Latest / Talk Commerce / How to Embrace Sustainability in Fashion: Recurate's Resale Solution
Transcript
- Brent Peterson (00:02.508) Welcome to this episode of Talk Commerce. Today I have Wilson Griffin. He is the CEO and founder of Recurate. Wilson, go ahead, do an introduction. Tell us your day -to -day role and maybe one of your passions in life. Wilson Griffin (00:15.876) Yeah, pleasure to be here, Brent. Thanks for having me on. So I'm a co -founder and CEO at Recurate. We're an early stage startup that helps brands to manage their own resale programs, meaning to sell not just new items on their site, but actually selling secondhand items as well. And I'm sure we'll talk about what exactly that means. As far as my background, prior to starting Recurate, I worked in a number of different sustainability conservation jobs across multiple industries. Starting my career in the sustainable agriculture sector, working with tropical commodity supply chains, think coffee, cocoa, tea, bananas, et cetera, and helping large corporate buyers to procure sustainably grown and harvested agriculture crops. transitioned from there into a sustainability and innovation role at Gap Inc. So the parent company Gap, Banana, Old Navy, Athleta, and got to do a number of really cool things. And that was really sort of what set the stage for me to eventually start Recurate and just understanding the opportunity that exists for brands to really embrace and engage the secondhand economy and circularity. And over time sort of pivot their business models away from just this purely linear manufacturer, sell, and eventually dispose of products into one that's just a really different relationship with products and customers and really enabling and facilitating multiple life cycles for each item that they manufacture. That might've been a little more long -winded than you intended, but I get really excited about this stuff. Brent Peterson (02:04.526) No, that's great. Thank you for that. So before we get started in content, and we're going to talk about the resale market and how you're helping that, but you have a volunteer to be on the free joke project. And so all I'm going to do is tell you a joke. And all you have to do is say, should just joke be free or maybe a better one? Is this joke resellable? Or do you think at some point this joke should just go into the trash heap? So here we go. All right. Wilson Griffin (02:34.392) Sounds good. I think just about everything is resellable. So we'll see where this goes, but I'm excited. Brent Peterson (02:39.758) I got thrown out of my local park after trying to arrange the squirrels by height. I guess they don't like me critter sizing. Wilson Griffin (02:51.04) Ooh, I'm biased here, but definitely resellable. Let's put it on a t -shirt and we'll sell it as many times as possible and keep it in circulation. Brent Peterson (02:55.83) Well, good. Brent Peterson (02:59.822) All right, t -shirt. I might take advantage of that with the $14 sticker mule deals that come up time to time for free t -shirts. All right, so thanks for the introduction. That was great. Tell us a little bit about, maybe we could start with the problem of why you exist. Wilson Griffin (03:09.878) Love it. Wilson Griffin (03:25.156) Yeah. Yeah, absolutely. And I think the best way to answer that is kind of on two fronts. Um, you know, we're, uh, we're a business to business software product. So our customers and clients are brands. And then obviously by working with those brands and retailers, we connect with those, the customers of those brands and retailers. So we kind of have clients as brands, and then we also have end customers, uh, the sort of sustainability challenge and. From my background, I'm sure you heard it, sustainability and environmental conservation are issues and challenges that are really important to me. The apparel supply chain fashion in particular, but this is true of other industries as well, is it has a massive, massive environmental footprint. Just the amount of raw materials and resources that go into manufacturing the products that we buy. So I believe that we have a duty. Um, brands, folks like us that are enablers to make sure that whatever is manufactured is optimized and used to the greatest extent possible so that hopefully we can make a little bit less stuff, which would reduce the overall environmental footprint. So what that means is on the customer side, we want to bring more people into the circular economy and resale. Obviously. places like eBay, Poshmark, Craigslist, Facebook Marketplace, a lot of people are buying and selling goods secondhand. But there's a lot of people that don't. There's a lot of people that clean out their closet and bag it up and throw it in the trash. And there's a lot of products that could be resold that are not being resold. So the problem we're trying to solve from a customer perspective is... uh, just sort of expanding the tent, so to speak, and bringing more people into the resale economy, both as sellers as well as buyers so that we can extend the life cycle of these products, keep them in circulation longer, and hopefully become a little bit less dependent on just manufacturing new stuff. The problem for brands and retailers, which is a really key component of this ecosystem, is that historically they have been completely cut out of Wilson Griffin (05:46.884) the resale economy. People are