Mastering the Circular Economy in Retail

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Savvy retailers and brands already have a strategy to respond to the ongoing climate crisis. Join Shelley and Rebekah Matheny, an expert in sustainable design at The Ohio State University, as they discuss the implications of consumers’ impact on the planet. They cover sustainable solutions by making incremental changes despite the popularity of fast fashion and excessive consumerism. With circularity in mind, retailers should rethink store design and product life cycles, from raw materials sourcing to post-consumer reuse and recycling. While some brands, like Zara, are starting small by launching second-hand services, a more systemic change is needed. Gen Z and the Alphas can spot greenwashing a mile away and their priority for authentic sustainability may be just the catalyst for a viable circular economy in retail.

Special Guests

Rebekah L. Matheny, NCIDQ, IIDA

Associate Professor | Interior Design | Department of Design and Founder & Director |  REBEL Sustainable Futures Lab

Transcript by Descript:

The system that we have set in place, this constant consumption, is not sustainable. You know, we are living in a consumptogenic society.  and it’s, it isn’t sustainable for our wallets. It’s not sustainable for the overall economy. It’s not sustainable for our planet.  It just all around. It’s not so we need a societal shift to be beneficial to everybody and the planet.

Retail Unwrapped is a weekly podcast hosted by Shelley Kohan from the Robin Report. Each episode dives into the latest trends and developments in the retail industry. Join them as they discuss interesting topics and interview industry leaders, keeping you in the loop with everything retail.

Hi everybody. And thanks for joining our weekly podcast. I’m Shelley Kohan, and I’m very excited to welcome Rebekah Matheny, who is associate professor of, for Interior Design Department, and also works at Department of Design at The Ohio State University. And you also are the founder of and director of REBEL, the Sustainable Futures Lab.

So your entire world revolves around sustainable practices. For the creative industries and my whole world is the business and retail side of the creative industry. So this’ll be a really fun conversation. Rebekah, I am so thrilled to have you on Retail Unwrapped, and we’re going to be discussing sustainability and circularity.

So let’s jump right in and welcome to the podcast. Thank you so much, Shelley. I’m glad to be here and I’m. You know, I feel like we’re the balance to the yang to the yang in this conversation. So, I’m really excited to be here and dive into this topic with you. Excellent. So, so my first question is, I mean, we’ve been talking about sustainability in the industry for a long, long time.

What is the, why is it so critical now that we really have to start actioning on sustainability?  Well, I think we see there’s this climate crisis around us. It’s You know, it’s been talked about for a while, we’re starting to see it, you know, making its way into policy change, particularly in the European Union and other places around the world.

We’re starting to see it as a big point of,  change here in the United States as well. And so what I find really fascinating is that as, as historians are starting to look back on different geological eras, this era that we’re living in right now is called the Anthropocene, which is defined as the It’s time where humans impact on the planet is what people in the future will be able to see.

So there are, they’re uncovering now even artifacts,  where our, our waste is embedded in the natural system, like rocks that have plastics embedded. We’re seeing, you know, microplastics is a big topic in the news. So we’re seeing that what we’re doing is leaving a lasting impact on the planet. So we really are in this critical moment where things are going to need to really radically change,  societally,  in order to, you know, create a planet that is more sustainable and that can be, be here for our generations to come.  And it’s, it’s so important and it’s interesting because, you know, when we look at kind of the fashion world, We keep anticipating this slow fashion, you know, and this move to, you know, buy less things, but I just keep looking at those revenues for companies like Zara and H& M and, you know, other fashion houses.

And, you know, at what point will this obsessive consumerism change?  You know, I think it’s it’s hard because the demand is there. The desire from the consumer is there. We’re going to get a little bit into sort of consumer behaviors, I think, as well and generational shifts. But I think what’s interesting is that,  it’s hard to change a system.

