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Revolutionising the clothing re-commerce market, some players take lead

"As re-commerce, when particularly executed by partners, unleases a low-risk, high-reward market for goods, and offers a straightforward path into a more circular business model, clothing brands are increasingly turning to re-commerce partners to tap into secondary markets. As thredUp's 2018 Resale Report indicates, the secondary retail apparel market in India, currently valued at $20 billion, is projected to grow by 15 per cent annually over the next five years. The country offers tremendous opportunities in secondhand clothing sales, with branding making a margin on selling the same garment multiple times while maintaining its quality control."

 

Revolutionising the clothing re commerce market some players take lead 001As re-commerce, when particularly executed by partners, unleases a low-risk, high-reward market for goods, and offers a straightforward path into a more circular business model, clothing brands are increasingly turning to re-commerce partners to tap into secondary markets. As thredUp's 2018 Resale Report indicates, the secondary retail apparel market in India, currently valued at $20 billion, is projected to grow by 15 per cent annually over the next five years. The country offers tremendous opportunities in secondhand clothing sales, with branding making a margin on selling the same garment multiple times while maintaining its quality control.

Four companies are catalysing the secondary apparel retail markets in India…

ThredUp

The company offers customers the opportunity to either receive cash or store credit in exchange for their clothes. Its new program UPcycle offers an additional 15 per cent in value if sellers select payment in the form of a partner brand's gift card. If a brand agrees to drive traffic to its online thrift store and pay the 15 per cent bonus to sellers, it can drive sales to returning customers without even touching the used clothing. ThredUP manages apparel intake, pricing, marketing, selling and shipping. The program has been initiated with only one brand partner; the sustainable apparel company Reformation. But ThredUP will announce its second partner soon. The company plans to form 10 new partnerships next year.

Yerdle Recommerce

This company offers a white label service to its apparel retailers — including Eileen Fisher, Patagonia and REI — which enables brands to develop anRevolutionising the clothing re commerce market some players take lead 002 online re-commerce marketplace under their own names, without investing in a new website and warehouse or straying from their core competencies. These brands encourage customers to return used goods in exchange for store credit. These goods are then repaired and refurbished by Yerdle enabling apparel companies to sell them again under their own brands in their own online stores, complete with warranties, customer service and return policies.

The Renewal Workshop

This is a fully outsourced re-commerce service which manages the reverse logistics, repair, cleaning, quality assurance and resale of used clothing to companies such as the North Face, prAna and Icebreaker. To avail this service, apparel brands pay a processing fee at a rate comparable to apparel waste management and can sell "renewed" clothing in their stores or on the Renewal Workshop's website under a revenue-sharing agreement.

The RealReal

An online consignment store that targets the luxury resale market, this was set up in a founding partnership with Stella McCartney. Aiming to be the first $1 billion circular-economy company, this store offers its sellers that consign pieces from it a $100 Stella McCartney gift card. Similar to thredUP's approach, a financial incentive drives sales back to the company, while also giving apparel a second life.

RealReal recently launched an online "sustainability calculator" to quantify its impact. An initial calculation found that the 2.5 million women's clothing items consigned to the RealReal since 2012 have offset the equivalent of 65 million car miles worth of greenhouse gases and energy.

So far, only a handful of companies are embracing re-commerce. Many fear that by making refurbished versions of their products available, they'll curb sales of new ones. Whether brands will embrace re-commerce at scale, or if this trend quickly goes out of style, only time will tell.

 
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