Making the shift to a circular model is something more and more fashion brands are working towards.
The industry is partially forced to do it because of the new legislation and also because more and more consumers want it.
BUT: it’s not an easy road to walk. Whether it’s figuring out how to design products that last, getting all the different teams on the same page, or even just making sure customers understand what you’re trying to do, there are a lot of hurdles to jump over.
In this post, we cover 21 key challenges that fashion brands face when they try to go circular. From the big-picture issues like leadership and strategy to the nitty-gritty details of operations and communication. We dive into what’s holding brands back and what they need to watch out for.
If your brand is thinking about making the shift, understanding these gap problems is the first step toward dealing with them.
1. Management Gaps
- Lack of Circular Economy (CE) Knowledge: Many managers lack the necessary understanding of circular economy principles, making it difficult to integrate these into business strategies effectively.
- Resistance to Change: Organizational culture in traditional fashion brands often resists the shift from linear to circular models because of fear of disrupting set processes.
- Limited Leadership Commitment: Without strong leadership pushing for circularity, initiatives stay superficial or isolated within the company.
2. Brand Strategy Gaps
- Greenwashing Risks: As brands attempt to market their sustainability efforts, there is a significant risk of greenwashing if the circular strategies are not genuinely impactful.
- No Consumer Engagement: Consumers are often not aware of or interested in circular solutions, which makes it difficult for brands to shift from fast fashion to sustainable options.
- Misalignment with Brand Identity: Sometimes, circular initiatives don’t quite fit with a brand’s established identity, especially if the brand is known for cheap, disposable fashion.
3. Product Design and Development Gaps
- Poor Circular Design: Products often aren’t designed with circularity in mind—they’re not durable, repairable, or recyclable, which goes against the whole idea of a circular model.
- Material Sourcing Issues: Finding materials that are sustainable, recyclable, or biodegradable and still meeting quality and performance standards is a big challenge.
- High Production Costs: Sustainable materials and circular design processes usually cost more. This can be a roadblock, especially in markets where price matters a lot.
4. Operational Gaps
- Technological Limitations: The technology in use today is often geared toward linear production models, not the circular processes like recycling or remanufacturing that we need.
- Scalability Challenges: Circular business models, especially those focused on resale or recycling, often struggle to scale efficiently because of high operational costs and logistical problems.
- Supply Chain Complexity: Aligning every part of the supply chain with circular practices is tough, especially when working with global suppliers who are not following the same standards.
5. Regulatory and Compliance Gaps
- Inconsistent Regulations: The lack of consistent global regulations on circularity makes it hard for brands to roll out standardized practices across different markets.
- Insufficient Government Support: There’s often not enough government backing or incentives for circular initiatives, making it hard for brands to justify making the switch financially.
- Extended Producer Responsibility (EPR) Schemes: Current EPR schemes aren’t really moving the needle on extending product lifetimes or cutting down textile waste in a meaningful way.
6. Logistics and Infrastructure Gaps
- Reverse Logistics: Managing the return, sorting, and reintegration of used products back into the production cycle is still a huge challenge.
- Lack of Recycling Infrastructure: Many areas don’t have the recycling facilities needed to deal with textile waste, so it often ends up being incinerated or dumped in landfills.
- Overproduction and Waste Management: Brands often make more products than they can sell, and without solid circular strategies, that excess stock is usually destroyed rather than reused.
7. Social Sustainability Gaps
- Neglect of Social Dimensions: Circular strategies often miss out on the social side of sustainability, like creating jobs, improving worker conditions, and supporting community well-being.
- Consumer Behavior: Changing people’s habits from a ‘buy-and-discard’ mentality to a more sustainable one is hard and requires a lot of education and marketing.
8. Market and Financial Gaps
- High Initial Investment: Shifting to circular models needs a big upfront investment in technology, training, and new systems, which can scare off smaller brands.
- Uncertain ROI: The return on investment for circular initiatives is often not clear, making it tough to get financial support.
- Competition with Linear Models: Circular brands have a hard time competing with the low prices and quick turnaround of traditional fast fashion companies.
9. Customer Return Logistics Gaps
- Inefficient Return Systems: Setting up efficient systems for customers to return used products for recycling or resale is tricky, especially in areas with poor infrastructure or where customers aren’t motivated to do it.
- Quality Control on Returns: Ensuring that returned items meet the standards needed for resale or recycling takes a lot of work, which can drive up costs.
10. Transparency and Traceability Gaps
- Lack of Supply Chain Visibility: Many brands don’t have full visibility into their supply chains, making it hard to make sure that everything follows circular principles, especially with complex global networks.
