July 16, 2025 — Article
It’s not a case of wholesale reinvention. Honing in on one key initiative is the best place for retailers to start when it comes to embracing the circular economy. Aimee explains.
When consumers say they expect the goods they buy to be reused, repurposed, repaired or recycled but don’t consistently recycle their cans, clothes, glass or plastics, it can seem like more of the burden gets pushed elsewhere in the product ecosystem.
In Australia, while 732 million unwanted clothing items were diverted from landfill in 2023 to be recycled or reused domestically or internationally, 924 million ended up in landfill. Retailers and FMCG brands face a persistent tension: customers say they care about sustainability, but their behaviour doesn’t always follow through.
In the face of this, established brands, especially those with complex product ecosystems, can stall or get stuck, unsure whether to invest in sweeping business transformation or hold out for clearer signals from the market.
So how can established retailers protect their market share while contributing effectively to the circular economy in similar, compelling brand-building ways?
One bold move: Coles’ circular hero play
The answer for many brands mightn’t be wholesale reinvention. One focused, ambitious initiative that visibly demonstrates intent can move the dial.
Coles’ response to the collapse of soft plastic recycling scheme REDcycle is a good example. Rather than withdraw, the retailer co-invested in a study and trials of new advanced recycling technology to create a closed-loop system for soft plastics, transforming them into usable oil and new packaging.
This is a hero move: high-risk, high-visibility, and deeply aligned with customer pain points.
It doesn’t rely on customers becoming perfect recyclers overnight. Instead, Coles is building infrastructure that enables better behaviour and is earning trust in the process.
The cost of staying still: Zara’s circular inertia
Contrast that with Zara. Despite promoting a “Join Life” collection with more sustainable materials, Zara has been criticised for low numbers of recycled clothes being made into new garments and promoting more of the same fast-fashion behaviours that create greater waste and a weighty carbon footprint.
The brand has already felt the squeeze of tightening regulations in Europe aimed at cracking down on greenwashing. Inaction is starting to cost, not just culturally, but commercially.
The eco trailblazers raising the bar
Exciting Australian brands like Paire and Xefco are setting new standards by baking circularity into their DNA.
Paire designs underwear from superfine tree fibre, socks from blended plant and animal fibres, and activewear from biodegradable corn-based material, BioFlex™. Among many notable innovations, Xefco has developed waterless, chemical-free textile dyeing technology used in award-winning apparel from global outdoor clothing brand The North Face, for example.
Circular leadership means making it easy
Customers may not always recycle or reuse, but they’re paying attention to who makes it easy for them to start. A bold, singular initiative – like garment repair or reuse, commitments to collaborations with creators of innovative, less wasteful fabrics, or better recycling infrastructure – can be the lever that transforms brand perception and shifts consumer behaviour.
In a market increasingly shaped by regulation, new circular-first players, and circularity-conscious consumers, one thing leads to another.
Remember, circular leadership isn’t about waiting for perfect conditions. It’s about acting with clarity, backing intent with infrastructure, and not placing the entire burden on the consumer. In a landscape where inaction is increasingly costly, a single, well-placed move can be the catalyst, not just for shifting behaviour, but for shaping the future of the entire product ecosystem.
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This article first appeared in Inside Retail.
Aimee Coleman is Experience Director & Principal at Principals.
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