Patagonia MindfulCommerce

6 Important Lessons Patagonia Taught Us About The Circular Economy

By MindfulCommerce • June 21, 2021

When it comes to pioneering attitudes to retail, Patagonia have always been leaders. At MindfulCommerce, we have huge respect for everything they're doing in the apparel space, leading the charge towards a more sustainable, ethical industry.

We have the circular economy on our minds at the moment following our special panel event (which you can find a recording of on our podcast! Ep #13). So we thought we'd look to Patagonia for a few lessons and pointers on the topic. They're the first to admit that not every scheme or action they've trialed has been effective – it's always refreshing to see that kind of transparency from a brand, and it says a lot that they're happy to share their failures so that others can learn from (and avoid repeating!) them.

So, without further a do, here are six important lessons that Patagonia taught us about the circular economy.

  1. Scale Matters

When it comes to putting a plan in place to close loops within your product cycles, it's not a one size fits all approach. Economies of scale need to factor into your decisions. Simply put, you'll need enough "flow" of product moving through your chain for things to be sustainable.

Patagonia discovered this when they set up a scheme to recycle and reuse polyester from their Capilene base layers. The plan was to see old base layers recycled via a Japanese tech company's progressive chemical recycling system, Eco Circle.

However, they soon ran into a problem. The base layers were very durable, and as a result, not many were being returned as part of the scheme! They simply couldn't meet the demand required by an industrial recycling technique of this nature.

The lesson? Closing the loop is a balancing act – the strategy you put in place needs to work for your own unique business, not just provide a good solution to the problem on paper. Gain a realistic understanding of your products' lifecycles.

2. The Bar Is Low

Patagonia may be leading the way when it comes to circularity, but by their own admission – "that's not saying much!"

Infrastructure, awareness and customer demand are on the up, but retailers are still lagging behind when it comes to making tangible changes to their infrastructure.

As we saw in our recent Circular Economy panel event with Claire from One Circular World and Adam from Recurate, the retail industry currently tends to operate in a linear nature, and it's this “take-make-waste” attitude that's at the heart of sustainability problems.

By making better use of resources, and upcycling waste into new products that can be used again and again, in a chain that's more akin to the cyclical patterns we see in nature, Patagonia see the potential to cut a garment’s carbon, waste and water footprint by 73%.

3. Second Hand Is Sexy

Resale is proving increasingly popular – second-hand is no longer seen as second best, and this is a wonderful thing when it comes to helping the retail sector achieve better sustainability.

Reselling of clothes is a great way to keep pre-loved items in circulation. As a result, it's better to prioritise this over recycling, which should ideally only be used when the garment is beyond repair or continued use.

This strategy isn't just wishful thinking – there's a real consumer demand and appetite for the second-hand market. In fact, resale grew 25 times faster than traditional retail in 2019 and is poised to hit $64 billion by 2024. It's especially appealing when it comes to high quality, branded goods. This, of course, puts Patagonia in a real sweet spot for success.

Patagonia has levelled up their input here over time. In 2011 they morphed their Common Threads Recycling Program into the Common Threads Initiative, which included an eBay store where customers could buy and sell used Patagonia products.

This has in turn evolved into Worn Wear - a standalone store that enables customers to buy second-hand Patagonia online (or in selected stores) as well as getting items repaired, to keep them in play. Worn Wear accounts for $5 million of Patagonia's business. We love that they've embraced ownership of this second-hand market, and that they position resale items as "better than new."

If you're looking to run a similar scheme, we highly recommend Recurate, which offers a beautifully integrated, white-labelled resale marketplace, directly on your Shopify-powered store.

4. Prioritise Your Supply Chain

One really interesting takeaway that we've gained from Patagonia's experience is that the best and most effective place to focus your attention with regard to creating closed loop retail is your supply chain.

While take-back programs and resale definitely have an important role to play, there's no point in investing effort here if you're going to undo all your good work with a damaging and wasteful product line.

It's important to interrogate your supply chain fully, looking for any (and all!) opportunities to make improvements, bringing your impact down incrementally. From methods of production to the materials you use, there's so much that can be done with regard to improvement.

Patagoina got wise to this early on, recognising the fact that their supply chain is the biggest contributor to their carbon footprint - a whopping 97%, with 86% coming from the raw materials needed to create their products. They have found success in working directly with their manufacturers, partnering with Vertical Knits, a Mexico-based manufacturer that owns the whole process of garment creation, from yarn through to the creation of the items themselves, factoring in efficiency practices such as scrap collection. They also work with Infinite Fiber, a Finland-based recycling operation that transforms almost any waste into new fibre.

An effective way to tackle this issue and keep things circular is by working with recycled materials. Patagonia have even highlighted the business sense in this. Recycled wool, to give just one example, is cheaper than its virgin equivalent, bringing down your overheads. Beyond this, as consumers become ever more conscious in their shopping habits, there's an opportunity to incorporate this move as a selling point within your marketing.

5. Narrowing Inventory Doesn't Have To Hurt Profit

Another way to reduce impact and keep your impact as low as possible is to take a long hard look at your inventory. Do you need to offer a tshirt in 20 different colourways, or would a smaller number of variants suffice? By keeping product lines tight, brands can guard against wastage (especially in elements like deadstock, where a factory will produce excess fabric to ensure there's enough to account for mistakes or shortages.)

As they note: "Capping products may sound like an axe to profit, but in a circular economy, it’s about generating more money from the same products..."

If you'd like to learn more about ways that you can dig deep into your supply chain and get proactive about making improvements, we'd recommend digging into our Sustainability Framework, which covers this in-depth and lots more!

Let's go round in circles!

While Patagonia provide a great example when it comes to pushing ahead with positive action for more closed loop apparel practices, it's important to note that lots of other exciting enterprises and schemes are starting to crop up as the movement gathers pace.

We've already highlighted the excellent Recurate, who provide a brilliant way of bringing more circularity to your retail operation, but you might also be interested to look at the work of The Renewal Workshop, who provide a really comprehensive and well-considered service, as illustrated below!

The Renewal System

Looking for tips on how to become better aligned with the circular economy - helping people, planet and profit?

Join the MindfulCommerce Community, and benefit from the insight and support of many likeminded retailers. And don't forget to download our Sustainability Framework!