You know, when we think about these fast fashion brands that were founded, like, you know, Zara and H& M and Shein and Timu, these brands that have been ground up, built,  with their systems in place to produce quickly, you know, it wasn’t always this way. Even just a few decades ago, the fashion industry had, you know, season collections that shifted.

Consumers bought back to school clothes and that’s what you bought for the whole year. And now it’s turned into this really fast pace, you know, and I think it’s driven primarily by, you know, the technology, the instant gratification, this desire for what’s new and next constantly being, you know, put into our faces as consumers through our social media platforms.

But I think we’re starting to see there is a shift in the generation’s desires.  But we’re also starting to see a slow shift and even some of the fast fashion brands, you know, there have been leaders in the slow fashion brand, like Stella McCartney, Patagonia,  Everlane,  Eileen Fisher to say a few of the U S brands.

But there’s a few things happening. In fact, I just read this week that Zara is launching a second hand service initiative that’ll launch in the U S in October. So just next month, where they’re going to take things back now. They need to, you know, that’s a step. I have to ask because, you know, it’s kind of funny because part of the reason that,  czars is so successful is because they have this, you know, constant new things and the quality’s not there.

So I don’t know how a quality of a czar item is going to live long enough to see secondhand.  I’m wondering if it’s partially also going to be those products where people do the try ons, they buy a lot of product and they send it back.  will that be second hand? maybe it’s only worn once because some of these products, I agree, do not have the Product longevity built into them with durability,  to do that.

So it’ll be interesting to watch. I think it’s a, it’s a baby step that we should observe and see what happens. You know, other brands like H and M and, Madewell have done this sort of denim take back moments as well. So again, those are baby steps, but, you know, it really is going to take A big systematic change when we look at circularity and product longevity, from the ground up in some of these corporations or sort of shutting down of what they’re doing and starting afresh.

It’s so true. And I want to go back to something you said, you mentioned about the seasonality of fashion and you know, when I was growing up in the industry, you know, you had four seasons, that was it. Maybe five if count resort right now you have what we call these micro seasons.  Not only is it, you know, you’re going from four or five big collections, you’re going to, you know, 12, 14, 15 collections a year.

And it’s really taxing the creativity of the designers, but also, you know, from a sustainability and circularity standpoint, it has made a big impact on that as well. Not a good impact, obviously. Yeah. Honestly, the, the system that we have set in place, this constant consumption,  Is not sustainable. You know, we are living in a consumptive genic society.

And it’s, it isn’t sustainable for our wallets. It’s not sustainable for the overall economy. It’s not sustainable for our planet.  it just all around. It’s not. So we need a societal shift. yeah. To be beneficial to everybody and the planet for sure. And listen, we got to change the mindset of the industry, and that’s easier said than done.

But from we really have started thinking about instead of just sustainability, which to me has kind of like an ending to circularity. So how can we do this? And perhaps you can tell us or talk to us about how do you move from a sustainable mindset to more of a circularity mindset? And maybe even touch upon what’s the difference from a brand and consumer perspective between sustainability and circularity.

Right. Well, I think we have to start sort of  fresh with the definitions of the two. And so when we think about sustainability, most people immediately default to the environmental impact.  but when we think about the broad term of sustainability, it is about sustaining,  The three pillars, which is society, economy, and the environment.

And one facet of that is reinventing systems like the circular economy or circularity  within the practice of our sustainability. And so when we think about us as consumers,  we typically have a linear process, which we’ve been talking about, where you purchase a product, you wear it once, 10 times and it ends up in the waste spend or it ends up in good, you know, a goodwill or a thrift shop, a secondhand shop, potentially getting another life or getting shipped to another country,  and being burned even in the manufacturing process where the waste is being burned, et cetera, and that’s not good for the environment.

So that’s that sort of linear process. When we think about the circular,  that in practice really is striving to optimize our resources and minimize our waste across the entire. Production from consumption to, you know, from manufacturing and even raw materials. and then thinking about the sustainability component of it.

