There is No “Magic Pill” for Branded Resale

H&M launched a resale program with Thredup this past week. Abi Kammerzell, H&M’s North America’s sustainability lead, summarized the program's rationale in WWD: “Our CEO [Helena Helmersson] set the goal for us to halve our carbon emissions while doubling our revenues. Our goal is to become fully circular.”?

I believe H&M is laudable in its drive to reduce carbon impact while doubling revenue. It will take a lot of work for any company to achieve. There are tremendous carbon-saving opportunities in item production such as less carbon-intensive materials and more renewable energy production. However, these savings per item will not be enough to achieve H&M’s goal. Decoupling is key. To decouple a portion of the revenue growth from new production, which represents 70%+ of a fashion item’s footprint.?

H&M’s ability to capture revenue from selling existing items will be diluted with its partnership with Thredup. If most of the resale revenue goes to a third party, H&M will struggle to meet its revenue goals. While partnerships like this are reasonable steps towards progress, brands will ultimately need to own their pre-owned sales (managed or peer-to-peer depending on the structure) to achieve aggressive sustainability and revenue targets.

Sustainability continued to play a key theme this week. Fashion Dive ’s “5 Ways to Rethink Fashion” was a thought-provoking piece summarizing the need for brands to look beyond NFTs to bring greater agility to the supply chain, transparency to sustainability efforts, and practicality to technology adoption. Sustainability was addressed as a marketing need and increasingly as a legal requirement furthering the need for brands to integrate more circular models.

Richard Kestenbaum ’s article in Forbes, “Chloe Takes A Revolutionary Step In Resale,” focused on digitizing items as a breakthrough in creating more turnkey brand resale programs. Vogue ran a similar story last week, “Can AI make secondhand luxury shopping easier?” Both articles touch on the alluring idea that technologies can save the day. Technology, especially item digitization, will be a massive unlock for resale; however, it won’t be a “magic pill.” Brands will explore innovative resale models that work for their customers and integrate with their brand and other commerce channels. The best way to learn if the model works is in the market.

Ulla Johnson is a great example. They launched a peer-to-peer platform powered by resale provider Archive. The pre-owned site includes sending the Ulla Johnson Johnson team a note of a specific item you want. The feature brings a sense of connection to the brand and advances the notion of unique pieces. Additionally, Gucci expanded its European pilot with the resale marketplace Vestiaire Collective.

Mara Hoffman ’s journey in resale over the last three years was covered in Glossy. Hoffman spoke about the need for more integration in merchandising between new and used, the ability to handle the historic catalog of items, and the implications of product design.

This direction is consistent with the Brand Resale Index released last week. The Index showcases leaders by industry vertical and marketing, commerce, trade-in, and sustainability categories. REI was the overall leader for 2023 across branding, trade-in, and commerce. As Ken Voeller described in last week’s podcast, this wasn’t accidental.

REI spent years working on a business strategy centered around its members and ways to live better outdoors. Moving high-quality gear around between members makes sense. All brands have this opportunity to elevate their business and sustainability intentions and design a business model that rises to meet what success looks like for your brand.

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The So What

1. As brands strive to achieve aggressive carbon reduction goals in light of growth, capturing revenue from pre-owned items will become increasingly important.?
2. Item digitization is an important technology driving resale efficiencies but won’t replace the business model design.?

Until Next Week,

Andy Ruben | Founder & Exec Chair of Trove

Resources:

H&M Launches ‘H&M Pre-Loved,’ Now ThredUp’s Largest Resale Program

WWD

Fast fashion retailer H&M launched its first branded resale platform Tuesday with ThredUp. Now the largest retailer under ThredUp’s business-to-business-to-consumer channel, “H&M Pre-Loved” aims to offer H&M customers an easy way to access secondhand pieces for their wardrobe. This isn’t H&M’s first entry into resale. In 2019, the retailer took a majority stake in resale platform Sellpy, available in over 24 markets today.?

H&M taps ThredUp for resale program

Retail Dive

Indicating the continued rise of recommerce, H&M has teamed up with ThredUp to launch its first resale service, “H&M Pre-Loved,” according to a Tuesday press release. Starting Tuesday, the fast-fashion retailer will begin offering used items across various categories such as sport, denim and kids. Shoppers can also buy from a “collabs” section featuring items from H&M’s previous guest designer collections and collaborations. The program is part of the fast-fashion retailer’s efforts to extend the use of its products and establish a circular business model.

Ariat Has Launched Its Own Secondhand Marketplace in Partnership With Archive

Yahoo!

The California-based company announced today that it has partnered with resale tech company Archive to launch a secondhand marketplace for its products. The Ariat Reboot site is powered by Archive’s digital platform, though it lives on the Ariat.com website. Initially, the product offerings will be limited to Ariat’s English and Western boots for men, women and kids.

