Understanding why consumers could choose circular luxury

The fashion industry is responsible for an estimated 2 to 8% of global carbon emissions (2) and ranks as one of the largest users of water worldwide, making it one of the world's most polluting sectors. Voices are growing louder in calling for this industry to take meaningful steps to reduce its carbon footprint, including in the luxury fashion industry, where circularity could be part of the solution.

But how to engage consumers with circular economy principles in the luxury industry, when these two terms may seem at first like opposing concepts? Arne De Keyser (EDHEC) and his coauthors* share their findings (1).

Consumer engagement: the path to circular luxury

While there is broad consensus that consumption is a key driver of climate change, transitioning to a more circular economy remains a central challenge for the fashion industry in general. The latter has been criticized for being wasteful and unsustainable, often associated with overproduction - estimates suggest that between 80 and 150 billion garments (3) are made yearly, of which 10-40% remain unsold (4), rapid trend cycles, and significant resource consumption. Events like fashion weeks have also drawn scrutiny due to their large carbon footprints and environmental impact.

Zooming-in on the luxury fashion industry, the concept of circular luxury is quickly emerging as an option with ethical and sustainable potential. Some luxury houses and retailers have begun to take steps toward circularity and sustainability. For instance, in 2021, the Italian luxury fashion house Valentino became the first leading brand to launch a program repurchasing and reselling used Valentino items in selected boutiques. Similarly, retailers such as Neiman Marcus and Nordstrom have partnered with the Ellen MacArthur Foundation to advance circular fashion initiatives. Beyond resale and take-back schemes, several brands are also experimenting with more sustainable materials, including vegan leather and recycled packaging.

Yet, achieving a true breakthrough in circular fashion hinges on consumer engagement (1), which can be defined as consumers’ inner motivation to embrace circular luxury, both attitudinally and behaviorally.

Reconciling sustainability and luxury

In some ways, sustainability challenges traditional luxury (5). For instance, the use of recycled or alternative materials can lead some consumers to question a product’s quality or uniqueness. This is in part because luxury has long been associated with rarity, craftsmanship, and exclusivity.

More specifically, the push for sustainability can result in consumers feeling that luxury products lose their exclusivity, causing them to perceive these products as less luxurious.

At the same time, concerns about ethics and sustainability in luxury seem to be growing. For instance, millennials and younger consumers are more likely than previous generations to view luxury as contradictory to sustainability (6), although this does not necessarily stop them from buying it. A recent survey (7) found that seven in ten luxury shoppers in Europe (six in ten in the United States) consider the adoption of sustainable luxury policies to be very or somewhat important.

The journeys towards engaging with circular luxury

This research shows that consumer engagement with circular luxury can manifest in several ways. 

Specifically, building on a series of in-depth interviews with circular luxury consumers, three different types of engagement journeys are found: price-sensitive journeys (price being the most important motivator for consumers to buy second-hand luxury), uniqueness journeys (buying second-hand luxury as a way for customers to affirm their lifestyle), and sustainability journeys (second-hand luxury buying triggered by caring about the impact of fashion on the environment, and deriving a sense of pride from it).

These journeys are not necessarily static. They can evolve over time, reflecting the dynamic nature of consumer engagement with circular luxury.

Indeed, initial motivations (such as affordability or a desire for uniqueness) may expand to include more altruistic concerns, with consumers increasingly valuing the sustainability aspects of their purchases. Those who first engage with circular luxury for economic reasons often report developing a deeper commitment to sustainability over time, gradually transforming their engagement journey. Instead of feeling ashamed of circular luxury, as they initially do when on a price-driven engagement journey, they start to feel proud and able to fit in when buying second-hand luxury.

The multiple reasons for circularity in luxury consumption

This paper shows that there are various reasons driving consumer engagement with second-hand luxury. Luxury brands who wish to adopt more sustainable practices should recognize them, and understand that while sustainability is an important factor, it is not always the primary motivator for consumers. Instead, brands should tailor their marketing strategies to appeal to a broader range of consumer motivations, such as affordability or the desire for unique, vintage items.

The dynamic nature of engagement journeys also implies that consumers' motivations may evolve over time, particularly as they become more familiar with circular luxury practices. Therefore, luxury brands should develop practices and strategies that not only address initial motivations but also guide consumers towards more sustainability-oriented mindsets. By helping consumers move beyond status-based consumption to consider the broader societal impacts of their purchases, brands can play a pivotal role in fostering more responsible consumption patterns.

As fashion designer Stella McCartney states: “We believe that the future of fashion is circular – it will be restorative and regenerative by design and the clothes we love never end up as waste.” (8) In the coming years, this vision is set to become more than just an ideal. It is already beginning to transform the luxury and fashion industry.

* Jonas Holmqvist (Kedge Business School), Charlène Berger (Total Energies) and Katrien Verleye (Ghent University)

References

(1) Holmqvist, J., Berger, C., De Keyser, A. and Verleye, K. (2025), Luxury in the Circular Economy: An Engagement Journey Perspective. J Consumer Behav, 24: 1486-1497 - https://doi.org/10.1002/cb.2460

(2) UN Alliance aims to put fashion on path to sustainability (2018) - https://unece.org/forestry/press/un-alliance-aims-put-fashion-path-sustainability

(3) Md Shamsuzzaman, Mazed Islam, Md. Abdullah Al. Mamun, Rishad Rayyaan, Kazi Sowrov, Saniyat Islam, Abu Sadat Muhammed Sayem, Fashion and textile waste management in the circular economy: A systematic review, Cleaner Waste Systems, Volume 11, 2025, 100268 - https://doi.org/10.1016/j.clwas.2025.100268

(4) WGSN x OC&C Report: Doing more with less - https://lp.wgsn.com/WGSN-OCC-Report.html

(5) Marie-Cécile Cervellon (EDHEC): “In this turbulent period, brands are compelled to reconsider what “luxury” truly means” (2025), EDHEC Vox - https://www.edhec.edu/en/research-and-faculty/edhec-vox/marie-cecile-cervellon-turbulent-period-brands-compelled-reconsider-what-luxury-truly-means

(6) Kapferer, JN., Michaut-Denizeau, A. Are millennials really more sensitive to sustainable luxury? A cross-generational international comparison of sustainability consciousness when buying luxury. J Brand Manag 27, 35–47 (2020) - https://doi.org/10.1057/s41262-019-00165-7

(7) Kantar x Altiant study: The new aspirations of young luxury customers (April 2025) - https://luxus-plus.com/en/kantar-x-altiant-study-the-new-aspirations-of-young-luxury-customers/

(8) Stella Mc Cartney - https://www.stellamccartney.com/gb/en/sustainability/circularity-2.html

Photo by Harper Sunday via Unsplash