Is transparency a good business strategy? Consumer preferences and willingness to pay for information about the chemical content of reused and recycled clothing

Abstract

Recirculation can play an important role minimizing the environmental impact of the textile industry. However, there exist conflicts between recirculation of resources and regulatory strategies for a non-toxic environment. One pathway to remove restricted substances from recirculation is through labelling strategies that inform consumers about the chemical content of products. To date, research on the influence of information about chemical content on consumers' willingness to pay for retail purchases, particular in the clothing sector, is rather limited. Using discrete choice experiments conducted in Denmark, Sweden and the United Kingdom with a sample of 1528 adults, we investigated whether access to information about the chemical content of garments influences consumer willingness to pay across new, recycled and reused clothing. Although access to information about restricted chemicals is enshrined as a right-to-know in the European Union's regulations, the study highlights low awareness of this right: <23 % of respondents in all countries have requested such information. Findings show a strong preference for either instant access to chemical information through a QR code or direct access to information printed directly on a product label. Interestingly, the choice of QR code is preferred over printed product labels. At the same time, information provided in the standard 45-day waiting period is no more preferred than no information at all. Meaningfully, consumers in all contexts are willing to pay a premium for rapid access to information for new and recycled options, but there is uncertainty regarding used options. Our results also show that up to 9 % of the respondents choose according to an elimination-by-aspects strategy, meaning they will avoid purchasing clothes without access to information about chemical content. The results strengthen the need for higher transparency and better exchange of information along textile value chains, however they also emphasize the already high uncertainty faced by circular economy enterprises.