Quest Impact Design Studio

The rise of the resale channels

Already before Covid hit, second-hand fashion had been picking up momentum. Especially younger generations have been hanging about flea markets and garage sales to find the perfect second-hand catch. Resale channels as Vinted, Wallapop, Depop, Vestaire Collective perfectly met the needs of consumers who combined tighter budgets with a desire to be more sustainable.

The pandemic really accelerated the growth of the resale market, which has evolved from being a side business to a golden opportunity brands can’t seem to seize fast enough. Projections say the resale market is set to reach around 77 billion USD by 2025. Enter the opportunity for brands: why would consumers  buy their second-hand Hugo Boss shirt on Vinted, when they can do so on a dedicated Hugo Boss resale channel? 

Hugo Boss’s resale launch included comments that secondhand purchases on average are 44 percent lower in carbon emissions than new purchases. Lululemon announced “a major step toward a circular eco-system” while Target says it is testing resale “in service to deliver on evolving guest needs, value and bold commitments to sustainability”.

  • A greener image? Check.
  • Increased customer loyalty? Check.
  • A higher customer lifetime value? Check.
Resale section in a Patagonia shop
Picture credits: Patagonia

Patagonia leads the way

When it comes to setting up a resale channel, fellow B Corp Patagonia led the way in the sustainable fashion industry by launching Worn Wear in 2017. In an official statement, Patagonia’s board 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.”

As an example setter in the sustainable fashion space, Patagonia got it right: the goal of its program is to celebrate the longevity of their products, and to change the way people think about the clothes they own.

Are you planning on setting up your own resale channel?

 

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4 mistakes to avoid when setting up a resale channel

1 – Forgetting what it’s all about

As active players in the sustainability space, we think 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 they are still serviceable.

By using existing products longer, people buy less new products. New goods equal more resources needed, more greenhouse gas emissions and, eventually, more waste.

However, the fundamental goal of most producers, especially when it comes to fast fashion, is to make consumers buy more. Those brands consider their resale channel just another marketing tool to keep consumers engaged so they buy more new products. We know that, ultimately, that’s the catch for many—too many—fashion brands. 

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 recommerce, to begin with. Can you smell the greenwashing?

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

Having a resale program should become an essential part of your business and impact strategy. You need clear 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.

3 – Doing more of the same

Resale platforms offer brands a huge 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 weight in the shopping landscape 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 sustainable regulations to 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 sustainable 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 sustainable regulations for the fashion industry:

  • 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 new EU sustainable regulation 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.

Quest Impact Design Studio

Let’s seize the opportunity

 

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Learn from our customers

We’re lucky enough to be working on maximizing the impact of sustainable fashion organizations that are working very hard to positively transform the industry from within:
  • 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 its negative impact disappear soon?

We can only hope that will be the case, but if we’re honest, we don’t think so. This sustainable 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.