Resale is booming tremendously. We see brands announcing their new resale channel every day, and we see a lot of brands making the same mistakes. We listed them in this article so you can avoid them when setting up your own recommerce.

The rise of the resale market

Although buying second-hand was already gaining popularity before COVID-19 struck, the pandemic really accelerated the growth of the resale market. Right now we’re seeing consumers who combine tighter budgets (because of inflation) with a stronger desire for sustainable products. Maybe these consumers were clearing out their wardrobes during the pandemic, to find out they could very easily sell their used clothes through platforms like Vinted.

And then they discovered the art of finding the perfect second-hand catch. A lot of people are addicted to visiting flea markets. Now, many more people are addicted to the digital alternative: finding the perfect bargain on resale platforms. And it’s second-hand, so it must be sustainable. Guilt-free shopping at its best.

Enter the opportunity for brands: what if consumers wouldn’t buy their second-hand Hugo Boss shirt on Vinted but on a dedicated Hugo Boss resale channel?

  • A greener image? Check.
  • Increased customer loyalty? Check.
  • A higher customer lifetime value? Check.

It almost sounds too good to be true. That’s probably the reason why, according to Forbes, the resale market is growing 11 times faster than traditional retail. Also according to Forbes, the resale market is projected to reach around 77 billion USD in the next five years.

Patagonia leads the way

When it comes to setting up a recommerce channel, fellow B Corp Patagonia led the way in the apparel industry by launching Worn Wear in 2017. In an official statement, Patagonia claimed: “Worn Wear is a set of tools to help our customers partner with Patagonia to take mutual responsibility to extend the life of the products Patagonia makes and customers purchase. The program provides significant resources for responsible care, repair, reuse and resale, and recycling at the end of a garment’s life.”

Patagonia got it right: the goal of their program was to celebrate the longevity of their products and to change the way people think about all the stuff they own.

Picture credits: Patagonia

4 mistakes to avoid when setting up a resale channel

1 – Forgetting what it’s all about

In my opinion (I might be a bit biased), reselling products is all about sustainability. It’s about making sure your products are used as long as possible and aren’t thrown away while someone else could use them.

We want people to use existing products longer, so they buy fewer new products. Because new stuff equals more resources needed, more greenhouse gas emissions, and eventually, more waste.

And that’s the catch, of course. The ultimate goal of most producers or fast fashion brands is to make consumers buy more of their products. So some of those brands merely consider their resale channel as a marketing tool and as a way to keep consumers engaged so they buy more new products.

We see brands setting up a resale program and then giving their customers gift cards, vouchers, or discount codes to stimulate participation in the program. Unless these codes or vouchers can only be spent on the resale platform (which is hardly ever the case), this becomes just another way for brands to incentivize their customers to buy new stuff. These brands are missing the whole point of recommence, to begin with. Can you smell the greenwashing?

We cannot allow resale platforms to become an incentive to buy even more new stuff

Michael, Founder – Quest

2 – Not making it an essential part of the brand’s (impact) strategy

We see brands jumping on the resale train rather hastily. “It’s a trend and we need to follow quickly before we miss the boat”. Yes, but you also need to follow in a smart way.

Having a resale program should become an essential part of your general and your impact strategy. You need clear short- and long-term goals on how many used items you sell and how that will impact the number of new items you produce and sell. Continuous monitoring and communication will be key as the importance of authenticity, transparency and full traceability will continue to grow in the next few years. Those brands who play their cards right from the start will be able to turn their resale program into a real long-term differentiator instead of being a one-off gimmick.

Let’s set up a resale channel together

Our impact and service design experts can help you build a resale channel that optimizes your impact, revenue and customer experience

3 – Doing more of the same
Resale platforms offer brands an enormous opportunity to improve their customer journeys. The potential to create extra touchpoints that stimulate brand loyalty can hardly be overestimated. And yet we see way too many boring resale channels that all look alike and don’t add any value to the customers’ experience or the brand’s image.

4 – Not using the revenue potential
Some brands are so focused on the marketing potential that they completely downplay the revenue potential. Resale is here to stay and its importance will only increase in the following years. So you better have a sustainable, long-term business model that uses the potential of resale optimally by turning it into an important revenue stream.

The European Commission presented a package of European Green Deal proposals to make sustainable products the norm, boost circular business models and empower consumers. An important aspect of this new strategy is to tackle fast fashion, textile waste, and the destruction of unsold items. And of course, there’s also the ethical aspect: textiles need to be produced taking into account all human and labor rights. So what’s this new regulation about and what does it mean for fashion brands and manufacturers?

