In today’s fast-paced world, amidst a cost of living crunch and a concern for the environment, there’s an increasing appetite to repair, reuse, and recycle our cherished belongings – from clothes, homewares and electronics, furniture, and everything in between.
According to Roy Morgan, 12.2 million Australians are buying second-hand items and 9.3 million are selling items online instead of sending them to landfill. This is part of a global phenomenon called recommerce which, coupled with government legislation is fast becoming a fully-fledged part of retailers’ business models.
With the likes of Veja Cobblers offering repairs for shoes of any brand, to RE.UNIQLO Studio’s Japanese embroidery service that breathes new life into old garments, to the innovative collaborations like Schuh x Vintage Thread— the allure of repaired and upcycled fashion is reaching promising new heights.
Locally, RM Williams is long renowned for its commitment to quality boot repairs, to MJ Bale offering a second pair of pants to extend the life of a suit jacket or Nudie Jeans (whilst technically not Australian) offering free repairs for the life of the jeans.
Beyond clothing and footwear, through programs like Amazon Renewed and Reselfridges, retailers are repairing, refurbishing, repackaging and reselling products with warrantees to create both environmental and financial benefits.
Even retailers without repair and refurbishing initiatives are involving charities in their returns processes to accelerate circular economy outcomes and reduce the cost of returns.
It’s a movement not just about environmentalism but a rejection of the notion that newer is always better and Australia is already following suit. In the current cost of living crunch, the appeal of reduced expenditure is also playing a key role.
Responding to the growing demand for pre-loved goods, we’re seeing an emergence of circular retailing in Australia.
David Jones has partnered with Reloop, GlamCorner and Blue Spinach to help shoppers buy and sell pre-loved premium fashion. Whilst THE ICONIC has partnered with AirRobe to join the circular fashion movement.
Meanwhile, IKEA’s As-is market remains a popular option to give second-hand furniture new life.
Overseas, governments are stepping in to support this shift, with the French government subsidising repair costs and the Right to Repair coalition advocating for EU regulations that encourage manufacturers to make repairs more accessible.
Retailers have a responsibility to not only embrace this change but to champion it. And it makes financial sense to do so.
Though circular business models are still in their infancy, they have already demonstrated tremendous potential for increasing efficiency and profitability while reducing the environmental costs to the planet.
Every year in Australia, $2.5 billion of unsold household goods are wasted and sent to landfill. It’s a daunting statistic but presents significant opportunity.
We must move towards a model where these goods are automatically re-sold and re-used or donated to charities.
The Australian Retailers Association has partnered with Good360 Australia to support this, with Good360 so far connecting 40 million goods to people in need and injecting $436 million worth of unsold goods into the circular economy.
The charity has prevented more than 6,800 tonnes of goods from going to landfill and lays a fantastic blueprint for retailers looking to be circular.
Of course, the scope to embrace the circular economy requires the infrastructure to support it, particularly in Australia where we don’t have the same economies of scale as our overseas counterparts.
For the circular economy to succeed, it requires collaboration and ‘skin in the game’ from retailers, suppliers and manufacturers, consumers, and — importantly — governments.
While we acknowledge the initial work of the Circular Economy Ministerial Advisory Group and the $23 million allocated to the circular economy in the Federal Budget, we need the government to do more than fund the design of frameworks and governance mechanisms.
We need funding from governments at all levels to incentivise investment in circular economy infrastructure and business models. It’s not enough to simply legislate or think-tank the problem away. We need the government to come on board as a key stakeholder and co-invest in recycling infrastructure and de-risk the mainstream adoption of circular packaging, products and offerings.
Matt Davis, CEO of ARA member the Salvos Stores, recently said the transition to a circular economy is not yet a team sport. I agree. This transition will be a complex, collaborative effort that will be more evolution than revolution.
Demonising business can’t be part of the solution though. Our sector is moving but the challenges that compel us to act are societal challenges that require communities, governments and businesses to work together.
The good news though is that the change is already underway.
At its core, the circular economy is about more than just environmental sustainability — it’s about imbuing and transforming the act of repair and reuse into an act of love and appreciation. We’re witnessing a shift from a disposable culture to one that values longevity, craftsmanship, and the beauty of imperfection.
Paul Zahra is the chief executive of the Australian Retailers Association.
Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on LinkedIn.
