Retailers are buying back their old stock as they try to make the most of the growing popularity of the circular economy. 

Key points:

· Some surveys show more than a quarter of consumers are buying more second-hand to cope with inflation

· Retailers are developing models to recycle goods and retain repeat business

· A quarter of global fashion sales are tipped to be circular by 2030

Op shops have long been the domain of second-hand goods but as the cost-of-living crunch cuts consumer spending power, retailers are reselling their pre-loved stock.

The rise of the circular economy is also being driven by businesses and consumers eager to lower their impact on the climate.

That's what's driving Sasha Titchkosky and her furniture and homewares business Koskela.

"We've been measuring our carbon footprint for four years now and worked out that, basically, every time we had a good year, we could see our scope three emissions increase," she told ABC News.

"That started to get us thinking about what was the best way that we could continue to operate our business but look at different ways of reducing our carbon impact.

"The best way that we think we can do that is through a transition to a circular economic business model."

The Sydney-based manufacturer fits out offices and schools.

It's a business model that often generates a lot of waste.

"Huge amounts of commercial office furniture go into landfill every single year in Australia," said Ms Titchkosky.

 

Co-founder and CEO of Koskela, Sasha Titchkosky, wants to cut their scope three emissions.( ABC News: John Gunn )

The company plans to be fully circular by 2027 and one way they hope to do that is by offering their commercial clients a subscription service.

"Where the ownership never actually passes to the user of the items, we retain ownership, which means we're sort of incentivised to create really-high-quality products that last a long time," explained Ms Titchkosky.

"We handle all the moving of those items for them — if you take into account the reduced maintenance costs, and then landfill costs, this sort of scheme takes out all of the hassle of that, and makes it a much better experience for them longer-term."

It's also launched a buyback program to update and resell its goods to retail customers.

Customers will trade in their returned items and Koskela then refurbishes the product to offer for sale again, at a reduced price.

Ms Titchkosky said it would make its products available to more customers.

"This gives them an opportunity to access our products at a cheaper price," she explained.

Customers driving circular demand

Research and consulting firm Fifth Dimension said the rising cost of living was driving more people to the second-hand market.

Chief executive officer Lyndall Spooner said the second-hand market in Australia was worth about $60 billion and was growing around 25 per cent a year.

 

Consultant Lyndall Spooner says the growing circular economy will remain beyond the cost-of-living crisis.( ABC News: Shaun Kingma )

"I guess the question is, will the second-hand market continue after the cost-of-living crisis is over?" Ms Spooner asked rhetorically.

"Everything is indicating that the market will continue to grow.

"It's set to double in the next four years and that's not just in Australia, that is globally that this market is growing.

"So it will certainly continue to grow after the cost-of-living crisis."

A recent consumer survey by Capterra found 82 per cent of Australian shoppers were changing their spending habits because of their personal finances.

As costs rise, 26 per cent of those surveyed said they were buying more second-hand goods.

The trends are global and across multiple retail sectors.

Analysis by Boston Consulting Group and the Ellen MacArthur Foundation found that circular business models in fashion made up 3.5 per cent of the global market in 2019 – worth $US70 billion ($104 billion).

That is tipped to reach 23 per cent of the global market, valued at $US700 billion, by 2030.

Making sport cheaper

French-founded outdoor and sporting store Decathlon has just launched its global circular programs in its Australian stores.

"It's really popular overseas, we've saved 2.3 million products from landfill with our Second Life program, so we're excited to bring it to Australia," said Decathlon Australia communications leader Erin Eedy.

 

Erin Eedy says Dacathlon's bike buy-back program is popular with families.( ABC News: Dan Irvine )

The retailer's Second Life program features ex-display stock or items returned by a customer and sold for up to half the price of the original.

"It's available across all of our product range equipment, from tents to kayaks, camping gear and backpacks, and it's our way of making it an easier option for the consumer to be able to make a more sustainable choice."

Ms Eedy added that the kid's bike buyback program is particularly popular.

"Bring in your old bike into the store, you fill in a form online, which will give you an estimated price as to what your bike back will be worth, one of our technicians will give it a once-over and confirm that price with you and then you'll get refunded with a gift voucher to spend in-store either on a new bike or a brand new product," she explained.

In an ever-competitive retail environment, what's old is new again, especially when it keeps customers spending within your store.