The EU Strategy for Sustainable and Circular Textiles

The goal of the EU Strategy for Sustainable and Circular Textiles is to ensure that by 2030 all textile products sold on the EU market are long-lived and recyclable, free of hazardous substances, made of recycled fibers as much as possible and produced in respect of social rights and the environment. Additional goals are:

  • Tackling the release of microplastics from textiles
  • Ensuring the accuracy of green claims to avoid greenwashing (finally!)
  • Boosting circular business models
  • Making reuse and repair services economically profitable so they become widespread

EU measures for fashion

The EU has already proposed a number of specific measures:

  • New design requirements for textiles: a.o. mandatory minimums for the inclusion of recycled fibers, making products longer-lasting and easier to repair and recycle.
  • Banning the destruction of unsold products under certain conditions
  • Clearer product labeling and a Digital Product Passport that contains key information on product circularity and environmental aspects
  • A mandatory EU extended producer responsibility scheme and economic incentives to make products more sustainable
  • Supporting the research, innovations, and investments needed for this transition
  • Calling on companies to reduce the number of collections they launch per year
  • Asking EU member states to adopt favorable taxation measures for the reuse and repair sector.

What does this mean for fashion brands and manufacturers?

This means that the negative impacts of the sector will be monitored more closely from now on. Fashion brands and manufacturers will need to integrate sustainability, circularity, transparency, and traceability into their overall business strategy:

 

  • Sustainability and circularity: a strong focus on minimizing the environmental footprint of products and on making products more long-lasting, easy to repair and recycle
  • Transparency and traceability: more transparent labels and more transparency on the entire supply chain. We already see a big rise in traceability platforms and apps, using blockchain technology to validate information most of the time. We expect this rise will speed up drastically.

 

This also means that the race for big fashion brands to claim a specific sustainability position in the market will become more pressing. We can only hope that this time it doesn’t lead to hollow slogans, but inspires true change. Traceability platforms like TrusTrace and Made2Flow can play an important role in this. By now, I think it has become very clear that the brands that limit themselves to doing the bare minimum will lose their momentum in the long term.

For those pioneering, bold fashion brands that already put circularity, sustainability, ethics, and/or traceability at the core of their business model, this means that the number of (big) competitors will increase tremendously. If you’re one of those companies, now’s the time to define your long-term game plan. You know what’s coming, how are you going to use that to gain a competitive advantage rather than being passed by less ambitious organizations who can spend more on their marketing? We also expect to see a lot of large organizations taking over the pioneering, already sustainable brands. To gain their expertise and their image.

Let’s seize the opportunity

You’re a fashion brand and you need help to turn this new regulation into a major competitive advantage? We’re here to help.

Learn from our customers

We’re lucky enough to maximize the impact of a couple of organizations that are working very hard to positively transform the fashion industry:

  • Fashion for Good: the world’s first and biggest sustainable fashion museum and sustainable fashion innovation programme. Fashion for Good searches the globe for the most promising sustainable fashion startups and helps them to scale through (a.o.) an accelerator programme and funding.
  • Global Fashion Agenda: fosters industry collaboration on sustainability in fashion to drive impact. GFA is the organizer of the largest business event on sustainability in fashion, the Global Fashion Summit.
  • New Cotton Project: Twelve pioneering players are working together to demonstrate an entirely circular model for commercial garment production.
  • Organic Cotton Accelerator: OCA wants to unleash organic cotton’s full potential for positive impact. They unite the sector to challenge ‘business as usual’, increase global organic cotton supply, empower organic cotton farmers, and provide a roadmap for systemic change.

So will fast fashion and all its negative effects disappear real soon?

We can only hope that will be the case, but if we’re honest, we don’t think so. This regulation is definitely an ambitious step in the right direction, though. We have to give the big players the time to radically shift their business model, while at the same time push them to not settle for industry minimums.

We love the ambition of the EU to stop greenwashing, but it remains unclear how they are going to track this. Who will define the standards and the line between greenwashing and valid information? Last but not least, we would have loved to see more focus on the ethical and social challenges of fast fashion as well. We don’t see enough focus on these aspects when we look at the measures that are proposed now.

Collective action, between different businesses, but also between businesses and governments is the only way to tilt the scale. So in the end, we are feeling optimistic about this major step taken by the EU Commission. A lot of organizations needed this push. Now it’s up to all relevant governments and businesses to take up their responsibility and make sure that all these beautiful words are finally turned into effective actions.