How are we when we look at the manufacturing plant? is it a healthy work environment? Are the people that are employed there, getting a fair wage? What is the transportation of those materials, or products to the warehouse? How long is it traveling? What is the carbon emissions? So there’s these.

It’s a very in depth focus on the entire and even going back to where’s the raw material coming from? Is it petroleum based? Is it natural based? How are the farmers being treated to? And then we look at the product purchase and that point of purchase. Then what happens to the product afterwards? And then how does that circle back?

And at what point into that entire? Length does the circularity occur? Does it go back to a raw material because it’s being composted or is it being recycled into a new material at a different point in the, the, the system or is it being resold or, you know, some manufacturers or some brands do things like over dying or repair and how does that work in?

And then I think that’s going to be really interesting because as we’re talking about the retail space, How does that change the way we approach the retail store and it’s, environment that we’re creating. And I think this all starts,  with understanding our consumers too. We talked a little bit about that, but, I was reading something, just this week and trend Bible, which is a UK trend forecasting,  company.

They were talking about Gen Z. And I think when we think of Gen Z, at least I typically think of, okay, Gen Z is my current students, but really as they’ve. Matured into their late twenties, early thirties now,  you know, they’re at a point where they’re buying their first home. They’re having their first kids, or millennials slightly older than them have delayed that process as well.

And they’re doing the same thing. And so they’re at a point where, you know, trim Bible was talking about how that generation is now looking to invest in products. with longevity, durability that can be reused for multiple generations of their kids that are adaptable, like, furniture items, that can grow with or clothing even be designed to grow with.

And then how can they contribute then to even resale or participate in rental? So it was really fascinating. I think that even goes back to research because there was a 2022 study of Gen Z. And they said that they are more likely to participate in the circular economy as well as,  they, they see ownership of product, not as owning, but being part of a participation.

So renting as one example,  so that’s something too, when we’re thinking. And about the circularity,  it might not be about owning a product. It might be about renting or sharing or resaling, things of that nature. Right. And listen, wait till you meet Jen alpha. So Jen alpha enters the workforce next year and they’re going to, you know, as soon as they start working, they become a bigger and bigger of that consumer purchasing and the statistics I’ve read.

40, 40, 40 percent of gen alpha wants to buy from companies that are doing the right thing. And that includes being good to the earth. So, but I believe today’s consumer, I think they’re kind of on board with sustainability. I still have my doubts about, you know, putting that sign of being on board, you know, psychologically putting that into action of purchasing, but do you think that consumer understands circularity?

I don’t know if they understand it in the term circularity. I think they have the concept of reduce, reuse, recycle.  you know, we even think back to like, I was taught that process back in like, you know, Sesame Street as a kid. Right. And Bob the Builder. My kids learn it in Bob the Builder. Yeah. So it’s kind of ingrained into like Their, you know, societal conversation as a kid, even,  and that’s what we’re seeing with Gen Alpha, actually, as we talk about them, they’re influencing,  their parents purchase, just like we were kind of thinking about the Gen Z parents buying for their kids that we’re Or just newborns or things of that nature, but Gen Alpha children are influencing their millennial parents purchase or Gen Z are influencing their Gen X and boomer parent behaviors.

And they’re, we’re seeing those behaviors changing. And so as the idea of circularity. Might not be conversational. they do understand the idea of thrifting, for example. You know, I think that goes back to why is Zara doing a resale? Because Gen Z and Gen Alpha are all about the thrift and they’re going in.

And that’s why we’re seeing fashion from the nineties and the aughts coming in to play, you know, with these generations, because that’s what they’re finding. I, I. Was listening to a student talk about a brand that I didn’t even know it still existed that I was buying when I was in college, and it’s like, where did you find this?

And they’re like, Oh, I bought it at the thrift store. I don’t know what the brand is, but I bought it there and it’s so cool. So now I’m looking for that brand again. I was like, well, that’s really interesting from a brand standpoint, because there’s brands that might have a resurgence.  To participate in this process.

