Circularity in Ecommerce

The circular economy in fashion aims to eliminate waste and keep products and materials in use for as long as possible — through resale/recommerce, repair, rental, and recycling — replacing the linear "take-make-dispose" model. In ecommerce it manifests as the operational and commercial machinery behind Recommerce, rental, take-back, and repair programmes, increasingly forced onto roadmaps by EU regulation. For large enterprises in the EU, the first hard regulatory deadline landed on 19 July 2026.

The four circular pillars

Sources consistently identify four recognised circular business models in fashion/retail (Ellen MacArthur Foundation; Circular Fashion Federation / KPMG, March 2026; via Web — Circular Economy Fashion Ecommerce 2026-07-10):

Model	What it is	Vault page
Resale / recommerce	Reselling pre-owned garments through branded take-back, P2P platforms, or third-party RaaS	Recommerce · Resale-as-a-Service (RaaS)
Repair	Extending product life via in-store or mail-in services; France introduced a repair voucher (bonus réparation)	Product Repair Programs
Rental / Fashion as a Service	Access over ownership; one garment serves multiple wearers sequentially	Fashion Rental
Recycling	Fibre-to-fibre or garment-to-material recovery; structurally constrained	Textile Recycling

The Circular Fashion Federation / KPMG study (March 2026) estimates up to 80% of a product's environmental impact is determined at the design stage — making eco-design foundational, not additive (as-of 2026-03-10).

As of 2023, global fibre production reached 124 million tonnes; less than 8% came from recycled sources and under 1% from recycled textiles (Textile Exchange 2024, via Reconomy 2026). The circularity gap is structural, not a demand-side problem.

Market size and growth (as-of 2026-07-10)

The global secondhand apparel market grew 13% year-over-year in 2025 to an estimated $257 billion and is projected to reach $393 billion by 2030, growing roughly twice as fast as the overall apparel market (ThredUp 14th Annual Resale Report, 2026). A separate McKinsey/BoF estimate puts secondhand at $317B by 2028 (via Trellis, 2025-11-21).

In the US, resale reached $55.5 billion in 2025, representing 12% of total US apparel spend, growing 14% YoY — four times faster than the primary fashion market (ThredUp 2026). Branded resale among mid-market brands rose 300% between 2021 and 2025 (McKinsey/BoF State of Fashion 2026, via Trellis).

In Europe, the combined circular fashion market (resale + repair + recycling) was estimated at €20 billion in 2024 and is projected to reach €31.3 billion by 2030 at 7.7% CAGR, creating more than 88,500 jobs (Circular Fashion Federation / KPMG, March 2026 — as-of 2026-03-10). Resale specifically is forecast at €26 billion by 2030; repair at €3.7 billion; textile recycling at €1.6 billion. European fashion rental market size in 2026 could not be sourced from a current attributable source (gap).

McKinsey's State of Fashion 2026 (February 2026) states resale is "set to grow two to three times faster than the firsthand market in 2027." Vinted and The RealReal have reached profitability — brands' early concerns about authenticity and loss of product control have "abated." Vinted became France's top retailer by volume in spring 2025 after >330% net-profit growth between 2023 and 2024 (Trellis, 2025-11-21).

The circular fashion sector (resale, rental, repair combined) is growing three times faster than traditional retail (BCG / Vestiaire Collective report, October 2025 — as-of 2025-10). Recommerce specifically is growing more than three times faster than normal commerce, according to Carousell Group VP Vishal Salunkhe at DELIVER conference (March 2026).

Mastercard Economics Institute reports circular sales were 27% of the luxury market and 4% of the mass market in 2024 (via Trellis, 2025-11-21 — as-of 2025-11-21).

Consumer behaviour (as-of 2026-07-10)

60% of American consumers purchased secondhand in 2025; Gen Z and Millennials are expected to drive more than 70% of resale market growth through 2030 (ThredUp 2026). In Europe, 68% of Gen Z and Millennials shopped secondhand in 2024 with nearly half saying resale is "the first place they look" (cited in multiple 2025–2026 industry sources via Renow 2025).

McKinsey (February 2026) reports that 85% of surveyed US consumers and 77% in China use resale to "explore aspirational brands for future purchases," compared with 66% in the UK — illustrating material regional differences.

