Patagonia Leads Circular Fashion Study, But Brands Not Making Progress

When it comes to circular apparel, brands are not acting fast enough to make a difference in the race to a more sustainable approach for the fashion industry.  Consulting firm Kearney released results from a new study last week in which the average brand scored below 3 on a scale of 1 to 10.  According to the report, not only are brands not progressing their own advancements in circular fashion, but they are also failing when it comes to educating consumers about sustainable possibilities.

Multichannel Merchant spoke with Brian Ehrig, a partner in the consumer practice of Kearney and co-author of the firm’s 2023 Circular Fashion Index to find out why the industry is dragging its feet and what needs to change if we’re going to move the needle by 2028.

MULTICHANNEL MERCHANT: Circular fashion has been in many leading brands’ playbooks and part of our vernacular for the better part of the last decade, yet Kearney’s 2023 Circular Fashion Index tells us that the industry’s response to our current environmental crisis is lacking.  The average score of the 200 brands included in the 2023 index came in below 3 on a scale of 1 to 10.  Customer behavior data tells us that they are more actively supporting brands that support the circular model, so where is the disconnect between customer’s preferences and the industry?

EHRIG: There are some aspects of circularity, like resale, that have been around a long time.  And that’s kind of the easy part, but the part that is going to keep our clothing out the landfill is the much harder part.  Brands themselves need to take more responsibility for the collection of the material, similarly to the way beverage companies are taking responsibility for encourage the collection and recycling of bottles and cans, because that’s part of their closed loop.  Right now, most of what we have in apparel ends up going in a landfill or getting incinerated.  The collection aspect is huge.

The other important aspect of this conversation lies in the fact that most of the fashion world does not really have a true R&D budget.  Brands rely on third parties so, there is a need to knit together of an entire ecosystem and that’s really the part that’s missing.

MCM: Trove and OSF Digital recently unveiled their Brand Resale Index, where REI was the top performer.  Patagonia and The North Face come in at #1 and #3 in your index.  Why are these brands performing so well?  Is it how well the average active/outdoor customer aligns with the tenets of the circular fashion movement?  Or is it Patagonia’s ability to stay ahead of what their customers want?

EHRIG:  To start with, those kinds of products tend to be made with durability in mind, so there might be something in that, but there are also plenty of other outdoor brands who are not ranked.  The difference between the top performers and the bottom ones, is that the top ones are thinking about circularity as they are designing their products.  So, when making an outerwear jacket, Patagonia will ask themselves, “How easy would it be to repair this?  How easy to take care of it?  How are we going to educate the consumer on these things?”

If you go to Patagonia’s website, it will very clearly explain to you how to take care of your product.  For example, did you know that you need to wash your raincoat as it reactivates the waterproofing material?  A big part of it is just engaging with your community and starting with circularity in mind and thinking about the end of life at the beginning of life.

Brands will approach the seven different levers that you can pull slightly differently.  For the outdoor ones, it’s about repair, maintenance and resale.  Whereas fast fashion brands might be thinking about the collection aspects and taking that recycled fabric and turning it into new products.

MCM: The report also points to a recent Kearney Consumer Institute study that indicates that American, French, and Italian consumers and a bit behind the global curve in terms of knowing the sustainable possibilities and what to expect on this front from the fashion industry.  Do you have any insights as to why this might be the case?  And how do you think brands might be able to help close this knowledge gap?

EHRIG: It’s really interesting; in preparing this year’s report as we included more global companies that we did last year and interviewed people in different parts of the world.  One of the more enlightening comments that I received came from India, and when we were talking with them around their thoughts on circularity.  They told us that they simply do not throw things away, which really brings it back to first world problems.

In some of the richest countries around the world, it’s at our convenience to toss things and in other parts of the world they don’t do that. They don’t waste food and they don’t always clothing.  My hypothesis of why you see American, French, and Italian consumers on there is because we have a lot of money and our society is open to wasting more things.

MCM: The study points to score improvements from Levi’s and Patagonia that were achieved by the brands’ ability to promote and communicate around their circularity efforts.  Both of those brands have been mainstays in your index, so can you talk to the importance of communication to consumers and how this can be done carefully without stirring up any accusations of greenwashing?

EHRIG: We interviewed Patagonia for the report and on their site, they promoted these road shows where they show you how to take care of the things that you bought, how to do minor repairs, and basically better understand the product that you were buying from them.  It’s a great competitive differentiator because they’re not actually asking anyone to come in the store to buy something – although the customer likely will – but they’re sincerely offering to help the consumer understand how to really take care of things they have already bought.

For Levi’s, they have different sets of issues. Denim has other problems, historically there are a lot of chemicals and water usage in the manufacturing.  Levis have a lot of commitments and improvements how to eliminate the use of water and how to reduce the number of harsh chemicals.

MCM: It looks like a common thread amongst those brands that achieved the “Strongest Improved” recognition did so with the help of the right partnership, specifically mentioning Athleta and thredUp (resale-as-a-service) and Timberland with ReCircled (take-back service).  Can you share any insights you might have as to how brands considering investing in these efforts should approach finding the right partners and services that align with their goals?  Why would you choose a third party vs. handling this in-house?

EHRIG:  The biggest question seems to be whether the brand should choose to use a third party or build up their own internal capabilities in those areas.  We’ve looked into this quite extensively and between taking back individual units, assessing them, cleaning or repairing them, photographing them, putting them on the website and finding the copy and everything that needs to go with the resale of goods; it is an incredibly detailed oriented type of thing to do, and most companies are not set up for it and it’s very expensive.  This is a big reason why a lot of brands decide to go with partnerships for the back ends of these initiatives.

MCM: The tone of this report is one of almost stern disappointment in the industry, which is understandable given the results.  What needs to change so this report card reads differently in 2028?

EHRIG: Sustainability has to be a priority.  There are a lot of key drivers for sustainability efforts particularly for the fashion industry; first and foremost is human rights, then sustainable raw materials, and then climate change.  The circular fashion movement is just one part of a holistic strategy that really enables sustainability.

What we really need to see for improvement, is a bigger commitment to the efforts around collection of materials from items at the end of their life.  We also need to see that brands have the right connections to the recyclers, and the yarn spinners, and the fabric mills; all of that needs to come together.  If that happens, then perhaps in 2028 we’re telling a very different type of story.

In the fashion sector, there are a couple of different methods of recycling.  We mechanical recycling, where you physically take apart fabrics and break them down into fibers that can be used for other purposes of pillow stuffing or other uses.  This is a more traditional approach.  There is also a newer technique called chemical recycling, in which you use chemicals to separate out the different fibers.

Above all, all of these initiatives require economies of scale to become viable solutions.