So I think that there’s an awareness, but maybe not in that term. And I think that’s where we can start to do some educational work.  Rebekah, do you know why I love thrifting? Why? Well, because my two sons who love to go thrifting, they’ll come home and they’ll say, Hey mom, I bought these jeans for 15. So it makes me happy because they didn’t really actually buy the jeans.

I bought the jeans. So I’m loving thrifting. Yes. It’s, it’s helping us, you know, with our wallets and especially, I think that’s what’s true. Driving it. You know, these generations are hit economically. You know, we talked about delaying their home purchase. They’re delaying having kids because of financial strain.

And so that is also impacting, where and how they’re consuming. And so that’s something our brands should start taking into consideration within their stores as well. How can they start designing and services or offerings,  to allow students, you know, students, I say students, but Gen Z,  to participate in different ways to enter the economy, to enter into consumption, quote unquote,  in multiple different ways.

Yeah. And I love a quote. Can I call you, even though you’re here?  I love how you, you know, you said, you know, the ROI, it’s more than just revenue, it’s brand loyalty. 100%. And I think, you know, the generations have said over and over these younger generations that, you know, If you aren’t authentic, transparent and mirror my values, I will take my purchase power elsewhere.

I have limited funds and I’m going to put that, I’m going to speak my values with my pocket. And that’s right. Best in brands.  I think when we talk about ROI, that’s really going to be part of changing the conversation in industry as well, because it might not be about the quantity of products you sell, because if we’re trying to,  limit our resources, how much we’re actually manufacturing, it might be about creating products that last longer.

That then consumers are coming back for repair of that product, you know, and even as we see legislation happening, there’s the right to repair in some areas. I love that. So how do we build that into the store experience and create it as a service offering that creates loyalty, that creates return consumers to the store itself?

You know, so I think. I think we have to rethink and redefine actually what the brick and mortar store is doing and how we measure,  the ROI. It might not be on the quantity of products sold, but the attachment of the person to the brand and their return to the space. In other words, I mean, and you know, how can brands really leverage store design and the whole retail experience to really communicate their commitment to sustainability?

I mean, are there touch points out there? You know, how do you craft that narrative that actually influences consumers behavior in the moment?  I think this is extremely important.  you know, there is a, there was a study done in 2020 that said that Gen Z consumers again, demand office authenticity. And we see new brands over the last five, 10 years being founded on that principle.

Principle of radical transparency.  but it needs to translate to the retail store. And that study showed that that authentic retail storytelling of both environmental and social consciousness,  and operational transparency is really important to them. And I think that goes back to the technology while, you know, the greenwashing is sort of something that’s in conversation,  It’s hard for consumers to filter through the noise.

There’s so much being put out to them and so many ways in which they’re getting information that it’s hard to distill, you know, truth from fact.  and so, you know, another study that was done in 2022,  showed that both slow and fast fashion consumers are equally ignorant about a brand sustainability practice.

And I think that has to do with how they’re communicating. Oftentimes brands. Focus on the product and it’s sustainable story, and maybe that story is on the website somewhere, but it might be hard to find and so you have to go to that, but it’s not communicated in store where someone is making the point of purchase.

So if we look at the environment of the store. As a blank canvas for education, then we can start to talk about all those different touch points, whether it’s a physical service touch point, like a repair shop,  I was just in,  Brooklyn at the Veja store and they have a repair shop there, but the rest of the store is still a pretty like museum quality blank canvas.

And there’s a lot of opportunities to sort of integrate more storytelling Into the environment. another good example is the coach Topia story. and how it’s sort of a shop and shop experience inside the coach Soho store, where there is a customization space in the back and a repair or refresh space, because we think about coach and the longevity of, you know, people thrifting their coach bags and wanting them to get renewed and have a new life to them.

But then you think of like the coach Topia. Shop and shop experience all the materials that surround that have their own story to them made from scrap. And so there’s QR codes that communicate it. And so you can drive customers then from the product where they’re looking at it and touching it. And it’s tangible to the website to get more education and information about what’s actually happening.