48% of shoppers reportedly used AI tools during their secondhand shopping journey; 63% said they are comfortable with agentic buying (ThredUp 2026 — as-of 2026). This positions recommerce as a natural early surface for Agentic Commerce adoption.

Approximately 70% of McKinsey-surveyed consumers planned to spend less on fashion; 80% showed value-seeking behaviour. McKinsey links this to growing structural demand for resale and off-price circular channels (McKinsey State of Fashion 2026, February 2026 — as-of 2026-02-11).

The average European wardrobe contains 180–250 items (Karinna Grant, Fashion Council Germany keynote, July 2025 — as-of 2025-07-23). Fashion brands currently have no clear post-purchase visibility into what consumers do with garments — "still a bit of a gray area for brands" (Grant, Fashion Council Germany, 2025).

57% of resale platform sellers use earnings to cover bills and everyday expenses; 22% of Americans sold something used for the first time in 2025 (eBay Recommerce Report, via Renow 2025).

Business models and platforms

Brand-run recommerce

153 fashion brands now operate recommerce platforms (ServeRetail, 2026 — as-of 2026). Examples:

• Selfridges (London) integrates rental, resale, and repair alongside new goods (Fashion Council Germany keynote, July 2025)
• Levi's offers vintage and in-store repair (Fashion Council Germany keynote, July 2025)
• Zalando Pre-Owned integrated across 13 countries (Renow, October 2025 — as-of 2025-10)
• H&M second "Preloved" store-within-store (November 2025); Scope 3 emissions down ~24% (2024 vs 2019) (Trellis, 2025-11-21)
• The North Face "Renewed" — rebuilds damaged garments; ~96,000 items resold last year vs hundreds of millions new (Trellis)
• Patagonia Worn Wear — 120,000+ garments recovered since 2017 (Patagonia brand disclosure)
• IKEA — bought back 495,000+ items in 2024; Preowned marketplace piloted in Oslo and Madrid (Earth911, secondary)

60% of 50 fashion brands surveyed said the lack of a branded resale presence creates a "permanent structural disadvantage"; 42% cited losing Gen Z and Millennial market share as the biggest risk (ThredUp 2026 — as-of 2026).

Resale-as-a-Service (RaaS)

Third-party platforms handle take-back, grading, photography, listing, and fulfilment on behalf of brands:

• Trove powers branded resale for Lululemon (Like New), Patagonia (Worn Wear), Levi's Secondhand, and Nordstrom
• Tersus Solutions processes resale for 25+ labels including Arc'teryx, New Balance, Lululemon, and Patagonia (Trellis)
• ThredUp RaaS powers recommerce for Adidas, Crocs, and JCPenney

Brands typically offer less in trade-in than consumers could obtain on P2P platforms, but convenience and brand loyalty drive adoption (Practical Ecommerce, October 2025).

The EMF Fashion ReModel accelerator (launched 2024) includes Decathlon, H&M Group, Primark, Reformation, and Zalando, testing how to decouple revenue from production (WWD). Participating brands scaled circular revenue four times faster than broader business revenue — though circular revenue remains a small share of overall turnover for all 13 participants (EMF, May 2026).

Platform economics

ThredUp achieved Q3 2025 gross margin of 79.4% on $82.2M revenue; FY2025 guidance was $307–309M revenue. ThredUp launched a peer-to-peer beta (no seller fees) in late 2025 alongside its managed consignment model (Modern Retail, November 2025 — as-of 2025-11).

Fashion as a Service / fractional ownership (emerging)

Karinna Grant (Fashion Council Germany keynote, July 2025) describes "clothes as a service" — access to garments for a defined period without ownership. Grant's startup Keeper enables fractional co-ownership of iconic fashion archive pieces (£10,000–£1M+), authenticated on a blockchain, accessible from €50. Physical garments are stored in a vault in Paris; co-owners receive a digital twin, community access, and voting rights.

Grant noted that digital product passports for pre-loved and vintage items are "even more interesting" than for new goods, as each owner's interactions contribute dynamically to the item's provenance record.

The economic trap

The central tension: circularity does not yet pay as well as making new things.

