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By Ellen Hind RiseResale of By Ellen Hind Figure 1, Patou campaign photo Executive Summary Introduction Methodology Literature Review Page 7 Questionnaire Macro Trends The Circular Economy Page 10 The Rise of Second Hand Charity Retail Market Current digital platforms Page 17 Analysis of Primary Research Consumer Perception Market Analysis Consumer Analysis Summary Impact of Covid Impact on second hand Page 28 Impact on Charity Retail Improving Customer Experience Case Study: Thred Up Contents Page 32 Case Study: Zeekit Case Study: Audi Case Study: Thrift + Proposed Innovation Vision for the Future Page 42 Operating model illustration The Journey to the Vision Building consumer reach Conclusion Appendix Reference List Bibliography Figure 2, Vogue street style photo 1 Executive Summary This report explores the opportunity for desire for respondents to shop sustainably charities to help build an effective circular but highlighted a number of barriers. economy within the fashion industry. Further research assessed how others are Consumers are increasingly focused on innovating to improve customer experience sustainability and are very aware of the and also promote the circular economy. negative impacts of the fashion industry. As Four case studies are presented - Thred Up, a result, they are progressively moving away Zeekit, Audi and Thrift +. There are a number from fast fashion towards a more conscious of learnings regarding the use of technology, form of shopping. the ability to offer a compelling customer experience and the blurring of lines between The second-hand clothing market is growing online and physical shopping that could be fast and is estimated to be worth $51 billion adopted by the charitable sector. globally by 2023 (Smits & Cunningham, 2020). This is a big opportunity for the charitable Charity retail should act quickly to realise this sector to play its part in promoting these opportunity before other competitors in the positive objectives and raise vital funds for second hand market dominate the space. good causes. Currently, the charity sector New models could be adopted, including in the UK has a limited online offering while collaborations. One such potential UK partner retailers are increasingly operating and could be ethically-minded Thrift +, which has innovating online to enhance the customer an established online platform and distribution experience. Now is the time for charities to infrastructure. A partnership with a charity capture this market and tap into the ethical with physical stores could put Thrift + on the zeitgeist. High Street and the charity online, with all the Definitions logistics already built in. The research method used included a Second Hand: Consumption of all used apparel. Includes both the Resale literature review and primary research via This could act as a major focal point both for sector and the Thrift and Donation sector an online consumer questionnaire. This consumers and fashion brands to build a real focused on second hand clothing shopping circular economy. This will be significantly and user’s perceptions of charity shops. The more effective than an individual organisational Resale: A sector of the broader ‘secondhand’ market that includes more literature review highlighted the social and approach and will enable charities to play a curated product assortments, often well merchandised and/or higher end cultural trends towards a circular economy very valuable role in reshaping and reforming and the rise of the second hand. The primary the fashion industry for the good of society Thrift: A sector of the broader ‘secondhand’ market that includes research supported this analysis with the overall. traditional options such as Goodwill, Salvation Army, and yard sales Defintions from ThredUp report (ThredUp, 2019) 2 3 Introduction Figure 5 and 6, Vogue street style photo “Only 1% of textiles produced for clothing are recycled into new clothes” (Ellen MacArthur, 2017) Within the last decade, technology has Ltd, 2020). After a net decline in 2017 (Lepper, transformed the fashion industry to increase 2018), charity shops now occupy 7.76% of productivity, efficiency and creativity the High Street (Statista, 2019) with average (Todeschini, Cortimiglia and de Medeiros, sales per week per store of £2,500 within the 2020). However, the innovation stops at last 3 months of 2019 (Cooney, 2020). recycling and reusing clothes. “Only 1% of textiles produced for clothing are recycled However, as Coronavirus shuts down the into new clothes” (Ellen MacArthur, 2017). High Street, charity shops must quickly adapt The absence of an effective recycling strategy to navigate and prosper in this new climate. is causing a significant negative impact both environmentally and financially (British