buying and selling again on all those platforms. I mentioned eBay, Poshmark, you know, local vintage shops, garage sales, whatever it might be. And brands are not benefiting in any meaningful way from that. They don't know who those customers are. They're not making any money from those sales. They're not generating any track, any traffic to their websites from those sales. It's happening completely outside of their. sort of knowledge and ability to influence. What that means is that brands aren't really incentivized to help their customers to participate in the circular economy, to extend the life cycle of their products, because they're not going to benefit. And these are big companies and what they want to do is grow, sell more and grow their revenues over time. So what we've set out to do is help those brands to participate in this. So all of a sudden brands are incentivized to make higher quality goods that will last longer because they're actually going to benefit from the second, third and fourth sales. Um, and also to just give their customers more ways to interact with that brand, to grow, to, um, yeah, grow deeper connections with their customers and more loyalty, deeper relationships. Um, so. You know, the, the problem in short is that we're trying to keep more, more products in circulation, reduce the environmental footprint of the industry. Then we kind of try to look at it on these two fronts of the individual customer and making it easier for them, but also creating a system where brands benefit so that, uh, so that those brands will, um, incentivize those customers. Brent Peterson (07:28.59) I'm digging in a little bit on the problem again. So I've heard that. some cotton that's grown and picked in the south of the United States gets shipped over to say Indonesia and spun into string or into thread and then it gets shipped to another place like Vietnam or to China or Mexico made into a t -shirt then it gets shipped to the U .S. and sold as a t -shirt and then somebody discards it and it may get recycled and then shipped to Africa where it may go into a landfill or who knows. Is that is that kind of the life cycle right now of a typical garment? Wilson Griffin (08:08.1) Yeah, I would say that's, that's representative. Um, yeah, there are certain parts of the world that sort of specialize in the growing of raw materials, you know, cotton, and the example you just shared, there's other parts of the world that specialize in some of the other sort of upstream parts of the supply chain. And then eventually you get into cut and sew and, and the final stages that often takes place in Southeast Asia. And then, yeah, you're right. Those products are shipped all over the world. Um, it is a truly global. supply chain and there's a lot of impact that comes with that. Also, the climate is changing and it can be difficult to project forward and understand all the consequences of that. But a crop like cotton is incredibly thirsty. It takes a lot of water to grow cotton in this example. So if we can become again, a little bit less reliant on, um, on using virgin cotton and only manufacturing new products, um, you know, it'll make some of these water stress regions, um, a little bit, uh, um, give them more opportunity to use water for other uses, whether it's drinking water, whether it's, um, for sanitation, um, as opposed to all of that water growing to going to growing crops like cotton. So yes, it is, there is a real. environmental component to this and then there's a real human component to this because people live in all of those communities where that supply chain takes place and there can be some really negative consequences. Brent Peterson (09:48.472) So last week at ShopDoc you announced Resale OS 2 .0. Tell us about what that means and how you're leveraging technology to help improve this problem that we've just been talking about. Wilson Griffin (10:04.58) Yeah, terrific. So we've been, we've been at it for about four and a half years at Recurate and we're on a sort of constant quest to just improve our product and the services that we offer to brands. So what we do is create secondhand marketplaces on our brand site where individuals are able to list items for resale. Brands can take back items from their existing customers, help repair them, and then sell them a second time. Any returns or imperfect inventory can also be sold through these collections. And then the brand is actually the one selling these products. And it's a really nice customer experience, both for individual sellers as well as for buyers. So we're constantly looking at. how we can support our brands with better tools for them to run these programs. So we've been able to reduce the time it takes for us to launch a new brand from what could in some cases be a couple of months in the past, even more, three, four months. We can now help a brand launch in hours, in some cases minutes. It's super easy for brands to start one of these resale programs. We also are helping them by integrating directly with either the brands, warehouse, 3PL, logistics system, or operational partners that we use, which means that it's just becoming more cost effective if the brand wants to take lightly damaged inventory, repair it, and then sell it again. And a huge part of that is connecting to the existing logistics network that brands have. Another piece of it is just making it sort of more