually beneficial, local and global partnerships between all actors in the fashion system (e.g. manufacturers, retailers, end-users, and collectors).
The Restory
Examples of businesses putting this into practice
The Restory offers a shoe and handbag restoration service. It typically works with high-end fashion products and is expanding by partnering with retailers, allowing brands to offer after-care services to its customers (e.g. ‘Farfetch Fix’, Harvey Nichols). These partnerships are mutually beneficial.
EverybodyWorld is bridging the gap between customer, supplier and brand, by co-creating designs. Its unisex pair of shoes named ‘untitled’ is based on a crowdsourced design, made locally and comes with EverybodyWorld’s lifetime repairrepairOperation by which a faulty or broken product or component is returned back to a usable state to fulfil its intended use. policy.
Research institute HKRITA are developing a lab in Hong Kong where innovators, researchers, suppliers and brands can meet, test new ideas and scale faster.
Mobile app Sojo connects its users to local seamstress or tailoring businesses, picking up and delivering items by bicycle.
Leveraging technologies
Leveraging technologies to enable multi-way communication, tracking, and traceability will enable smooth exchanges between businesses and service providers to manage processes, such as collection, cleaning, repair, and distribution, needed to make circular business models work. This could include technologies such as artificial intelligence and blockchain and could allow businesses to more easily share information that facilitates circulation of products. This requires the development of collective business cases, effective data exchange, and transparency.
Examples of businesses putting this into practice
E-on has launched Circular ID, an industry-wide digital protocol that establishes the essential product and material data (e.g. materials, origin, authenticity, price, style and recycling instructions) to identify and manage products in a circular network. The digital identification of these fashion products can aid in the rental, resale and recycling of clothing and accessories.
Rental platform Hirestreet has partnered with reverse logisticsreverse logisticsSupply chains dedicated to the reverse flow of products and materials for the purpose of maintenance, repair, reuse, refurbishment, remanufacture, recycling, or regenerating natural systems. provider Advanced Clothing Solutions (ACS) to manage its warehousing and has developed its own white-label technology solution for rentals, Zoa, giving fashion brands the opportunity to add rental of their clothing as an option alongside buying. Brands provide the stock but Zoa takes care of all of the rental technology, cleaning, logistics, and customer service with an option to integrate with warehousing service by ACS.
Rental and resale logistics provider, Lizee helps brands and retailers extend the life of their products by launching, managing, and scaling rental and resale business models. Lizee handles the picking, packing, and shipping of products, and facilitation of payments, oversees quality checks for returned products, refurbishing, and more. In so doing, it provides its partners with product data related to use and quality, which they can then leverage to improve their product design.
Save Your Wardrobe is a tech-enabled wardrobe management platform that leverages online receipts, computer vision, and AI to digitise wardrobes. The platform provides an ecosystem of aftercare services including eco cleaning, repairs, alterations, and end of life services like donation to help users extend the life of their garments with ease.
What policymakers can do to support the development of a supply network
Governments can foster public-private collaboration to remove barriers for businesses that offer more localised, diversified, and distributed services, including repair, reuse, and remaking. They can also facilitate investments to develop the skills and infrastructures required to ensure an inclusive transition and to bridge the innovation gaps, paving the way towards a more resilient future that benefits all actors of the fashion supply network.
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Circular business models is available in: English
Four key actions for businesses
To make sure their business models are circular, and to maximise the positive outcomes, businesses, supported by policymakers, can take four key actions.
