Circular Fashion is The Future: Recommerce + Recurate

Betsy Stewart

The Jeopardy clues would read something like this: It will grow 11x the rate of standard retail by 2025. The market could reach $77B in the next five years. Both consumers and investors are very interested. Sustainability advocates signal support. And from Levis to Lululemon, big brands are getting on board. For this emerging biz, the buzz is certainly about: What is recommerce? 

In a nutshell, we’re talking about powering the re-use of goods (Medium). Recommerce, or circular commerce, includes reselling and renting products from fashion to furniture. There’s no shortage of secondhand stuff, especially apparel. Full-service resale platforms like Recurate have emerged to address the influx of interest. According to Retail Touchpoints, related technology startup Trove raised $77 million in funding during August 2021. Modern thrifting is big business.

While not a new idea, fashion-forward resale is getting a makeover: tech-led, elevated, and easy in process with an ethos that reflects a broader social preference towards more conscious consumption. The genesis of interest points to increasing consumer interest in sustainability, not surprisingly led by younger generations, particularly Gen-Z. Alpha up next. With an emerging buying power, elevated environmental concern, preference for transparency, and serious digital shopping savvy, the buyers behind boomers can sway brands - and retail trends. 

Apparel-specific stats are a bit boggling: Each year, 100 billion items are manufactured for 7 billion people. Another commonly quoted figure indicates that every second, a garbage truck of clothing is dumped in a landfill or burned. 10% of the world’s carbon emissions can be attributed to the fashion industry. The importance of a revised business model is clear. 

So how can an industry that prides itself on the next look, the next collection, the next season get sincerely onboard and address the dichotomy of a buy ‘n toss culture? Fast fashion has quickly become prickly and greenwashing (brands taking advantage of unsubstantiated or minor sustainability efforts) abounds. 

While there are issues to address within every aspect of the clothing industry from production (ethical sourcing and labor practices) to disposal (disassembling/recycling garments is difficult and energy-intensive), re-envisioning retail through recommerce is simple and impactful: buying a pre-owned item of clothing is more eco-friendly than producing a new one. “The most sustainable product is the one that already exists,” says Adam Siegel, Founder and CEO of Recurate.

Brands ultimately need to reconcile producing less. Prioritizing sustainability through circularity is the way: slow down new manufacturing, produce high quality clothes that can be worn for many years (by multiple people). “The whole goal is that you develop these business models that incentivize really high-quality, long-lifecycle products, and therefore you end up selling fewer new products,” says Vanessa Barboni Hallik, Founder and CEO of Another Tomorrow. “We believe in that; we're comfortable with that.” 

In line with a broader trend towards transparency, retailers and shoppers are rethinking how items are produced and consumed. From a sustainability perspective, secondhand makes sense: buying pre-owned does make a difference. In a review of thredUP’s operations, purchasing an existing garment as compared to manufacturing a new one reduced carbon emissions, energy demand, and water consumption by around 84%, 88% and 98% respectively.

Participation in a circular business model—decoupling economic development from resource consumption—in the fashion industry benefits both sides of the purchase equation. As an important aspect of a brand’s overall sustainability strategy, recommerce is also a lucrative opportunity to capture and supply new demand; the longer an item lasts, the more revenue it can generate, being sold and resold and sold again. Additionally, recommerce fulfills consumer aspirations to reduce personal environmental impact, save money, and access frequent (not fast) fashion.

Pre-Ebay, resale was limited, localized to thrift stores and swap meets. “Technology has really been able to scale resale — recommerce is truly that intersection of resale and technology,” says Karin Dillie, VP of Partnerships at Recurate. “It makes buying pre-loved items more accessible.” This accessibility is key to serving a huge and varied market. 62% of Gen Z and Millennials say they look for an item secondhand before purchasing it new. Eileen Fisher, Frye, and Patagonia, among many others, already have hubs for selling used items - to existing and net new customers. 

There’s no one way to do recommerce. The landscape of enablement solutions is expanding and options for various formats (peer-to-peer, take back, brand supply) of reselling exist. As with any new market opportunity, customizing a platform that best reflects a brand’s style and values is important. Excitingly, the capability to own the process and data is here: rather than rely on a 3rd party marketplace, brands are bringing resale in-house — and can participate without building out an entire infrastructure. Integrating directly into an ecommerce platform allows the capability to reach interested buyers, manage quality-control, enable digital authentication, and design the customer experience. 

Brand-led recommerce raises label awareness, stimulates responsible purchasing, and keeps customers engaged. Recurate, a leading circular economy technology company that offers brands an ecommerce solution to capture second-hand sales, puts it quite simply: More customers. More sales. More sustainable. According to Dillie, “Brands who launch in-house resale programs can create substantially more loyal, more frequent customers than brands who don’t.” 

With an environmental imperative as impetus, thrifting is going mainstream. Consumers driven by values, value, and style are powering the surge of recommerce. Brands driven by image, margins, and reinvention are responding. Thanks to technology, forward-thinking fashion resale offers an opportunity for both brands and buyers. (And if you can help the earth by shopping, why not?)

Join us on the latest episode of Commerce Confidential. Karin Dillie, VP of Partnerships at Recurate talks about recommerce, the circular economy, and launching branded resale.