Trade-In Programs in the Fashion Industry: A Win-Win Sustainability Strategy for Consumers and Brands

Abstract

The fashion industry is renowned for its negative impact on the environment. To mitigate the adverse effect, some companies have recently adopted the circular economy model, which introduces used clothes in good condition back into the cycle through trade-in programs. Giving used garments a second life helps reduce the company’s carbon footprint and waste. It also provides consumers with an affordable and sustainable option, which is consistent with the growing trend of eco-conscious consumerism. In this study, we aim to explore consumers’ perceptions of trade-in programs in the fashion industry. We also examine how companies can leverage these programs as a powerful strategic tool to build brand trust and brand affect among younger generations (such as Gen Z and Millennials). This research draws upon different literature streams on signaling theory, brand trust, and brand affect. Our findings hold significant value for managers who wish to create strategically effective trade-in programs as part of their Corporate Social Responsibility initiatives.