In a shift from even a few years ago, fashion brands have begun actively seeking ways to participate in the “circular economy,” a term that reflects the trading, re-selling and borrowing of apparel and accessories that have previously been worn by someone else.
While neither the clothes nor the platforms are entirely new, the active participation from brands certainly is. But it’s not only because the sustainability conversation has become fashionable. Secondhand has largely lost its stigma, and brands are seeing business incentives to tap into the estimated $20 billion resale pie — a figure that doesn’t even include the rental market.
The latest such launch is cool eco-chic brand Reformation, which on Tuesday begins a partnership with resale site ThredUp that will give ThredUp resellers the option to be paid in a Reformation gift card — with an added incentive (through December, at least) of a payout that is 15 percent more than what ThredUp would normally pay. Normally, sellers to ThredUp can choose between PayPal cash or ThredUp credits.
ThredUp declined to share an average payout amount, saying it could range from $5 to $1,000, depending on what types of items the seller sends. Payouts are based on what an item can sell for; for example, if ThredUp is able to charge $50 for a piece, it will pay the seller 40 percent of that value ($20), or if it is a luxe item, the seller will get 50 percent, or $25. (The payout percentage increases with the value of the items.)
The program offers value for both Reformation and ThredUp: Reformation gains potential new customers and additional sales by attracting shoppers with a gift card, and ThredUp is able to drive more secondhand supply. (ThredUp pays out the value they normally would for the gift card, while Reformation covers the additional 15 percent.)
“Retailers are realizing that through this program, they can launch a loyalty program that is good for the planet and good for business,” said ThredUp vp of marketing communications and partnerships Karen Clark. “Sometimes they don’t need to be mutually exclusive — customers are incentivized to resell.”
The program, called UpCycle, will eventually be extended to other brand partnerships, but Reformation — which started with repurposed secondhand clothes, and still has a sustainability ethos — was a natural fit to test the format. “We started Reformation to create a sustainable way to be fashionable, and because we believe consumers have the buying and selling power to eliminate waste,” said Reformation founder and CEO Yael Aflalo, who added that UpCycle adds ways to shop responsibly.
Clark said that in the past year, ThredUp has seen a “surge of interest” from brands wanting to take an active role in fashion resale.
“Brands are saying, ‘We get that resale is accelerating, and customers are telling us they want ways to dive into this circular economy and have more affordable options — so how can we get involved?,’” Clark said. “A lot of the companies we have talked to that have tried to power their own program have a lot of trouble, because they don’t have the operational infrastructure to price and list hundreds of thousands of products a day.”
In 2019, Clark said, ThredUp will begin powering secondhand shopping experiences, meaning that brands will be able to offer their own clothing recycling programs using ThredUp’s technology and infrastructure, and will be able to offer used clothing next to new items.
“The line between used and new is blurring, and the closet of the future has a lot of used clothes in it,” Clark said, adding that a re-sell program keeps the inventory fresh without being fast fashion or compromising on quality. “Consumers are looking for retailers that are able to replenish inventory frequently and we have an endless supply chain. You don’t have to produce it and wait six months, because we are getting new clothes every day.” This model could be online — a brand sells previously worn pieces on the same site it sells new items — or through a physical store-in-store, with a section that is “powered by ThredUp,” for example, Clark said.
Brands such as Patagonia, The North Face and Eileen Fisher offer various versions of trade and reuse programs, but high-fashion brands might be next to catch on.
In September, Burberry announced it would stop destroying unsold inventory and would increasingly focus and expand on existing efforts to “reuse, repair, donate or recycle unsaleable products,” including a partnership with the Make Fashion Circular Initiative and a partnership with sustainable luxury brand Elvis & Kresse to turn leather “offcuts” into new products. At the time, Burberry CEO Marco Gobbetti said “modern luxury means being socially and environmentally responsible.”
This has been part of the Stella McCartney brand’s identity since its founding in 2001. It became the first brand to partner with luxury re-commerce site The RealReal to reward customers for consigning pieces: If a seller consigns a Stella McCartney item on The RealReal, she gets a $100 Stella McCartney gift card, and can only qualify for this perk once a year. Director of marketing Allison Sommer said there have been an equal number of these being rewarded month over month in the year since the program has existed, indicating increased awareness and adoption.
Since then, other brands have come calling.
“Sustainability is a fashionable topic,” said Sommer. “There’s a shift in the frequency in conversations around sustainability, plus from a business perspective, the number of outreaches from brands looking to partner with us or understand our ethos has definitely increased and shifted in tone. When I joined a few years ago, there was a lot of uncertainty into how we fit into luxury fashion, and all of a sudden, we are getting inbound requests from designers wanting to learn more about how our partnership with Stella is doing and how it is structured.”
On Monday, The RealReal introduced a “sustainability calculator,” which is a tool that works to quantify approximately how much greenhouse gas, energy and water is saved from each piece of women’s clothing that is consigned. Sellers have access to a personal dashboard that estimates how many car miles they’ve offset, how many seedlings they’ve planted and how much water has been saved, using attributes such as weight, fabric and type of garment.
Sommer predicted a “giant shift” in the next five years in how brands will approach circular fashion. “It’s just a matter of time before everyone has to and wants to have sustainability as a tenet of their brands and products,” Sommer said. “At this point, we don’t need to spend time convincing everyone — the customers are doing that themselves as luxury brands are struggling to keep the top funnel of customers.”
Rent the Runway execs have witnessed a striking about-face, as brands are eager to be available on the clothing and accessories rental marketplace.
Among the 50 new brands to Rent the Runway this fall are Marc Jacobs, Victoria Beckham, Iro, Golden Goose, Reformation and Philip Lim, totaling 500 brands available to borrow.
In a walk-through of Rent the Runway’s new San Francisco space in September, chief operating officer Maureen Sullivan said fashion brands now see the company as a marketing tool to help brands “unlock” new customers; about 98 percent of Rent the Runway customers have never worn the brand before when they rent a piece, she said.
This is a stark contrast to when the company started in 2009, when co-founder and ceo Jennifer Hymen struggled to convince brands that luxury rentals wouldn’t cannibalize a business. “When I joined three years ago, Jenn joked that it was the golden years. Now brands love us a partner,” Sullivan said.
