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.
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.
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.