2024 is the Year of the “Circular Economy”

In today's retail world, sustainability is not just a trend; it's a transformation. Shifting changes in personal social and ethical priorities point to consumer demand for reuse across the retail value chain. Consumers in the US are awakening to the impact of sustainability and making buying decisions based on that.

Highlights of strategies and trends from 2023 are forecasting retail trends for 2024.

The Rise of Recycled and Recyclable Packaging

We have all received more packages during and after the pandemic. How many times have you opened a plastic envelope and thought, there must be a better way?

2023 has seen a significant trend towards eco-friendly packaging, which is biodegradable, recyclable, reusable, non-toxic, and constructed from recycled items. A rising consumer demand for sustainable products and packaging materials drives this trend.

The global recyclable packaging market grew from $28.33 billion in 2022 to $30.11 billion in 2023, marking a compound annual growth rate (CAGR) of 6.3%. This market is expected to grow to $36.14 billion by 2027 at a CAGR of 4.7%. 

Consumers in Western Europe were the most significant region to demand the recyclable packaging market in 2022, and Asia-Pacific is expected to be the fastest-growing in coming years.

The trend is clear: circular economies resonate deeply with an eco-conscious consumer base. For instance, post-consumer packaging waste reduces landfill impact and demonstrates a commitment to environmental stewardship. As reported by FitSmallBusiness, the move towards sustainable packaging is more than an ethical choice; it's a strategic business decision that appeals to a broad customer base.

From the FitSmallBusiness article, “An average of 70% of shoppers across generations are now saying that sustainability is more important to them than brand names.”

Recommerce and Thrifting: What’s old is profitable

Forget fast fashion; 2023 is about giving clothes and goods a second life to the tune of $350B by 2027.

The retail industry is experiencing a renaissance fueled by the surging trends of recommerce and thrifting. These eco-conscious practices are not only good for the planet, but they're also making waves with both consumers and retailers.

Consumers and retailers are re-imagining a world where you can quickly sell your pre-loved clothes online and find unique second-hand treasures at bargain prices. 

Platforms like ThredUp, Poshmark, and Depop make buying and selling pre-owned items more accessible than ever, contributing to a more circular economy.

The thrill of scoring a vintage gem at a local thrift store has moved beyond novelty. Gen Z and millennials are leading the charge, embracing thrifting for sustainability, affordability, and treasure-hunting appeal.

Savvy retail executives are recognizing the power of these trends. Nearly 75% are interested in incorporating secondhand goods into their business models, according to a recent report by ThredUp and GlobalData. Imagine major brands offering pre-owned sections alongside their new collections or partnering with recommerce platforms to reach eco-conscious consumers.

The rise of recommerce and thrifting signals a shift in consumer values. We're moving away from the wasteful culture of fast fashion and towards a more mindful approach to consumption. This trend is here to stay, reshaping the retail landscape for the better.

Retail Insider highlights valuable lessons from secondhand clothing retail, such as efficient inventory management and high-tech solutions to sell low-value items. These practices demonstrate how repurposing can be both environmentally sustainable and economically viable.

However, it’s not all upside. This is another shift for busy and anxious retailers that always have a full plate. There are new regulations, PCI 4.0 is coming, and employee retention is a full-time job unto itself.

People-first: Ethical Retail Practices

Ethical practices in how firms treat employees and customers are up for discussion, too.

Retailers are becoming more transparent in their product sourcing and material usage. This transparency helps customers understand the sustainability efforts and the ethical considerations behind their purchases. In 2023, many retailers were listing the sources of their products and the conditions in which they were made, further bolstering customer trust and loyalty.

But Make it Green

Renewable energy sources and energy-efficient upgrades will double again in 2024.

Retailers are increasingly turning to renewable energy sources such as solar and wind power. This shift is driven by the need to curtail carbon emissions and reduce operational costs. 

The global renewable electricity capacity saw significant growth in 2023, with renewable capacity additions reaching an estimated 507 GW, almost 50% higher than in 2022. This growth is supported by continuous policy support in over 130 countries, with significant expansions in the United States, European Union, and China due to policy incentives and economic factors.