exciting and delightful for individual customers to, um, shop these marketplaces, giving them more information about the products that they're browsing. Uh, one cool tool that we're excited about is what we call sort of seller influencer closets. So if I'm a huge, um, ambassador for a particular brand, maybe I have 15 items in my closet from a single brand. Wilson Griffin (12:27.044) And maybe I decide that I'm ready to sell for six of them. I'll kind of get my own mini collection on that brand site with a customized link. And, you that's my sort of Wilson's closet at whatever brand it might be. And I have those five things for sale and I can share that with my community. I could share it on social media. I could really post it anywhere I would like to drive some traffic to it, but also, you know, if there's somebody who has a similar set. a size to me or similar style to me. Um, I'm personally, I'm not much of an influencer, so this isn't a great tool for me, but you know, there are people out there. Um, so that's a cool one as well, just to make it a little bit easier for sellers to promote their listings and for buyers to kind of, um, you know, shop in that way. Um, and then the last thing I'll touch on, cause I think this one's really cool. Uh, the way that we, uh, work with brands is we've. We fully integrate into their sort of e -commerce ecosystem tech stack. Uh, what that means is that we have access to a lot of that brand's information as far as, you know, customer purchase history, the brand's catalog. So you can imagine a scenario where a brand has maybe an unexpected hit in, in one of their products. They made this amazing bomber jacket and it just, it went viral and it sold out really quickly. Uh, historically brands would kind of have to throw up their hands and wait until they could, um, you know, push into more inventory because they don't have any more to sell. Uh, we've created a really easy tool where based on that product, we can actually reach out to the customers who have already bought it and say, Hey, you know, we know you bought this jacket. Uh, people love it. We hope you love it and you're wearing it every day, but just so you know, If you're not, you can actually come back and sell it. And we know that there's unmet demand for that exact jacket that you have in your closet. Obviously, you know, a lot of people will still want to wear it, but some people might come back and maybe it's not their style, whatever it is, doesn't fit exactly how they expected. And they can now sell it. And all of a sudden the brand has access to more inventory for this really in demand product that they otherwise wouldn't have. And in our opinion, really all parties benefit from that. Wilson Griffin (14:51.458) You have these customers who are going to be able to get a product that they're excited about. You have the brand able to make more sales and satisfy more demand. And then for that seller who didn't love the item, they're actually going to earn store credit that they can put towards something else. So for us, it's really a win, win, win. And one of the features that we get really excited about. Brent Peterson (15:10.606) Is there a non -branded option for this? Let's just say somebody has a little store they want to start up and integrate, like you said, one of the boutique vintage shops. Is this a place for that or is this only for the big brands? Wilson Griffin (15:24.908) Yeah. Yeah, it's a great question. You know, where we are today, we really have focused on brands and retailers that have an existing e -commerce presence. I know there's actually some other startups that are working to help, you know, offline vintage, brick and mortar vintage to create an online presence. That hasn't been a focus for us. We have been, you know, really, we look at those. large mid -market, mid -market plus and enterprise brands as sort of our core clients. Never say never over time, we may look at what we can do to support those vintage stores, but it hasn't been a focus for us up to this point. Brent Peterson (16:11.438) I know that for the resale OS 2 .0, you have a modular approach to how brands can work. How does that fit in for their infrastructure and what they're using and what they're not using? Wilson Griffin (16:28.324) Yeah, great question. So when we talk about, you know, a modular approach and having these resale components, uh, I think, you know, maybe just some examples can bring it to life. A lot of people are familiar with peer to peer resale, you know, imagine eBay or Poshmark style resale. I list an item, I put it back in my closet. I wait until it sells. Once it sells, uh, I ship it to that buyer. At Recurate, we facilitate that type of resale. which we call peer -to -peer. But there are other resale models as well. You can think of some outdoor brands that have really strong warranty programs. Maybe the brand is collecting warranty inventory, it's slightly damaged, and they want to repair that inventory and bring it back and sell it again on their website. So it's more sort of a take -back repair model. That would sort of be a component or module that we could enable. Some brands have a really big issue with lightly used e -commerce returns. So somebody accepts the item, they wear it a little bit, and then they try to return it. The brand has a generous return policy, but now they have this item they can't really sell as