Chloe Takes A Revolutionary Step In Resale

Forbes

As the stigma of buying and wearing used clothes and accessories diminishes, what happens next in the resale business becomes important. Resale is unique for a lot of reasons. It's especially instructive to look at what luxury brand Chloe has recently done. Conceptually, Chloe created a process to enable consumers to sell their things almost as easily as they bought them.

Can AI make secondhand luxury shopping easier?

Vogue

AI startup Sociate has developed a new generative chatbot that aims to improve the shopping experience, rolling out with the resale platform Hardly Ever Worn It. Despite advances, the tech remains a hard sell.

Mara Hoffman on the future of branded resale

Glossy

Hoffman and her eponymous brand launched a branded resale program in 2020, making it among the first to embrace a trend that dozens of other fashion brands are now following. In the last two years alone, resale tech companies like Recurate, Trove and Archive have launched the branded resale programs of more than 100 fashion brands. Branded resale is now table stakes, but the new question is: Where do brands go from here? According to Hoffman, brands should next work to integrate their resale and retail businesses, rather than keep them separate.

Fashion makeover: 5 ways to rethink the industry in 2023

Retail Dive

Fashion is having a bit of an identity crisis in 2023, and it’s about time. Three years after the pandemic hit, fashion’s tectonic plates seem to have shifted, and brands grapple with a new, unfamiliar landscape. At the high end of the sector, luxury is coming off a stellar cycle that kicked off in 2020, when consumers with disposable income turned to revenge spending because they couldn’t travel or dine out. Now, that gravy train may be stalling out, as the sector faces the same disruption felt across the fashion industry.

Gucci makes the move into pre-loved with Vestiaire Collective

The Industry Fashion

The Gucci Preloved service employs Vestiaire Collective's SaaS platform to offer a personalised service whereby customers can take their bags to participate Gucci stores to be evaluated and valued. Valuation requests can also be submitted online. Should customers wish to trade their pre-loved items in, they will receive store credit at the participating boutiques which are currently in France, Italy, Germany, Spain, Austria and Benelux. However the pre-loved bags, which have been traded in via the service, are available to purchase globally (including from the UK) on the Vestiaire Collective platform.

Ulla Johnson Partners With Archive on Resale Program

WWD

Womenswear brand Ulla Johnson has teamed with resale platform Archive to roll out Ulla Johnson PreLoved. The program aims to “bring personalization and clienteling to the resale experience,” the companies said, adding that the program includes a “Heart’s Desire” feature that lets shoppers put in requests for Ulla’s team to search for “the ones that got away” from past seasons. There’s also “Ulla’s Archive,” which features pieces from the designer’s personal collection. Sale proceeds from Ulla’s Archive go to Dress for Success — a nonprofit that is dedicated to empowering women.

Ulla Johnson launches resale with a clienteling twist

Vogue

New York-based womenswear brand Ulla Johnson is introducing an in-house resale programme, leveraging a mix of technology and clienteling to promote circularity to its customers. Ulla Preloved, developed in partnership with resale tech company Archive, will facilitate peer-to-peer sales. Customers who sell their Ulla Johnson pieces through the platform can choose the price (a recommendation will be provided) and whether to receive 70 per cent of that back in cash, or 100 per cent in credit for the brand. It also has a clienteling element, ‘Heart's Desire’, which lets consumers put in requests for the Ulla Johnson team to source past-season items. The aim is to provide resale shoppers with the type of experience typically reserved for personal stylist shopping or VIP services.

Trove resale report points to huge growth potential, but sector remains a work-in-progress

The Fashion Network

Resale specialist Trove launched an inaugural special report on Tuesday. Called Brand Resale Index: Defining The Resale Experience, it claims to be the first report of its kind to dive deep into the market and evaluate leading practice adoption at an “inflection point” for resale. Findings include resale not being quite a sustainable as it would like to be, but the potential to become more green being there; and brands not integrating pre-owned product with new often enough. The Index’s aim is to be an annual benchmark of the industry’s progress towards brand resale with in-depth performance assessments of 40 leading brand resale programs, covering fashion/apparel, outdoor, footwear, and luxury.

REI Scores Highest on Recommerce Index

Multi Channel Merchant

Outdoor co-op REI, high-end outdoor apparel/gear brand Arc’teryx, fashion brand Amour Vert, running supplier On and luxury brand Philip Lim stood out in the first recommerce leaders index compiled by Trove, as the growing category has added an estimated 100 programs in the past year. The resale market for apparel alone grew an estimated 30.1% to $182.4 billion in 2022, according to GlobalData, and is growing at 5X the rate of retail, reports the Ellen MacArthur Foundation, which tracks the circular economy. REI was the overall leader, with 72% of the top practices tracked across brand positioning, commerce, trade-in and business model integration, according to Trove and OSF, which gathered the data from 40+ companies. The retailer has been conducting in-store “garage sales” for a long time, and brought its Re/Supply program online in 2017. “REI has since integrated the program into its co-op membership program as a core benefit and is a leader in omnichannel commerce and trade-in,” according to the index.