• EMF: circular models are in an "economic trap" — policy and infrastructure favour linear production, and resale is taxed at every transaction. With the right policy mix, gross profit margins could reach 55% (resale) and ~41% (repair) — still short of closing the gap with linear models (WWD; EMF "The New Bottom Line," May 2026 — as-of 2026-05-21).
• EMF: labour = ~50% of repair cost per unit, and repair costs don't fall with scale (bespoke work) (WWD).
• H&M Group CSO Leyla Ertur stated resale "is still economically penalised" by double taxation and high labour costs (EMF press release, May 2026).
• Only 7% of executives plan to back circular models; fewer than 1/3 call resale a 2026 priority (McKinsey State of Fashion 2026, via Trellis).

Nearly 70 organisations — including Arc'teryx, Decathlon, Etsy, H&M Group, Lacoste, Primark, Reformation, ThredUp, Vestiaire Collective, Vinted, and Zalando — signed a joint statement in May 2026 urging governments in the EU, US, and Canada to fix the economics of resale and repair (EMF press release, May 2026 — as-of 2026-05-21).

Reverse logistics as circular infrastructure

Forbes Business Council contributor Disney Petit (CEO, LiquiDonate) wrote in April 2026 that reverse logistics is "the missing piece" of the circular economy: "Without a system to get those goods back into use, all the circular commitments in the world are just marketing copy." NIST estimates 85% of used clothes and textiles in the US end up in landfills or are incinerated, even if still wearable (NIST, cited Forbes Business Council, April 2026 — stale-risk on underlying NIST figure).

McKinsey's State of Fashion 2026 reports inventory days on hand (DOH) in 2024 were at an all-time high, 14% above pre-2020 averages, creating structural pressure on brands to develop secondary channels for surplus stock (McKinsey State of Fashion 2026, February 2026 — as-of 2026-02-11).

Returns in apparel ecommerce (see Returns Management, Bracketing (Fashion Returns)) represent an immediate operational source of recommerce inventory. The pipeline from high-return-rate ecommerce → resale channel is underserved in published research; the connection has not been documented at scale as of 2026.

Overproduction remains the unaddressed core problem — estimates range from 80 billion to 276 billion garments per year, with approximately 38% returned or never sold, and only 11% of large brands disclosing volumes (Trellis citing Tech Tailors / Fashion Revolution).

EU regulatory landscape (as-of 2026-07-10)

Ecodesign for Sustainable Products Regulation (ESPR)

ESPR (Regulation 2024/1781) entered into force 18 July 2024. Textiles are a priority product category. Key milestones:

• 19 July 2026: Large enterprises are banned from destroying unsold and returned textiles and footwear. Brands must route unsold/returned inventory to resale, donation, repair, or remanufacturing.
• 9 February 2026: Delegated/implementing acts on destruction of unsold products adopted; textiles/footwear disclosure obligation applies from February 2027 (EC Green Forum primary source).
• 19 July 2027: Same destruction ban applies to medium enterprises.
• Small and micro-businesses are exempt.

Digital Product Passport (DPP)

A delegated act detailing DPP textile requirements is expected in Q2 2027. Mandatory compliance is expected no earlier than late 2028. Phase 1 data fields: fibre composition, country of manufacture, chemical compliance, certifications. Phase 2 (2028+): carbon footprint and water consumption data. All DPP data must be accessible via QR code or RFID at point of sale, including ecommerce (Carbonfact 2025 — as-of 2025).

DPPs will affect brands "indirectly first" — through customer questionnaires, retailer requirements, public procurement, and export expectations — before the formal mandate (BDO Ireland / Enterprise Ireland, April 2026 — as-of 2026-04-10).

EU Textile EPR Directive

Came into force 16 October 2025. Member States have 20 months to transpose (by June 2027) and 30 months to establish EPR schemes (by April 2028). EPR fees are based on packaging weight, recycling content, recyclability, and may be higher for fast-fashion practices. Only France, Hungary, and the Netherlands had live EPR schemes for textiles as of late 2025 (Ecosistant 2025 — as-of 2025-12).

Mandatory separate collection of textile waste across all EU member states from January 2025 (EU Waste Framework Directive).

Packaging and Packaging Waste Regulation

Entered force February 2025; most provisions apply from 12 August 2026 — including a 50% cap on empty space in ecommerce packaging, and a requirement that all packaging become recyclable by 2030. Non-EU ecommerce sellers must appoint an Authorised Representative in each EU country by 12 August 2026 or lose the legal basis to sell (Article 40). Germany's Verpackungsgesetz imposes fines of up to €200,000 per breach.