new and they don't know what to do with it. So e -commerce returns is another inventory source. And we have this sort of modular approach, meaning, you know, some brands are really excited about peer to peer and that's where they want to start their resale journey. So we can get peer to peer set up, but maybe over time, they also want to add in a repair component or bring in some of these e -commerce returns. And the way we've built our platform is it's super easy to sort of turn those different channels on and off and help brands over time grow their programs and bring in these different streams of inventory without necessarily over -engineering it on day one and sort of just having this. you know, monolithic product that we give to the brand. Instead, we want to sort of give you this menu and you can choose what makes sense for you, your product category, your customers. And we were really excited about that just as far as our ability to launch brands quickly, grow them over time and sort of meet them where they are and give them the exact tools that they need to be successful. Brent Peterson (18:47.202) Tell me a little bit about how the buyer experience works. You can share, I think you can share in the cart new and lightly used items. As a retailer, you could have items for sale that people could buy for both new and used. Tell us how you kind of integrate that buying experience. Wilson Griffin (19:09.22) Yeah. Um, and this is probably one of the coolest parts about our product. So we like to talk about full integration of resale. And what that really means is that on the brand's primary website, um, you can actually shop new items and use items next to each other. So of course they would be merchandise slightly differently. They might exist in different collections and there's different navigation on the header for that brand. But all of the resale items are going through the exact same checkout flow, the exact same add to cart experience. We're leveraging original brand photography, original brand information for these resale items. Um, and that's what we call full integration. So we're there is in a, uh, new product shopping site and then a separate pre -owned resale shopping site. Everything is seamlessly integrated and brought together. Um, and one of the best parts about that experience is, um, is exactly what you described where a customer can actually add a new item to their cart, navigate over to the resale part of the brand's website, browse the resale items, find one that they like, add that to their cart. And it's one single checkout. And we actually find for some of our, our brand partners that the mixed cart rate, as we like to call it, um, is sometimes upwards of 30%, meaning that. Um, over 30 % of resale purchases also include a new purchase in that same shopping cart. Um, which is just really cool. Um, because it is a pretty innovative new experience that, um, brands haven't been able to offer before and customers haven't been able to offer our experience before. Um, and for us, it really sort of, you know, de -stigmatizes these secondhand goods if there is any stigma at all anymore. Um, but for brands to offer an experience like that, I think is really differentiated. Brent Peterson (21:08.11) Yeah, and you just launched a new site, Frank and Eileen. I'm on their site right now, and it's called Re -Loved. Tell us about that. Wilson Griffin (21:16.728) Yeah, Frank and Eileen, awesome brand, really nice garments. It's a B Corp, it's women led. So, you know, they really are just a great fit for resale and what we do. And it's also a premium brand. It's a, it's a pretty high price point. So resale can also fill sort of a nice niche. You know, one of the things we talked to our brand partners about is, Yeah. Resale can actually be a way to bring in sort of more value minded customers without discounting your main line products. So typically resale items might sell for 60, 70 % of original, um, price and for a brand like Frank and Eileen that has a number of items that are selling for 200, 300, $400 and more. Um, resale can be a nice way for sort of those younger customers as more value minded customers to engage with the brand, buy the brand, try it out maybe for the first time with a little bit less risk, uh, and then grow over time. Uh, and again, there's sustainability practices are top notch. We've met their sustainability team. Um, yeah, they're amazing. Super proud of them. We just launched this week and, uh, the customer feedback has been amazing. We saw hundreds of sales. Uh, hundreds of listings, you know, in the first 24 hours after we launched. So, um, it's one of those instances where, uh, you kind of tell the customers were waiting for it and they were excited about it. Um, and as soon as we sort of released it to the world, they just, they jumped on it and it's been really fun to watch. And, um, yeah, awesome team over there at Frank and Eileen. They're great to work with and yeah, super excited to grow that one over the next few years. I think it's going to be a real success. Brent Peterson (23:00.11) They use the word slow, support slow sustainable fashion. How does the slow fit in there? Wilson Griffin (23:06.98) Yeah. Yeah. I love that. Um, obviously, uh, you know, slow there's intended to, to illustrate the difference, um, between, you fast fashion, you know, uh, I won't name any names, but we all know what