Klarna Finds Consumers Relate Sustainability to Cost Savings

Published 01 February 2024

Author
Nienke Creemers
2 min read

Swedish fintech giant Klarna has published its 2024 Circularity Insights Report, which spotlights attitudes around circular shopping (buying second hand, repairing and renting) for clothing and consumer electronics in the US, UK and Germany. The report finds that while most consumers know that circularity has financial benefits, this knowledge doesn’t translate into sustainable purchasing behaviours.

Key Stats

80%

The percentage of 16- 24-year-olds in the US, UK and Germany who recognise the cost-saving benefits of circular clothes shopping

77%

In the US, UK and Germany, 77% of 35- 44-year-olds recognise the financial benefits of circular clothes shopping

67%

The percentage of 45- to 54-year-olds in the US, UK and Germany who are aware of the financial benefits of circularity

52%

The percentage of consumers aged 55+ in the US, UK and Germany who are aware of the financial benefits of circularity

79%

The percentage of 16- 24-year-olds in the US, UK and Germany who are aware of the financial benefits of purchasing second-hand, repairing and renting electronics. This compares to 74% of 25- to 34-year-olds, 75% of 35- to 44-year-olds, 66% of 45- to 54-year-olds, and 49% aged 55+

45%

In the US, UK and Germany, 45% of consumers agree that a repaired electronic device feels as good as a new one, yet 71% did not opt to repair their mobile phone the last time it malfunctioned

70%

In the past year, seven in 10 consumers in the US, UK and Germany solely chose to buy new when shopping for clothes

82%

The percentage of consumers in the US, UK and Germany who only purchase new phones and laptops/tablets

87%

In the US, UK and Germany, 87% of consumers only purchase new entertainment electronics

26%

The percentage of 16- 24-year-olds in the US, UK and Germany who purchased used or refurbished electronics within the last year, compared to 20% of 25- 34-year-olds, 21% of 35- to 44-year-olds, 14% of 45- to 55-year-olds, and 7% aged 55+

57%

The cost of repair for consumer electronics is too expensive, according to 57% of respondents in the US, UK and Germany

21%

The low resale value of clothes is a barrier to 21% of consumers in the US, UK and Germany reselling their items

27%

The low resale value of electronics is a barrier to 27% of consumers in the US, UK and Germany reselling their items

30%

In the US, UK and Germany, 30% of consumers stated that buying new clothing and electronics is more convenient than buying circular

  • Circularity Equals Savings: Sixty-nine per cent of the respondents stated that buying second-hand clothing, repairing garments or renting pieces had either saved them money, or had the potential to do so. And 66% said the same of second-hand, rented, repaired or refurbished consumer electronics like smartphones and laptops.

    The study also shows that Gen Zers and millennials are more aware of these benefits than older cohorts – 80% of 16- 24-year-olds and 77% of 35- to 44-year-olds cited the potential savings for fashion, compared to 52% of those aged over 55.

  • Knowledge Does Not Equal Action: However, knowing the benefits of circular shopping doesn’t translate into action. Although 45% agreed that a repaired electronic device is as good as a new one, 71% didn’t opt for repair the last time their mobile phone malfunctioned. The same goes for fashion, with seven in 10 consumers solely shopping for new clothes.

  • Too Expensive, Too Much Hassle: Reasons cited for not engaging in circular shopping included the high cost of repair (57% for electronics and 21% for clothing) and low resale value (21% for clothes and 27% for electronics). Convenience is also a significant factor, with 30% saying that buying new products is easier.

    This calls for sustainability-minded brands to make eco-friendly behaviours more convenient by offering repairs and take-back schemes, and giving these second-hand products the same visibility as new stock.

See New-Era Anti-Consumerism for insight into what brands can do to keep up with eco-minded consumers.

  • Circularity Equals Savings: Sixty-nine per cent of the respondents stated that buying second-hand clothing, repairing garments or renting pieces had either saved them money, or had the potential to do so. And 66% said the same of second-hand, rented, repaired or refurbished consumer electronics like smartphones and laptops.

    The study also shows that Gen Zers and millennials are more aware of these benefits than older cohorts – 80% of 16- 24-year-olds and 77% of 35- to 44-year-olds cited the potential savings for fashion, compared to 52% of those aged over 55.

  • Knowledge Does Not Equal Action: However, knowing the benefits of circular shopping doesn’t translate into action. Although 45% agreed that a repaired electronic device is as good as a new one, 71% didn’t opt for repair the last time their mobile phone malfunctioned. The same goes for fashion, with seven in 10 consumers solely shopping for new clothes.

  • Too Expensive, Too Much Hassle: Reasons cited for not engaging in circular shopping included the high cost of repair (57% for electronics and 21% for clothing) and low resale value (21% for clothes and 27% for electronics). Convenience is also a significant factor, with 30% saying that buying new products is easier.

    This calls for sustainability-minded brands to make eco-friendly behaviours more convenient by offering repairs and take-back schemes, and giving these second-hand products the same visibility as new stock.

See New-Era Anti-Consumerism for insight into what brands can do to keep up with eco-minded consumers.