Nearly 70 percent of consumers say they’re driven to the secondhand and repair markets not just for the sustainability benefits, but cost savings, too.
A recent study conducted by AI-powered payments network and shopping assistant, Klarna, has revealed an increasing consumer awareness regarding the financial benefits of sustainable practices such as repair and secondhand shopping. This finding is a part of Klarna’s 2024 Circularity Insights Report, which is based on a survey of more than 3,000 consumers from the United Kingdom, the United States, and Germany, supplemented by interviews with sustainability experts from The Wardrobe Diary Project, Save Your Wardrobe, and Refurbed.
The new report delves into consumer trends in circular practices within the fashion and electronics sectors and provides strategies for brands to capitalize on the potential of circularity. The report’s findings identify a significant gap between consumers’ attitudes, especially younger generations, toward circular practices and their actual behavior. This disparity is attributed to barriers such as cost, feasibility, and convenience, which prevent the widespread adoption of these practices.
Alexandra Colac, Sustainability Lead at Klarna, emphasizes the importance of the report. “Klarna’s 2024 Circularity Insights Report highlights consumers’ increasing awareness of the economic benefits of more sustainable, circular practices, like repairing items or second-hand shopping,” Colac said in a statement. “It also sheds light on challenges in turning this awareness into action. Our research is geared towards bridging this gap, offering businesses, including our 500,000+ retail partners globally, deeper insights to help them actively engage with and apply the principles of the circular economy in their practices.”
The study shows that a vast majority of consumers are aware of the financial benefits of circular practices, with significant potential savings seen in areas such as second-hand fashion, repairs, and rentals. Nearly 70 percent said that they have or anticipate potential savings by shopping secondhand, renting, or repairing fashion items. A similar number (66 percent) said the same for electronics.
The report found consumers under 35 were more likely to note the savings and benefits compared to older generations. In addition, more than half of the consumers across all demographics express a lack of interest in owning the latest gadgets, and there is a noticeable decrease in interest in new product releases compared to last year. Moreover, more than a third of global consumers have become more concerned about their ecological footprint over the past year.
The report also highlights the growth potential in the second-hand market, particularly among younger consumers. For instance, Gen Z is three times more likely to opt for second-hand electronics than those over 55, indicating a shift toward more sustainable consumer habits. However, the report notes a ‘repair paradox,’ where despite nearly half of the consumers believing that repaired electronic devices are as good as new, the majority choose not to repair their devices. This trend is mirrored in the fashion sector and presents a substantial opportunity for brands to encourage repair options.
Barriers to adopting circular practices vary across sectors. In electronics, the primary hurdles are cost and feasibility, often due to software incompatibility and built-in expiration dates. In fashion, feasibility, convenience, and utility are the main obstacles. Depreciation also affects second-hand shopping, with a significant portion of consumers citing low resale value as a deterrent.
Colac though sees this as an educational opportunity for brands to highlight the true and long-term value of products.
“What our research shows is that there’s an educational opportunity for brands to remind consumers of the true and long-term value of products,” she said. “Brands can also boost consumer involvement in the circular economy by emphasizing the financial, convenience, and style benefits of secondhand shopping, rentals, and repairs. This strategy not only extends product life but also merges environmental and financial perks, making circularity more appealing to consumers.”
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