Most shoppers view circularity as a cost-saving practice

Amid rising living costs worldwide, many shoppers are recognizing the financial advantages of circular practices - in particular second-hand shopping and repair. As thrifting firmly becomes the new normal for many, especially among the younger generations, social awareness of the economic benefits of circularity continues to grow, according to a new report from Klarna.

However, there is still a notable bridge between action and attitudes, with hurdles such as cost, convenience, and feasibility slowing down the widespread adoption of circular practices, according to the 2024 Circularity Insights Report from the AI-powered payments network and shopping assistant.

The report found that 69 percent of shoppers surveyed have or anticipate saving money by shopping for clothing second-hand, renting items, or repairing what they have, with those under the age of 35 more aware of the cost-saving benefits of these practices. 54 percent of the consumers questioned across all demographics were indifferent towards owning the latest technologies or trends. 42 percent showed decreased interest in new product releases compared to last year, and 36 percent were more concerned about their ecological footprint than they were a year ago.

More consumers prioritize eco-friendly shopping choices

Buying less and buying second-hand is another trend that seems to be gaining traction among consumers surveyed in the USA, the UK, and Germany. In the past year, 70 percent of consumers only purchased new clothing, with 82 percent only buying new phones and laptops and 84 percent for shoes and accessories. Yet, a shift is emerging among younger consumers, especially Gen Z, who are three times more inclined to choose second-hand electronics compared to those over the age of 55, suggesting a move towards sustainable buying practices and a growing market for second-hand goods.

However, repairing seems to have its limitations among consumers. The report found that although nearly half (45 percent) of consumers believe repaired electronic devices are as good as new, most consumers recently chose not to repair broken entertainment electronics (85 percent) and mobile phones (71 percent), and 77 percent avoided mending their clothes. While this offers significant opportunities for brands to promote repair services, it also underscores the bridge between attitudes and actions.

Consumers still struggle with awareness vs. action

The report also found that different sectors face unique challenges in adopting circular practices. In fashion, the main issues consumers mentioned were feasibility (31 percent), convenience (30 percent), and utility (27 percent). Additionally, depreciation impacts second-hand shopping, with 21 percent of consumers deterred by low resale values for clothing.

"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," said Alexandra Colac, sustainability Lead at Klarna, in a statement. "Brands can also boost consumer involvement in the circular economy by emphasizing 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."