What is the Circular Economy?

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Editor’s note: This article was originally published on April 8, 2019. It was updated on April 9, 2021, with new information about REI’s Used Gear and Rentals businesses.

Imagine a world where you could walk into a gear store and, instead of buying a tent, you could rent one for whatever kind of camping or backpacking you planned to do. If your tent developed a hole, you could bring it back to the company for repairs or an upgrade. And, after years and years of adventures, when the tent was no longer usable, a company could recycle it into a new product. Today, many organizations are working to make this world a reality by contributing to the development of the circular economy.

Most products take a one-way trip from the Earth to the landfill—what experts call a linear economy. The EPA estimates that in 2018, the U.S. generated 17 million tons of textiles, about 5.8% of total municipal solid waste that year. But some companies are adopting the circular economy, by making products that last longer, for example, and/or recycling products at their end of their lifetime.

This concept can’t be traced back to one single date or person. It’s been gaining momentum since the late 1970s through the work of academics, thought leaders and businesses, picking up even more steam following the 2002 publication of the book Cradle to Cradle, a manifesto for the circular economy. Here’s a deeper look at the circular economy and why REI is investing in it.

The Circular Economy Defined

Most traditional businesses that create and sell products use linear economic models that take, make, use and dispose of materials. The circular economy is a model that disrupts that process by extending the life cycle of products, increasing efficiency in how we use finite resources—such as petroleum-based materials—and promoting the recycling of products at the end of their life.

“Our goal is to transition from a linear take-make-waste economy to a regenerative economy,” said Kate Daly, Managing Director of the Center for the Circular Economy at Closed Loop Partners, an investment firm and innovation center focused on building the circular economy. “Our current economic system is very leaky. A circular economy keeps valuable materials in play, recapturing rather than wasting resources and bringing benefits to businesses, people and the planet.”

According to the Ellen Macarthur Foundation, one of the leading organizations promoting these efforts, the circular economy focuses on three things: keeping products and materials in use, designing products in a way that reduces waste and pollution, and prioritizing the use of renewable and recyclable materials.

This way of doing business is beginning to influence the outdoor industry. REI believes the circular economy is a promising model that can help reduce waste and increase efficiency in how we use our planet’s resources. “We live in a world of finite resources,” said Gregory Gausewitz, manager of product sustainability at REI. “We’re a growing population. We’re becoming increasingly aware of the impacts of our consumption. The ultimate goal of a circular economy is decoupling economic growth from resource consumption. How do we continue to attain a higher standard of living without continuing to deplete the planet?”

REI’s Role

One way the co-op is embracing the circular economy is by implementing programs that extend the life cycle of the products we make and sell. The thinking is that if we can keep outdoor gear and clothing in use for longer, we’ll get the most out of the Earth’s resources that we’ve already made into stuff.

But just how exactly is REI doing this? By selling Used Gear and Rentals. In creating solutions to allow people the option to buy used gear or rent gear they might not take into the wilderness that often, the co-op is hoping to help reduce the environmental and economic impact of outfitting.

And because used and rented gear is often cheaper, it also lowers the barrier to getting outside. More than half the people who purchased used gear at REI in 2019 were buying an item for a new-to-them activity at the co-op, said Laura Kelley, manager of recommerce at REI.

“We think our rentals and recommerce offerings provide access to gear for people who may not want to pay full price,” said Ken Voeller, director of circular commerce and new business development at REI. “Our circular commerce-oriented offerings serve as a way to get more people introduced into the outdoors simply by lowering the price point to entry.”

Used Gear

You can buy used gear from REI stores and online through the Used Gear program. The online Used Gear program works like this: The co-op, in partnership with Trove, inspects gently used items that have been returned and selects the best. Then, Trove helps the co-op put the items up for sale, allowing you to buy used gear at an affordable price and take it on a whole new set of adventures. By extending the life cycle of the products it sells, REI’s Used Gear program helps keep gear out of landfills and makes investing in gear more accessible.

According to a 2019 report from McKinsey & Company, the average person buys 60% more items of clothing than they did more than 15 years ago, and they keep that clothing for half as long. The good news: younger generations are becoming more interested in buying sustainable clothing.

So perhaps it’s no surprise that circular commerce—be it rented or used gear, or new items made with recycled materials—is gaining more and more traction in the retail industry. And REI is leading the way in the outdoor retail space, Voeller said.

“It’s been part of the broader conversation really for the last few years,” he said. “But certainly this past year, 2020, we really saw the circularity conversation accelerate, largely because of how closely tied it is to the conversation around climate change. We kind of view our circular commerce-oriented businesses as one of the many things REI will continue to invest in to hit our 2030 climate objectives.”

That’s because not only is buying used stuff easier on people’s budgets—it’s easier on the planet. On average, selling a used piece of gear emits at least 50% less carbon than selling a new item, even when you consider shipping, cleaning and remerchandising.

To extend the lifespan of its gear and apparel, REI also launched a member trade-in program in October 2020. This allows co-op members to swap their gently used items for an REI gift card, which can be used to purchase both new and second-hand products. There are some restrictions on what can be traded in (for instance, it can’t be broken or older than 6 years), but an online registry makes it easy to check which items qualify. REI then sends the appropriate packaging to the customer, so they can ship the items hassle-free. The co-op also opened two pop-up stores in 2020 that sell only used gear. One goal is to test whether it makes sense to open additional stores that sell only secondhand items in the future.

It’s not just sustainability REI has in mind with these programs. There’s also a business case, with more and more customers seeking planet-friendly options. “There’s a lot out there that suggests that younger and more diverse shoppers are more concerned about shopping within their values,” Kelley said. “This would include things like sustainability and being more conscientious about how they spend their money.”


REI’s rentals program is another way the co-op is seeking to extend the life cycle of its products. Most people are familiar with the way rentals work: By renting outdoor equipment, you can test gear without having to make a big investment. It’s a great way to try a new activity without breaking the bank. REI rentals are handpicked by experts; you can rent car racks in addition to gear for camping and hiking, climbing, cycling, paddling and snow. The rental program was especially important in 2020, when people turned to new outdoor activities as a way to find solace during the global pandemic.

“In a year where we saw participation really explode in the outdoors, REI was there to help customers get outside,” Voeller said. “That allowed some of these newbies to get outside in a super easy and approachable manner.” 

What You Can Do

For the circular economy to work, we all need to be involved, Gausewitz said. But it’s not as hard as it sounds. Here are a few things we all can do:

  • Buy used gear and apparel or rent it instead of purchasing new items.
  • When buying new gear, whenever possible, buy products that contain recycled materials and are also recyclable. You can identify products that use recycled materials or meet certain certifications—like bluesign© or Fairtrade—by checking their labels or tags or by reading the product specs online.
  • Keep your gear and apparel for a long time and repair it, when it’s broken.
  • And finally, instead of trashing your items when you’re done with them, donate, sell, recycle, or trade them in.

“The circular economy really relies on collaboration,” Daly said. “It’s just a question of understanding how we approach the design perspective and of thinking about the objects in our everyday lives in an entirely new way. And how we as consumers ask not only where does this come from but where does it go.”

Aer Parris and Sarah Grothjan contributed reporting to this story.