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The Circular Economy - US - February 2020

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Market overview
Top takeaways
Pride of ownership is decreasing
Retailers need to offer frictionless circular shopping options
Consumers need reassurance they won’t forfeit quality for value or sustainability
What’s next
MARKET PERSPECTIVE
The circular market is growing in popularity and competition
CATEGORY INTEREST
High cross-category interest signals potential for the market to grow
Figure 1: Category interest – NET any interest, December 2019
Infrequently purchased items are the point of entry for the rental market
Figure 2: Category interest, December 2019
Thrifty nature of women piques interest in secondhand
Figure 3: Category interest – NET any item, by gender and age range, December 2019
Multicultural consumers’ dual interest in trends and savings, piques interest in rental and resale
Figure 4: Category interest – NET any item, by race and Hispanic origin, December 2019
MARKET FACTORS 
Mintel Consumer Driver – Value: Consumers continue to seek budget-friendly options
Figure 5: Budgeting behaviors, Mintel Consumer Drivers Survey, July 2019
Mintel Consumer Driver – Surroundings: Informed consumers prioritize sustainability to protect their environment
Mintel Consumer Driver – Identity: The sharing nature of circular options appeals to community-driven consumers
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Partnerships allow retailers and consumers to explore circular options in a less risky way
Circular retail options introduce a new set of challenges
Interest in renting and reselling will expand to new categories
WHAT’S WORKING
Partnerships allow retailers and consumers to explore circular options
Blurring the lines between retail and resale
Figure 6: thredUP Instagram post, October 2019
Figure 7: The RealReal Instagram post, October 2019
Retailers remain relevant with rentals
Figure 8: Rent the Runway email campaign, January 2020
Rent the Runway on a quest to free up space for consumers: at home, in their closets and on the road
Figure 9: Rent the Runway Instagram post, December 2019
WHAT’S STRUGGLING
A unique retail method creates unique challenges
Logistical challenges
Battling fakes and dirt
WHAT TO WATCH
Untapped categories provide room for rental market expansion
The future of beauty will include resale
Social communities fuel ongoing interest in secondhand
THE CONSUMER – WHAT YOU NEED TO KNOW 
Awareness isn’t an issue, as nearly 40% have already tried some circular options
Circular options appeal to consumer desire for experimentation and value
Consumers’ quest for quality raises questions on cleanliness and authenticity
ITEM OWNERSHIP AND ACQUISITION
Analyst Perspective:
Nearly four in 10 consumers already engaged in circular ownership
Figure 10: Item acquisition – NET any item, by generation, December 2019
Consumers looking for thriftier ways to shop everyday clothing and investment pieces
Figure 11: Item ownership and acquisition, purchased secondhand, December 2019
Rentals allow young adults to try trends and avoid shopping
Figure 12: Item ownership and acquisition, by gender and age, December 2019
RETAILERS SHOPPED
Analyst Perspective:
Consumers shop around, based on differentiated meanings of value
Figure 13: Retailers shopped, December 2019
Communal marketplaces attract young shoppers
Figure 14: Etsy holiday commercial, November 2019
Figure 15: Retailers shopped, by age, December 2019
REASONS FOR SHOPPING ALTERNATIVE OPTIONS
Analyst Perspective:
Flexibility and sustainability have widespread appeal
Figure 16: Reasons for shopping alternative options, December 2019
Figure 17: Rent the Runway email campaign, December 2019
Gen Z values freedom and eco-impact
Figure 18: Reasons for shopping alternative options, by generation, December 2019
Ability to experiment and experience is dually appealing
MOTIVATIONS TO SHOP ALTERNATIVE OPTIONS
Analyst Perspective:
In digital age, consumers need a frictionless experience to consider shopping
Figure 19: Motivations to shop alternative purchase options – TURF analysis, December 2019
Those interested in renting want easy, convenient options
Figure 20: Category interest and motivations to shop, by gender and age, December 2019
Moms need reassurance to avoid unwanted circular purchases
Figure 21: Category interest and motivations to shop circular options, by parental status and gender, December 2019
Black consumers are willing to share and want rewards for doing so
Figure 22: Reasons and motivations to shop circular options, by race and Hispanic origin, December 2019
ATTITUDES TOWARD . . .
Renting items
Figure 23: Attitudes toward renting items, December 2019
Combating cleanliness builds trust and conversion
Previously owned items
Figure 24: Attitudes toward previously owned items, December 2019
Reselling my personal items
Figure 25: Attitudes toward resale, December 2019
Figure 26: Christy Dawn x thredUP email, January 2020
Figure 27: Poshmark Instagram, January 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Abbreviations
Abbreviations

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