The Future of Retail in a Circular World

In today’s economic environment, retailers have the ever-growing challenge of competing for consumer dollars while still attempting to maintain a profit amid rising costs. Now more than ever, affordability is guiding consumer decisions, with sale opportunities and secondhand shopping dominating the landscape. For retailers looking for a competitive edge, the circular economy offers a smart and sustainable way forward for attracting and retaining shoppers, while proving to be a bottom line benefit overall.

For those unfamiliar with the circular economy, products and materials are kept in circulation through processes such as maintenance, reuse, refurbishment, remanufacture, recycling, and composting. When it comes to retail, there are a few key areas where a circular economy is having the strongest impact:

• Reducing Waste: Retailers are focusing on durable, repairable and recyclable products.
• Keeping Materials in Use: Resale, refurbishment and recycling extend product life.
• Regenerating Natural Systems: Sustainable sourcing and minimizing environmental harm are key goals.

These principles not only meet consumer demands for responsible practices but also help retailers cut costs, strengthen supply chains, and stay competitive. Embracing circularity means reducing waste, fostering innovation, and aligning with the global push for sustainability.

Let’s dig into how retailers can embrace the circular economy, and the benefits it brings.

Related story: How Technology, Omnichannel Strategies, and Social Media Are Transforming Retail

Affordability: The Power Behind Secondhand Shopping

With 36 percent of consumers feeling more financially cautious, affordability currently tops the list of shoppers' priorities. Seventy-two percent of consumers rank it as the most important factor when buying apparel. Nearly 69 percent of consumers say discounts heavily influence their spending, while 28 percent actively seek more ways to save.

Resale is particularly appealing because it delivers quality and unique finds at much lower prices, meeting the needs of today’s cost-conscious shoppers. Secondhand shopping thrives in this environment by offering year-round affordability without relying on short-lived sales. For shoppers, it’s a consistent way to stretch their budgets.

The rise of secondhand shopping is reshaping retail, fueled by both economic factors and a growing commitment to sustainability. According to the survey, 71 percent of U.S. consumers and 68 percent of Canadian consumers express interest in a secondhand section. Those numbers are even higher among Gen Z, with 84 percent in the U.S. and 75 percent in Canada. This is a clear signal that younger shoppers are driving the shift toward circular retail. By embracing resale, retailers can meet demand for affordability while aligning with eco-conscious values, extending the lifespan of products and reducing waste. As secondhand shopping moves from niche to mainstream, retailers that integrate pre-loved sections stand to capture new revenue streams, attract sustainability-focused consumers, and future-proof their business in an evolving retail landscape.

Local Shopping Meets the Circular Economy

The concept of “shopping local” has been on the rise, with more and more consumers looking to purchase goods that are not only from small independent retailers, but also goods that are manufactured locally as well. When asked, 74 percent of consumers said they prefer shopping locally, with this trend strongest in essentials like food (71 percent) and home goods (41 percent). However, apparel trails not far behind at 31 percent, presenting a unique opportunity for retailers to capitalize on.

Secondhand platforms can redefine “local shopping” by promoting community-based resale, making apparel more accessible and affordable. Independent sellers can benefit from resale marketplaces by offering affordable, community-driven options. This approach strengthens local economies while advancing circular economy goals.

A Practical and Sustainable Path Forward

Resale + Sustainability

The resale market combines affordability and sustainability, making it an attractive option for budget- and eco-conscious consumers. Highlighting its environmental benefits — e.g., reduced waste and lower carbon emissions — can broaden its appeal.

Localized Resale Models

Retailers can tap into the 74 percent of shoppers who value localism by offering hyperlocalized solutions, such as partnering with community sellers, hosting in-store resale events, or developing local digital marketplaces.

Leveraging Technology for Seamless Shopping

Technology can enhance the secondhand experience. Artificial intelligence-powered pricing, blockchain for authenticity, and improved logistics address concerns like fair pricing and timely delivery, boosting shopper confidence.

Resale is being driven by a perfect storm of affordability, sustainability and innovation. Consumers are increasingly drawn to secondhand shopping not only for its cost savings but also for its environmental impact, reducing waste and carbon footprints. Retailers can further capitalize on this momentum by localizing their resale efforts, including partnering with community sellers, hosting in-store events, and building digital marketplaces that align with shoppers’ preference for supporting local businesses. At the same time, technology is making resale more seamless than ever, with AI-driven pricing and streamlined logistics removing traditional barriers. By embracing these trends, retailers can position themselves at the forefront of the circular economy, creating a shopping experience that's accessible, sustainable and future-proof.

By the end of 2025, secondhand shopping won’t just be about sustainability; it will be a key strategy in meeting consumer needs during challenging times. As affordability, quality, and discounts drive decisions, the circular economy will bridge practicality and ethics. For retailers, embracing resale offers new revenue opportunities while addressing evolving shopper priorities. Secondhand shopping is poised to be a cornerstone of the modern retail experience.

John Shapiro is chief product and technology officer at Lightspeed, a unified point of sale and payments platform.