Disruption for Good

September 12, 2019

There are two sides to every story. When there are seismic shifts in an industry, some companies move forward, disrupt, and thrive while others stand still and are disrupted. Often, it’s the new eating the old, pulling customers away from businesses that we thought were untouchable.

The obvious example is Amazon. After reading a report about the future of the Internet that projected annual web commerce growth at 2,300%, Jeff Bezos decided that his new business would sell books online. In 1998, Amazon moved beyond books and now virtually everything can be found there. By the end of 2018, eMarketer predicted Amazon would own 49.1 percent of all online retail spend in the US, and 5 percent of all retail sales.

Napster began music sharing in 2000 and in the 15 years following, music sales dropped in value by 40%. Powerhouse companies like EMI and Virgin Megastore disappeared. Music moved from a model primarily based on CD album sales to a digital streaming.

Uber to transportation, AirBnB to hospitality, Expedia and Kayak to travel — the list is long. On both sides, the disruptor and the disrupted were confronted with choices about where to put their time and resources. Choices like doubling down on the current strategy or investing in something new. These are the hardest kinds of decisions businesses have to make. They are even more challenging because the signs that it’s time to change may not show up until it’s too late to act.This is especially true when things are going well enough or growing just enough to keep businesses satisfied.

For apparel, ecommerce itself was the last massive disruption that transformed the industry. More recently, subscription services and rentals are showing that consumers are open to new innovations. The question to brands is what’s next? What will you regret not starting on today?

The answer is Circular

There are several signs which point to Circular Business as the next great disruptor in apparel.

Let’s start with the global one — the environment. The apparel industry and textile manufacturing are highly dependent on environmental conditions — whether we acknowledge this or not. The Climate Crisis will bring this into crushing focus for businesses that choose to ignore the connection. Consider these facts:

  • The world’s leading climate scientists through the IPCC Report have warned there are only a dozen years for global warming to be kept to a maximum of 1.5C, beyond which even half a degree will significantly worsen the risks associated with environmental devastation.At the current level of commitments, the world is on course for a disastrous 3C of warming.
  • The apparel and footwear industries together accounted for more than 8 percent of global climate impacts — the equivalent of 3,990 million metric tons of carbon dioxide in 2016.
  • Total greenhouse gas emissions related to textiles production are equal to 1.2 billion tons annually — more than those of all international flights and maritime shipping trips combined, according to the Ellen MacArthur Foundation.
  • The Carbon Disclosure Project noted that consumer-facing brands, are at risk not just from climate change but water scarcity and deforestation too, have a unique role to play in driving forward the sustainable economic transition.

Consumers are more and more aware of the negative environmental impact created by the current approach to apparel and textile manufacturing. They expect action and are willing to do their part:

  • The 2017 Cone Communications CSR Study reported that consumers felt companies had a role to play in social justice concerns facing the United States today, 76% cited climate change as an issue companies needed to address
  • In a recent customer survey conducted by The Renewal Workshop, 83% of consumers identified the apparel industry as having a significant negative impact on climate change. And 93% said they were extremely or very likely to buy a product if it is more environmentally friendly.
  • In 2015, Nielsen polled 30,000 consumers in 60 countries and one overwhelming conclusion was that across the board, consumers are willing to pay extra for one thing: sustainability.

In addition to the environment, the other driver towards circular is that the market is ready for a new way of buying and using apparel. Recommerce isn’t a fad. It’s a viable business model with a growing, active market:

  • The resale market is expected to outpace fast fashion within 10 years, according to the Business of Fashion’s 2019 report on The State of Fashion.
  • One-third of consumers polled by ThredUp said they would spend more with their favorite retailers if those retailers also sold secondhand apparel.
  • 51% of consumers plan to spend more on secondhand in the next 5 years.

Combine the ethical factors of negative environmental impacts with growing consumer sentiment and the growth trends in the resale market and the innovation at the center of all three is Circular.

The Renewal Workshop has partnered with 20+ major brands to demonstrate how the apparel industry can be disrupted for the good of the planet, the customer, and the business. We thrive through a mutual commitment to a sustainable, circular model that offers customers and brands an impactful recommerce experience. This positive disruption of our industry will move us all forward so long as we take notice of the signs and, more critically, take action.

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