Omnichannelling: Key to establishing circularity in the fashion industry

Abstract

Omnichannelling – Key to establishing circularity in fashion retail There is consensus in the fashion industry that a circular approach will lead to greater sustainability and that retail has a critical role in mainstreaming sustainability (Bostrom & Micheletti, 2016; Lehner 2015). This approach aims to be good for business, society and the environment. Circularity for the fashion industry has been described as the continuous cycling of products, including waste reduction, efficient use of resources, and helping customers do so too. For retailers, this highlights a shift from being product suppliers to service providers; for customers, a change from ownership to access through product-service systems and therefore increased interaction with retailers (CE100, 2018; Overdeik et al., 2020). Since the rise of ecommerce, customers have increasingly interacted with retailers through a variety of channels becoming cocreators of the retail service. These digital customers expect flexibility to find and buy the product or service they want from any location supported by a seamless shopping experience through integrated channels to enhance their total shopping experience (Saghiri, et al. 2017; Blumenstein et al., 2020; Quartier & Vanrie, 2017). This has given rise to what is known today as the ‘liquid customer’ (Maccan, 2016). In recent years, technology has empowered liquid customers to make retailers more accountable, customers have begun pushing them to be more transparent about their sustainability efforts. With clothing becoming the most purchased product online the sustainability challenges surrounding this sector have also gained momentum. Retailers have responded to increasing digital adoption by taking on the customer centric approaches including omnichannelling which allows customers to move seamlessly across all available channels on the purchase journey whilst continually cocreating with retailers in a dynamic retailing market (Blumenstein et al., 2020; Quartier & Vanrie, 2017). Similarly, the service economy relies on technology to gain insights on customers and inventory in real-time in a constant feedback loop. Technology is increasingly supporting interaction between customers and retailers, customers and products to create holistic customer experiences and services. Customers are empowered through their ability for greater customisation and therefore, personalisation of the retail servicescape. Thus, there is potential for omnichannelling to drive circularity, therefore the synergies between omnichannelling and circularity need to be explored. Both omnichannelling and the service economy are reliant on technology to gain insights on customers and inventory in real-time, in a constant feedback loop. For these reasons, a circular approach for the fashion industry needs to be supported by the dynamic capabilities of omnichannelling to respond to increased interactions between customers and retailers during and after use phase of products. In a circular approach, there are more engagements between retailers and customers in the use phase of products through sharing/renting and maintaining/repairing/upgrading and in the post use phase through recycling, reselling or donating (CE100, 2018). To date, studies relating to omnichannelling have not addressed circularity or sustainability, whilst studies about circularity in retail do not sufficiently address their dependence on channels and how various touchpoints can drive circularity adoption amongst customers.

In terms of circularity, the main barriers to mainstreaming it in the fashion industry have been identified in both the retailer and customer domain. Retailers are averse to the complex web of logistics required to scale circularity. Customers, although generally favouring fashion retailers moving towards sustainability, still have negative connotations to words such as recycled, upcycled, repaired and refurbished as well as the effort associated with these activities (BOF & McKinsey & Company, 2020; CE100, 2018). The paper therefore will elaborate on: What do retailers need to consider in their Omnichannel framework to support customer adoption of circularity? This paper aims to develop a framework to visualise the connections between omnichannelling and circularity. The paper will build on two important frameworks: the three-dimensional framework for omnichannel systems developed by Saghiri et al. (2017) which highlights what omnichannelling consists of ie. channel stage, channel type and channel agent and developments to this framework in, the sensing framework by Blumstein et al. (2020) which highlights how retailers can develop omnichannelling capabilities by developing dynamic sensing capabilities that enable responsiveness to dynamic market changes inherent in retailing operations. The first phase of the study will investigate the applicability of the aforementioned seminal research for fashion retailing and consolidate this into a proposed omnichannelling framework for fashion retailing. The second phase will develop the consolidated framework to identify and highlight connections between omnichannelling and circularity, emphasising those connections that can support customer adoption of circularity. The article will be built on a literature review to reveal themes to validate the frameworks and highlight the critical connections between omnichannelling and circularity that fashion retailers should focus on to engage customers in circularity. The study will contribute to the development of literature on omnichannel systems that support circularity in fashion retailing. It may also suggest new ways retailers should engage with customers in an increasingly digitised society in a constant state of flux and needing to respond to sustainability challenges. Finding synergies between omnichannelling and circularity ultimately assists retailers to engage with circular thinking, find new ways of generating value through product systems services and reduce resource costs. Keywords: Omni channel, circularity, customer experience