A large majority of consumers see financial benefits from a circular economy approach – particularly when it comes to repairing items and second-hand shopping – according to a new report from AI-powered payments network Klarna.
Klarna’s 2024 Circularity Insights Report, which drew on insights from a survey of more than 3,000 consumers across the UK, USA and Germany, along with interviews with sustainability experts, explores approaches to circular practices within the fashion and electronic sectors.
It found that consumers, especially younger generations, are increasingly recognising the financial and environmental advantages of circular practices such as repair and second-hand shopping.
However, a significant disparity between attitudes and actions remains, with obstacles like cost, feasibility, and convenience impeding widespread adoption of these practices, as highlighted in the report.
‘Increasing awareness’
“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,” commented Alexandra Colac, Sustainability Lead, Klarna.
“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.”
Second-hand fashion
Some 69% of consumers have seen, or anticipate seeing, savings from second-hand fashion, repairs, and rentals, with 66% noting similar benefits in second-hand electronics shopping, the study found.
Elsewhere, consumers are prioritising eco-friendly choices – more than half (54%) ‘express indifference’ towards owning the latest gadgets, while 42% show decreased interest in new product releases compared to last year.
More than a third (36%) of global consumers are ‘more concerned about their ecological footprint’ than they were a year ago, it noted.
The growth potential in the second-hand market is evident, especially among younger consumers. While 70% of consumers bought only new clothes in the past year, this trend is even stronger in other categories: 82% for phones and laptops/tablets, 84% for shoes and accessories, and 87% for entertainment electronics.
However, there is a promising trend among younger consumers, particularly Gen Z, who are three times more inclined to choose second-hand electronics compared to those over 55.
Obstacles to circular practices
According to the study, the primary obstacles in embracing circular practices vary by sector. In electronics, cost (57%) and feasibility (33%) are the foremost barriers to repair as reported by consumers.
Frequently, issues like software incompatibility and built-in expiration dates pose challenges for consumers in extending the lifespan of their electronic devices. In the fashion sector, feasibility (31%), convenience (30%), and utility (27%) are predominant concerns.
“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,” Colac added.
“Brands can also boost consumer involvement in the circular economy by emphasising 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.”
Looking for information about why sustainability is important in business? Make www.sustainabilityonline.net your first choice.
One thought on “Majority of consumers see circularity as a money saver, report finds”
Comments are closed.