Thoughts about…..a circular economy approach to CRM

Ann Marie Newton for QHQ

As introduced in the QHQ blog ‘CRM: a vital fashion business process’ CRM or Customer Relationship Marketing is becoming more important in the business world, here we will look at CRM in the fashion & textile industries. As the idea of brands develop and evolve, so too does the importance of each brand or organisation’s relationship with us, the customer. The work in this area right now focuses on two main outputs: customer retention and sales. This is achieved by using data from previous activities to streamline how a brand or organisation communicate with an individual.

The current model of CRM reflects the linear economy that we currently function in, that of take—make—waste. So, as there is more and more talk about the Circular Economy, that of reuse, repair, recycle, how might a fashion & textile brand’s CRM look in such a model? Back in 2014, Jessica Vaughn wrote in The Guardian a piece called “Five new ways the circular economy can build brand experience”. The five ways listed are:

1. Selling temporary ownership

2. Secondhand sales

3. Collecting and recycling goods

4. Product repair

5. Designing for endurance

These are ways of working within a circular business model which naturally give more opportunities to interact with, appeal to and build a customer relationship.

Vaughn advises ‘It's a markedly different way of doing business that relies in part on brands forging new, more enduring relationships with their customers.’ Vaughn also gives examples from fashion; Mud Jeans who lease denim jeans to their customers, and then take them back, repair and reuse or send for recycling, Patagonia who are leaders in the world of repair and second hand clothing and H&M encouraging customers to bring used clothing back into their store. Of interest are examples from the world of electronics, including Google’s Project Aria, where rather than deposing of and upgrading a mobile phone, customers can swap out modules. This way of working could also be applied in fashion or textiles.

In a 2018 Ellen MacArthur Foundation, leaders in the Circular Economy, published a report “Keeping Customer Connections”. Here different engagement and interaction models are explored, such as donation, recycling, leasing and rental. These start to explore the shifts in customer behaviour driven largely by the climate crisis. This shift in customer behaviour provides an opportunity for a shift in the brand/customer relationship too, which in turn could result in an increase in the moments of interaction which give a brand or organisation the chance to strengthen its customer relationship.

Shipping and communications company parcel lab UK published a report in 2019: “E-Commerce Shipping Study 2020: Fashion Edition” 100 fashion companies communication post-purchase was analysed, the results were that 99% currently don’t capitalise on post-purchase customer touchpoints by not sending personalised communication, and letting customers figure out shipping and tracking on their own. This suggests that not engaging directly with customers after purchase is commonplace but, there is also a big opportunity for fashions brands to apply CRM after purchase.

Right now, CRM efforts do a great job up until the point of purchase, it makes sense to extend that work after a customer has made a purchase too. This aligns with the circular economy where everything is kept within a cyclical model for much longer. A circular economy approach offers much more opportunity to engage with customers beyond the point of purchase, if in fact a purchase is what happens at all, taking more of a long term, sustainable view and approach. In a circular economy model of CRM, the customer relationship would be considered for the entire lifecycle of a product, and perhaps beyond.

In the Ellen MacArthur Foundation report mentioned earlier they offer suggestions of where to start if your company would like to make a move to improved CRM in a Circular Economy model. They offer some common links in starting points; examples are given for each.

“We found that successful projects after the point of sale have a few things in common:

• They start with a customer problem, and they solve it

• They find the right language to talk about projects

• They break down silos and encourage partnerships

• They think big but start small.”

I would suggest to consider thinking more in a circular economy way, you can think about models such as leasing or renting rather than sales, opportunities to repair and reuse rather than a throw away culture, of building things to last in the same vain. From their customer touch points will naturally emerge, if a customer would like to repair an item of clothing you sold or leased to them, make it easy to do so. Considering the bigger picture and a more sustainable use of our earth’s resources can lead to more prosperous relationships all around! Give it a try & let us know how you get on…