- Data Management Challenges: Keeping track of and check data about where products come from, what they’re made of, and their lifecycle is crucial for transparency but tough to manage without the right digital tools.
11. Consumer Education and Awareness Gaps
- Low Consumer Awareness: A lot of people don’t know what circular fashion is, so they’re less likely to get involved in initiatives like take-back programs or making more sustainable buying decisions.
- Misinformation and Confusion: There are so many certifications and sustainability claims out there that it can be confusing, making it hard for consumers to make informed choices and slowing down the adoption of circular practices.
12. Material Innovation Gaps
- Limited Availability of Sustainable Materials: Materials that support circularity, like biodegradable fabrics or fully recyclable fibers, aren’t widely available or are too expensive for large-scale use.
- Slow Adoption of New Materials: Even when sustainable materials are out there, the fashion industry is slow to pick them because of cost, performance, and whether consumers will actually like them.
13. Lifecycle Assessment (LCA) Gaps
- Weak LCA Tools: The tools we currently have to assess the lifecycle impact of fashion products often aren’t precise enough and don’t fully get the environmental and social impacts, making it hard to make informed decisions.
- Cost and Complexity of LCA: Doing a thorough lifecycle assessment takes a lot of resources and money, which is a big problem for smaller brands.
14. Business Model Innovation Gaps
- Stiff Traditional Business Models: Many fashion brands are stuck in their old ways, focusing on high-volume, low-cost production, which doesn’t fit well with the circular economy’s focus on quality, longevity, and reuse.
- Difficulty in Monetizing Circular Models: Brands often find it hard to make money from circular models like leasing, renting, or subscriptions, which makes it challenging to adopt these new approaches.
15. Product Life Gaps
- Lack of Extended Responsibility: Brands often don’t take responsibility for their products throughout their entire lifecycle, including after they’ve been used by the consumer – this is key to making circularity work.
- Challenges in Product Take-Back: Setting up effective product take-back schemes takes a lot of logistical effort and getting consumers on board, which can be hard to pull off.
16. Partnership and Collaboration Gaps
- Lack of Collaboration Across Sectors: Circular economy practices need collaboration across different industries, from raw material suppliers to waste management companies, but these partnerships are often underdeveloped or nonexistent.
- Lack of Industry Standards: Without industry-wide standards for circular practices, there’s inconsistency, which makes it harder for brands, suppliers, and recyclers to work together effectively.
17. Circular Design Education Gaps
- Lack of Circular Design Training: Designers often aren’t trained in creating products that align with circular principles, leading to designs that aren’t optimized for reuse, recycling, or biodegradability.
- Slow Integration of Circular Design in Education: Fashion design programs have been slow to include circular economy principles, so new designers entering the industry aren’t equipped with the skills or mindset needed for circularity.
18. Operational Efficiency Gaps
- Low Resource Efficiency: Traditional operations are usually optimized for speed and cost, not resource efficiency, which leads to wasteful practices that clash with the goals of a circular economy.
- Energy-Intensive Processes: Many of the production processes used in fashion are heavy on energy use, which isn’t great for a circular economy that’s all about minimizing environmental impact through more efficient operations.
19. Team Collaboration Gaps
- Siloed Departments: In many fashion companies, departments work in isolation, with little communication or collaboration, which makes it hard to integrate circular practices that require everyone to work closely together.
- Resistance to Cross-Functional Collaboration: Teams may resist working across departments because they have different goals or no incentives to collaborate, making it tough to implement circular initiatives that need a holistic approach.
20. Operational Scaling Gaps
- Challenges in Scaling Circular Operations: Scaling up circular operations, like recycling or remanufacturing, is tough, especially when it comes to maintaining efficiency, quality, and cost-effectiveness as you grow. Many brands struggle to expand their circular initiatives without losing operational efficiency or driving up costs.
21. Communication Gaps
- Ineffective Internal Communication: Poor communication between departments can lead to everyone not being on the same page about circular goals, causing delays or inefficiencies in getting circular practices off the ground. For example, if the design team isn’t talking effectively with the production team, circular design ideas might not be fully realized in manufacturing.
- Lack of Clear Messaging: Externally, brands might have a hard time clearly explaining their circular initiatives to consumers, leading to confusion or skepticism. This can damage consumer trust and make it harder to get people on board with circular products and services.
The uphill is steep for brands to become circular, but with focused efforts brands can get there sooner than later. The coming legislation with “solve” some of the above problems but we need a holistic approach both inside of brands in the operations and in terms of the product and customer involvement.
Portia was developed with frameworks and workflows built in the software to help brands faster transition to circularity. Looking at a holistic approach from internal operations to product life and customer/retailer engagement.
Book a 1:1 call to see how PORTIA can help your brand move towards circularity.
