Lindex, following up on sustainability promise

In the long term, Lindex’ aims to integrate their take-back and resale model into their core business and even invite cannibalisation of primary sales.

By Maya Classen

the team

Lindex is one of Europe’s leading fashion companies, with approximately 460 stores in 18 markets and sales online and offering inspiring and affordable womenswear, kidswear, lingerie and cosmetics. 

A cross-functional Lindex team joined the Switching Gear project:
Director of Strategy & Business Development
Strategy Lead Circularity & Environmental Sustainability
Strategic Project Manager
Sales Channels Operations Manager
IT Technical Services Manager
Group Business Controller
Customer Research and Service Design
Assortment Manager
Head of Sales Operations

the urgency

Lindex’s ‘sustainability promise’ is to make a difference for future generations by empowering women, respecting the planet and ensuring human rights.

For Lindex, who had already established a form of take-back and reuse with partners since 2014, joining the Switching Gear project was about taking their commitment a step further. Lindex recognised the clear environmental urgency for circular business models and also noticed an increasing demand for them in their customer base. In addition, the business opportunity and rationale was important to them. Lindex understood that if they truly wanted rental or resale to be the way garments are traded going forward, then they should make it part of their own commercial offering and make it financially viable

The customer need

The Lindex resale business model serves two different customer needs. The take-back offers an easy and environmentally friendly solution to parents who have unworn baby or kids outerwear at home that they want to get rid of in order to make space in the closet. Meanwhile, the resale of pre-owned baby and kids’ garments offers environmentally conscious parents high quality, functional outerwear at a good price.

The business model

The Lindex resale pilot will be launched with a geographical focus on Sweden and the short term objective is for the model to be at least financially self-sufficient. In the long term, however, Lindex aims for the circular business model to be both scalable and profitable. 

The expected positive impact

The transition towards a circular business model is part of the brand’s growth strategy with the ultimate goal to decouple growth from production volumes by ensuring all garments are designed for longevity and circularity. In the long run, Lindex wants to align their core business with their circular business model and to invite cannibalisation of their primary sales. 

The prototype

Before rolling out their pilot, Lindex launched a prototype for the take-back programme and resale of baby and kids’ outerwear. They reached out to customers who had purchased baby or kids’ outerwear in the last three years to offer them the opportunity to return the outerwear they no longer used to two stores in Gothenburg or online in exchange for a fixed value gift card of 10-20% of the original resale price of the returned garment. 

To be able to also test their resale model, Lindex only collected high quality outerwear which could later be resold in selected stores. Their second hand offer was sold out within a few days, proving the customers’ interest in such an offer.

Hurdles and lessons learnt

One of the key hurdles that Lindex encountered whilst prototyping their circular business model was the low volumes of product collected via the take-back scheme. A low participation in take-back made them realise that they needed to dive deeper with their customers in order to understand the reasons for this and that offering and offering a customer friendly garment collection will be crucial to success.

By sending out a follow-up survey, they learned that well-timed collection moments—in line with customer behaviour (for example, ‘spring cleaning’) are crucial, as the main reason for low participation in the take-back programme was a lack of garments to hand in by the time collection had started.

On the other hand, the prototyping also gave them a positive early indication of potential of the resale itself. Lindex was positively surprised about the quality of the products coming back and the demand for secondhand, with collections quickly selling out in stores. This helped them to realise that timing and pricing of second hand goods in relation to their first hand sales is very important to the overall success of the model and that they must carefully align the two. 

Meanwhile, the circular innovation process itself opened the Lindex team’s eyes to the value of design thinking in aligning cross-functional teams and driving creative ideation. They hope to apply the same methodology when innovating on other parts of the business or product lines.

What’s next?

Lindex will kick off their pilot with their take back programme in Q2 2021. Since their target product will be baby and kids’ outerwear, the timing for the resale launch is important. The goal is to supply at least five stores in Sweden that will offer their resale range in Q3/Q4 2021. Depending on the success of the model, new product categories might be added at a later stage. Lindex is not afraid of cannibalisation: in the long run they hope to turn their pilot into a scalable and profitable business model that will integrate in their existing business, making the circular business model the new normal.

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