Circularity in Ecommerce

The circular economy in retail keeps clothing, products and materials in use for as long as possible — through repair, resale, refurbishment, rental and recycling — replacing the linear "take-make-dispose" model so goods re-enter the economy after use rather than becoming waste. For ecommerce specifically, circularity shows up as the operational and commercial machinery behind Recommerce (resale), rental, take-back and repair programs, increasingly forced onto roadmaps by EU regulation rather than pulled by executive demand.

The five circular models

Sources consistently name the same recognised circular business models in fashion/retail (Ellen MacArthur Foundation; Circular Economy Alliance, via Web — Circularity in Ecommerce 2026-06-26):

Model	What it is	Vault page
Resale / recommerce	Reselling used items (P2P, branded take-back, third-party RaaS)	Recommerce · Resale-as-a-Service (RaaS)
Rental	Access over ownership; one garment serves many users	Fashion Rental
Repair	Extending product life; resale value is tied to condition	Product Repair Programs
Refurbishment / take-back	Brand reclaims, restores and remarkets	Reverse Logistics
Recycling	Material recovery (fibre-to-fibre, downcycling)	Textile Recycling

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).

Market size (as-of 2026-06-26)

• Secondhand to grow 2–3× faster than firsthand over the next two years, reaching $317B by 2028 (McKinsey/BoF State of Fashion 2026, via Trellis). Branded resale among mid-market brands rose 300% (2021→2025).
• Global secondhand poised for $393B by 2030 (ThredUp 2026 Resale Report, via WWD).
• Fashion rental ≈ $2.47B (2025) → $9.18B by 2035 at 12.4% CAGR (Custom Market Insights, vendor).

The regulatory engine: EU ESPR

Unlike most ecommerce trends, circularity is increasingly mandated. The EU's Ecodesign for Sustainable Products Regulation (ESPR) is the central driver (EC Green Forum primary source, via Web — Circularity in Ecommerce 2026-06-26):

• 18 July 2024 — ESPR entered into force (transition to 2030; replaces the 2009 Ecodesign Directive).
• 16 April 2025 — first Working Plan adopted; textiles prioritised.
• 9 February 2026 — delegated/implementing acts on destruction of unsold products adopted; textiles/footwear disclosure obligation applies from February 2027.
• Connected instruments (vendor/secondary timelines, not yet confirmed on the official EU page): the Digital Product Passport textile delegated act (~Jan 2026, in force ~July 2027) and mandatory textile Extended Producer Responsibility (EPR) (EU-wide by 2028 under the revised Waste Framework Directive).

What retailers are doing

• The North Face "Renewed" — rebuilds damaged garments; 96,000 items resold last year vs hundreds of millions new (Trellis).
• Tersus Solutions processes resale for 25+ labels (Arc'teryx, New Balance, Lululemon, Patagonia) (Trellis).
• H&M — second "Preloved" store-within-store (Nov 2025); Scope 3 down ~24% (2024 vs 2019) (Trellis).
• IKEA — bought back 495,000+ items in 2024; IKEA Preowned marketplace piloted Oslo/Madrid (Earth911, secondary).
• Patagonia Worn Wear — 120,000+ garments recovered since 2017 (Patagonia, brand-owned).
• EMF Fashion ReModel (launched 2024) — Decathlon, H&M Group, Primark, Reformation, Zalando testing decoupling revenue from production (WWD).
• Vinted became France's top retailer by volume (spring 2025) after >330% net-profit growth 2023→2024 (Trellis).

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/infrastructure favour linear production and resale is taxed at every transaction. With the right policy mix, gross margins could reach 55% (resale) / ~41% (repair) — still short of closing the gap with linear models (WWD).
• EMF: labour = 50% of repair cost per unit, and repair costs don't fall with scale (bespoke work) (WWD).
• A ~70-business coalition (H&M, Primark, Inditex, ThredUp, Vestiaire, Vinted) is lobbying the US/Canada/EU to cut VAT on resale/repair and expand EPR (WWD).
• Demand-side reality: only 7% of executives plan to back circular models; <1/3 call resale a 2026 priority (State of Fashion 2026, via Trellis).

What practitioners report

Reddit practitioner sentiment was not captured this run (reddit-research MCP not connected). Trellis flags "overproduction" as the unaddressed core — 80bn–276bn garments/year, ~38% returned or never sold, with only 11% of large brands disclosing volumes (Trellis citing Tech Tailors/Fashion Revolution). (Underlying Tech Tailors figure is 2023.)

Key terms

Term	Meaning
Circular economy	Keeping products/materials in use; eliminating waste vs "take-make-dispose"
ESPR	EU Ecodesign for Sustainable Products Regulation — in force July 2024
Fashion ReModel	EMF accelerator (2024) testing decoupling revenue from production
"Economic trap"	EMF framing: linear production is structurally cheaper than circular
Additive (critique)	Resale grows alongside, not instead of, new production

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