What: Visa argues that second-hand is poised to grow given the increasing inflation and growing environmental concerns.

Why it is important: If this is the new trend, how can it become profitable for retailers? For now, no-one has found the solution.

The circular economy is gaining traction globally due to increased environmental concerns, policy drives for resource efficiency, and shifting consumer preferences towards sustainability. Factors like high inflation, evident in spikes in the UK and Australia, have led consumers to opt for second-hand goods.

Visa data reveals increased card transactions in used merchandise stores during these inflation periods. Technology, particularly digital apps, have facilitated the growth of the circular economy. For instance, there was a 200% surge in the UK's resale app usage in 2022. The fashion industry is a significant player, with the second-hand market projected to surpass fast fashion by 2029.

The sector could also create new commerce platforms and payment infrastructures. AI and blockchain will further enable the circular economy, from product lifecycle management to supply chain transparency.

As inflation promotes circular consumption behaviors, technology, coupled with a robust payment ecosystem, will catalyze the circular economy's expansion.

Fashion resale apps enable circular economy’s broadening appeal