And that’s where you can tell a bigger story about the initiative. and so I think there’s so many layers,  From digital to physical to human, within the experience, that’s really important. And I think sometimes we, we don’t,  really even think about the human inside the store as a brand ambassador of that story too.

I love it. Oh my gosh, that’s great. And I know another topic that’s near and dear to your heart is, You know, design thinking. And so tell us how design thinking can really help formulate process or integration of sustainable thinking into the design and brand process. You know, what are some of the critical questions designers and brands should be asking to really foster innovation in their projects and products and can you share with our listeners any theoretical or practical advice? 

Well, I think what’s great about the design thinking process is that it is circular. It is not something that is linear. We as designers think in this iterative design. In methodology, and so there’s constant,  inquisition and moments where we can take that reflection and circle back to reconceive to make it better.

And so the parallel between a circular design,  of a product and store experience and the consumer behaviors to the circularity of our own design thinking process is there. So we have to start connecting those dots. And so as we start to think about, well. If we’re using that, then we can start to look at that linear consumer process and say, okay, where can we create opportunities in the process and ask the right questions to then create something new, to be truly innovative, to push things forward in the designing of it.

And I think that’s really the start of it. And as we start asking the questions, one, we have to come from. A human and planet living centered point of view. So the first step of design thinking is empathize. And so I think it’s really important that we start there because it allows us to say, well, if we’re being empathetic, then when we go to the brand and we look at the consumer, it’s not just the target consumer, but how do we create equity?

Is there population that’s not able to reach this product and that brings in the economic pillar of sustainability or pay for it. It’s the cost too.  I mean, I mean, there’s a lot of, you know, economic factors that pull in, you know, some customers, they want to be sustainable, but, you know, they’re buying products at Timu and she and because quite frankly, they can’t afford not to write or they physically don’t have access to it because there is right near them.

So that starts. The conversation to say, well, is there an interesting way for us to bring our sustainable products to people in a different way? Is there a way to reach them in a different way to educate them in different ways? And so it really is starting at the very beginning with even identifying the customer reach and starting from a human centered.

Standpoint and then breaching into what they’re referring to now, not just beyond, not just the human centered aspect, but the living centered aspect and where do we then marry the the environmental pieces of it to,  and so I think that’s the start of it. And. We have to be bold in our questions,  and as the designers, if you’re on the agency side, you know, trying to ask these questions early on,  even digging in and saying, okay, well, I, I realized you have a sustainability officer at your brand.

What are they doing? What are the stories you’re trying to tell? What are you doing with your products? Okay. Well then how can we incorporate that into our consumer life site cycle? Where can that enter the store conversation? How can we communicate that through our material selection? So it’s this entire idea of storytelling, but storytelling starts with questions at the very beginning when you’re creating those relationships.

I love it. Oh my gosh. It was so much fun having on the podcast. I can’t believe how time flies.  any closing thoughts that you want to add before we have to end our podcast today?  Oh gosh.  I think, I hope this is just the start of the conversation for many people out there. I hope it just sparks your own passion to reach out and make bridges.

If you’re sitting in the C suite, go talk to the sustainability officer. Talk to your agency. If you’re the agency,  be bold in the questions that you’re asking. It never hurts.  you know, to take that first step. I love that. I love it. Thank you so much. and thank you so much for being here. It was great having you on.

I want to thank our great listeners. for listening. Please, if you have feedback, you can go to the robin report. com under contact us and leave us feedback. We’d love to hear from you. And again, Rebekah, thank you so much for being here.  My pleasure. Thanks for having me.  Thank you for listening to Retail Unwrapped.

We’ll be back in one week with another podcast.  Please subscribe on Apple Podcasts, Spotify, or any podcast service. If you have questions, ideas for a podcast or anything else, please contact us via the robinreport.com.

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