Amazon's DSA risk assessments proactively blocked 99% of non-compliant listings in 2024, meaning EPR non-compliance translates directly into listing removal and revenue suspension (Lappa.org, April 2026 — as-of 2026-04-28).

Green Claims Regulation

From September 2026, generic green claims such as "environmentally friendly" are prohibited in the EU unless grounded in recognised performance standards; carbon-neutral claims face additional restrictions (Latham & Watkins, 2025).

EU Circular Economy Act

A legislative proposal is expected in Q3 2026; likely provisions include: harmonised EPR schemes, a digital one-stop-shop for registration and reporting, recycled-content targets, and end-of-waste criteria (Ecommerce Europe, 2025).

CSRD / Omnibus simplification

The EU Omnibus 1 package removed approximately 80% of companies from mandatory CSRD scope, raising the threshold to organisations with >1,000 employees and turnover >€450 million. However, 75% of de-scoped companies plan voluntary sustainability reports anyway, because banks, investors, and business partners continue to require sustainability information regardless of legal mandate (Enterprise Ireland / BDO Ireland, April 2026 — as-of 2026-04-10).

Supply chain data as competitive differentiator

BDO Ireland's April 2026 sustainability webinar concluded that "the real differentiator for many businesses will be the quality of their product and supply chain data" — not regulatory compliance itself (Enterprise Ireland, April 2026 — as-of 2026-04-10).

Climate disruptions are causing price spikes of up to 2x for raw materials such as cotton and wool, pushing sustainability from an ethical stance to a CFO financial-resilience priority (BCG Fashion CFO Agenda 2026, May 2026 — as-of 2026-05).

The Fashion Transparency Index 2025 (Fashion Revolution) found the highest brand score on climate/energy disclosure was 71%, with an average of just 14% across 200 of the world's largest fashion brands.

Environmental benchmarks (as-of 2026-07-10)

Action	Impact	Source
Buy second-hand	Extends garment life by 2.2 years; reduces carbon/water/waste footprint by up to 73%	CFF/KPMG (March 2026)
Repair a garment	Reduces CO₂ emissions by ~30%	CFF/KPMG (March 2026)
Double wears per garment	Reduces fashion GHG emissions by 44%	Ellen MacArthur Foundation
Eco-design	Up to 80% of product environmental impact determined at design stage	CFF/KPMG (March 2026)
Textile recycling	Global rate <8% from recycled sources, <1% from recycled textiles	Textile Exchange (2024)
Textile waste	120M metric tonnes globally in 2024; 80% landfilled/incinerated	BCG (August 2025)
Fibre value at risk	$50B value and ~180,000 jobs unlockable via better recycling	BCG (August 2025)
Garment overproduction	80bn–276bn garments/year; ~38% returned or never sold	Tech Tailors (2023) via Trellis

Key terms

Term	Meaning
Circular economy	Keeping products/materials in use; eliminating waste vs "take-make-dispose"
Recommerce	The buying and selling of pre-owned products via branded take-back or third-party platforms
Resale-as-a-Service (RaaS)	Third-party platforms (Trove, ThredUp) managing end-to-end recommerce on behalf of brands
Digital Product Passport (DPP)	EU-mandated data record accompanying a product through its lifecycle
ESPR	EU Ecodesign for Sustainable Products Regulation (Regulation 2024/1781)
EPR	Extended Producer Responsibility — makes producers financially responsible for end-of-life
Fashion as a Service	Rental-based model; consumers access garments for a defined period without ownership
Fashion ReModel	EMF initiative tracking brands' circular revenue performance; launched 2024
Economic trap	EMF framing: linear production is structurally cheaper than circular due to policy/tax gaps
Additive (critique)	Resale grows alongside, not instead of, new production — so environmental benefit is reduced

Related / frontier

Recommerce · Resale-as-a-Service (RaaS) · Reverse Logistics · Digital Product Passport · Extended Producer Responsibility (EPR) · Fashion Rental · Product Repair Programs · Textile Recycling · Vinted · Agentic Commerce · ESPR (Ecodesign for Sustainable Products Regulation)