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Covered in this report

This report discusses the circular economy as it relates to various retail categories. The circular economy differs from traditional, linear models of retail and refers to an alternative method of buying and selling goods, intended to extend the life cycle of products. It covers consumers’ attitudes, preferences and shopping behavior related to alternative methods of purchasing and owning products, including using rental services and reselling. In addition to retailers that exclusively operate rental or reseller models, this report will also discuss how other retailers, traditionally operating in linear retail methods, are entering into the circular economy.

"Circular retail options (eg rentals and reselling) aren’t just a trend; they’re a new way of shopping consumers will consider more often and for a wider variety of purchases. Although it’s difficult to determine the size of the circular market, one thing is certain; interest is high across many categories both in renting and resale. Pride of ownership is decreasing and giving way to more flexible options that are not only sustainable, but allow consumers to focus on experiences over goods, something that many view more valuable than owning or buying new. Expect to see more retailers enter the market, both on their own or through partnerships, and as retailer expansion continues, so will the types of products offered."

- Alexis DeSalva, Retail & Apparel Analyst

This Report looks at the following areas:

  • Pride of ownership is decreasing
  • Retailers need to offer frictionless circular shopping options
  • Consumers need reassurance they won’t forfeit quality for value or sustainability

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Market overview
          • Top takeaways
            • Pride of ownership is decreasing
              • Retailers need to offer frictionless circular shopping options
                • Consumers need reassurance they won’t forfeit quality for value or sustainability
                  • What’s next
                  • Market Perspective

                    • The circular market is growing in popularity and competition
                    • Category Interest

                      • High cross-category interest signals potential for the market to grow
                        • Figure 1: Category interest – NET any interest, December 2019
                      • Infrequently purchased items are the point of entry for the rental market
                        • Figure 2: Category interest, December 2019
                      • Thrifty nature of women piques interest in secondhand
                        • Figure 3: Category interest – NET any item, by gender and age range, December 2019
                      • Multicultural consumers’ dual interest in trends and savings, piques interest in rental and resale
                        • Figure 4: Category interest – NET any item, by race and Hispanic origin, December 2019
                    • Market Factors

                      • Mintel Consumer Driver – Value: Consumers continue to seek budget-friendly options
                        • Figure 5: Budgeting behaviors, Mintel Consumer Drivers Survey, July 2019
                      • Mintel Consumer Driver – Surroundings: Informed consumers prioritize sustainability to protect their environment
                        • Mintel Consumer Driver – Identity: The sharing nature of circular options appeals to community-driven consumers
                        • Key Players – What You Need to Know

                          • Partnerships allow retailers and consumers to explore circular options in a less risky way
                            • Circular retail options introduce a new set of challenges
                              • Interest in renting and reselling will expand to new categories
                              • What’s Working

                                • Partnerships allow retailers and consumers to explore circular options
                                  • Blurring the lines between retail and resale
                                    • Figure 6: thredUP Instagram post, October 2019
                                    • Figure 7: The RealReal Instagram post, October 2019
                                  • Retailers remain relevant with rentals
                                    • Figure 8: Rent the Runway email campaign, January 2020
                                  • Rent the Runway on a quest to free up space for consumers: at home, in their closets and on the road
                                    • Figure 9: Rent the Runway Instagram post, December 2019
                                • What’s Struggling

                                  • A unique retail method creates unique challenges
                                    • Logistical challenges
                                      • Battling fakes and dirt
                                      • What to Watch

                                        • Untapped categories provide room for rental market expansion
                                          • The future of beauty will include resale
                                            • Social communities fuel ongoing interest in secondhand
                                            • The Consumer – What You Need to Know

                                              • Awareness isn’t an issue, as nearly 40% have already tried some circular options
                                                • Circular options appeal to consumer desire for experimentation and value
                                                  • Consumers’ quest for quality raises questions on cleanliness and authenticity
                                                  • Item Ownership and Acquisition

                                                    • Analyst Perspective:
                                                      • Nearly four in 10 consumers already engaged in circular ownership
                                                        • Figure 10: Item acquisition – NET any item, by generation, December 2019
                                                      • Consumers looking for thriftier ways to shop everyday clothing and investment pieces
                                                        • Figure 11: Item ownership and acquisition, purchased secondhand, December 2019
                                                      • Rentals allow young adults to try trends and avoid shopping
                                                        • Figure 12: Item ownership and acquisition, by gender and age, December 2019
                                                    • Retailers Shopped

                                                      • Analyst Perspective:
                                                        • Consumers shop around, based on differentiated meanings of value
                                                          • Figure 13: Retailers shopped, December 2019
                                                        • Communal marketplaces attract young shoppers
                                                          • Figure 14: Etsy holiday commercial, November 2019
                                                          • Figure 15: Retailers shopped, by age, December 2019
                                                      • Reasons for Shopping Alternative Options

                                                        • Analyst Perspective:
                                                          • Flexibility and sustainability have widespread appeal
                                                            • Figure 16: Reasons for shopping alternative options, December 2019
                                                            • Figure 17: Rent the Runway email campaign, December 2019
                                                          • Gen Z values freedom and eco-impact
                                                            • Figure 18: Reasons for shopping alternative options, by generation, December 2019
                                                          • Ability to experiment and experience is dually appealing
                                                          • Motivations to Shop Alternative Options

                                                            • Analyst Perspective:
                                                              • In digital age, consumers need a frictionless experience to consider shopping
                                                                • Figure 19: Motivations to shop alternative purchase options – TURF analysis, December 2019
                                                              • Those interested in renting want easy, convenient options
                                                                • Figure 20: Category interest and motivations to shop, by gender and age, December 2019
                                                              • Moms need reassurance to avoid unwanted circular purchases
                                                                • Figure 21: Category interest and motivations to shop circular options, by parental status and gender, December 2019
                                                              • Black consumers are willing to share and want rewards for doing so
                                                                • Figure 22: Reasons and motivations to shop circular options, by race and Hispanic origin, December 2019
                                                            • Attitudes toward . . .

                                                              • Renting items
                                                                • Figure 23: Attitudes toward renting items, December 2019
                                                              • Combating cleanliness builds trust and conversion
                                                                • Previously owned items
                                                                  • Figure 24: Attitudes toward previously owned items, December 2019
                                                                • Reselling my personal items
                                                                  • Figure 25: Attitudes toward resale, December 2019
                                                                  • Figure 26: Christy Dawn x thredUP email, January 2020
                                                                  • Figure 27: Poshmark Instagram, January 2020
                                                              • Appendix – Data Sources and Abbreviations

                                                                • Data sources
                                                                  • Consumer survey data
                                                                    • Abbreviations
                                                                      • Abbreviations

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