The primary aim of this report is to investigate Fashion Council, 2019), with more than the motivations and barriers of second- $100 billion lost annually (Ellen MacArthur, hand shopping and how those barriers can 2017). The economic loss coupled with the be overcome. It will also look at the circular environmental impact highlights the need for economy business model and how that is the fashion industry to establish strategies to being used within the fashion industry to reuse and recycle clothing. promote sustainability. The role of charity shops is critical to this This report will be underpinned with theory development. Charity shops have been an attained from academic journals, core texts, integral part of the British High Street since wider reading, industry periodicals and will Figure 4, Vogue street style photo the 19th Century (Our History: Shops and incorporate both primary and secondary Recycling | Salvation Army Trading Company research. 4 5 Methodology The research generated for this report involved two key phases, a systemic literature review and an online questionnaire. Figure 7, Vogue street style photo 6 7 Figure 8,9 & 10, Vogue street style photo Literature Review A systemic literature review was selected to limit Figure 11, Vogue street style photo the possibility of error in addition to improving its reliability and accuracy (Mulrow,1994). Using Tranfield’s process for a systemic literature review Questionnaire (Transfield et al, 2003), the following five steps were taken: (a) defining the research objective - “how can To compliment the secondary research, an 135 respondants completed the questionnaire charity shops innovate their business models to suit online questionnaire was carried out, which (Female: 113, Male: 22). The most dominant a changing consumer?” proved the most effective way of obtaining consumer for platforms such as Thrift + are (b) selecting appropriate platforms to acquire data during the Covid-19 lockdown. women (Metcalfe, 2020) so catering to them relevant research - Webcat, Delphis, Science Direct would be a more effective way of widening and Research Gate A questionnaire can be effective in measuring consumer reach. The results are presented in (c) pairing selected keywords in order to locate behaviour, attitudes and preferences from a Section 4.0: An Analysis of The Charity Retail relevant research to the primary aim - large group of people in a time efficient manner Market. circular economy, secondhand fashion and charity (McLeod, 2018). Participants can complete shops were paired with sustainability, innovation the questionnaire in their own time, which The results were split and analysed into three and motivations means the answers are well thought out and main age groups: Generation Z, Generation (d) selecting the most relevant articles - 40 articles accurate. The downside is participants can Y and Baby Booomers. The definitions and were selected from an initial search of over 200 lie about their answers to portray a positive drivers for each generation can be seen in (e) extraction of relevant quotes and information. image of themselves (Dudovskiy, 2020) or not Appendix 2. complete the questionnaire at all. This critical exploration ensures that insignificant research can be separated from pertinent studies. To ensure a broad mix of both qualitative and A thorough literature review aims to reduce bias and quantitative data many types of questions improve the reliability of the report (Mulrow, 1994). were posed. See Appendix 1 for table of questions. 8 9 Macro Trends Influencing Fashion Figure 12, Vogue street style photo 10 11 closed loops of products, product parts, and materials” (Morseletto, 2019). In a fashion context, a CE focuses on extending the life cycle of textile and clothing products through reuse, recondition, repair and recycle (Stahel,1994). The aim of a CE is for products to circulate within society with maximum usage and little to none environmental effect (Jacometti, 2019; Rathinamoorthy, 2019). As well as improving sustainability, the circular economy model recognises the importance of socioeconomic benefits. At the moment, the fashion industry is currently responsible for £82 million worth of clothing ending up in landfill each year in the UK alone (Tickell and Williams, 2018; Ellen MacArthur; 2017). In order to successfully implement a CE, the key principles of value creation and retention must be recognised and implemented at Figure 13, Vogue street style photo all levels of a company, including the micro aspects of business functions. The concept of value is critical to achieving a full understanding of CE Circular (Kant Hvass and Pedersen, 2018; Rathinamoorthy, 2019; Wells, 2013; Economy Hofmann, 2019). Within the CE model, there are Today’s
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