that means. Um, and the type of brand that, that Frank and Eileen is, and, you know, to me, what that means, and I'm sure it means something a little bit different to everyone is, you know, really high quality products. They're going to last. They're classic styles that aren't going to be, you know, off trend and just a few weeks, um, using sustainable practices, making sure that all those workers in the supply chain are treated well and paid fairly. Um, you know, if you go on some of these fast fashion sites and you can buy t -shirts for 4 .99, that math just doesn't math for me. I don't understand how we can pay for the raw materials, the people to do the labor. All the shipping and transit that comes with that product. Like I just don't, I don't know how it works. Um, so I think, you know, really what slow fashion does is it, it contrasts that with, you know, Hey, we're doing things the right way. Yes. It might cost a little bit more. Um, but the actual value of that item, how long it's going to last. Um, you know, I think it's an investment worth making. Brent Peterson (24:26.99) I think one of the things that you offer is a concierge listing service. Tell us a little bit about how that more of a, it sounds like it's more of a hands -on for you. How does that work? Wilson Griffin (24:40.58) Yeah. Yeah. So, you know, I spoke a little bit earlier about, you one of our goals as a business is to help more people to participate in the circular economy. Anyway, there are some customers out there, especially younger customers that are super comfortable engaging online, using their phones to take photos and list items. And, you know, there are people out there who will, you know, go shop in in -person vintage, and then actually flip those items and sell them online. So they're really sophisticated resale customers out there. But we also recognize that there's a lot of people who maybe have, um, items that would be terrific for resale in their closet or their garage, but for whatever reason, whether they're time constrained, whether they're not comfortable, you know, they've never sold resale before and it's not something that, um, they would be comfortable doing. um, you know, using their phone or their laptop. Uh, so what our concierge listing service does is it allows somebody to create a resale listing just by using texts SMS on their phone. So you can imagine that, um, you know, there's a, you got a text that says, what are you looking to sell? You share some information about it. Uh, we'll ask you what the condition is. We'll ask you to snap a couple of photos with your phone. But you don't need to navigate to an online portal or anything like that. And you just attach the photos in the, in the text thread. And we can sort of pull out all of the necessary components of a resale listing just from this pretty quick SMS conversation. And then at the end of that, we as Recurate will create that listing for the seller. And it'll be available for sale on the brand's website. So it's just another entry point for customers. Somebody could go through the whole experience purely on tech, sitting on their couch over two or three minutes, and that item will be available for sale. So just another way that we're trying to make it really easy and reduce friction for sellers to participate so they can get their inventory listed, sold, and into the hands of somebody else. Brent Peterson (26:50.126) Do you see this as a good marketing tool looking forward for merchants to now really reach out to their existing customers and even target them after one year or two years or whatever that timeframe is? They know that they purchased some item. They know that that item may or may not be in fashion or whatever the reasoning is. Or maybe they moved from Minnesota, Hawaii and they know they're not gonna need that bomber jacket. It creates a new channel and a lot of opportunities for brands to leverage that seller data and get more of that product back into the market. Wilson Griffin (27:31.908) Yeah, that's exactly right. You know, when we talk to brands, we pitch a few different things as far as the benefits, obviously, uh, one and two resale buyers is actually new to brand. We find that a lot of purchasers are using resale to make their initial purchase with the brand, to try it out for the first time, to, you know, maybe get a lower price point, um, through a brand that would otherwise be outside their ability to purchase. So we talk a lot about that new customer acquisition on the purchase side. On the seller side, what we find is that there's a really big opportunity to reactivate lapse customers and to grow loyalty. Uh, you know, for a lot of these DTC brands, uh, it's a huge hurdle to get customers from that first purchase to a second purchase and subsequent to grow their lifetime value to the brand over time. So what we've found is, you know, if somebody bought something, you know, to your point six months ago, two years ago, they haven't engaged since historically the primary tool that brands had to reengage that customer was just like discount codes. Like, Hey, here's a 15 % off. Oh, they didn't bite. Like, Hey, here's 25 % off. It's not that interesting. It gets old pretty quick. Uh, and you're just kind of sending different versions of the same email over and over. What we found is resale can actually be really compelling for those customers to your point. Uh, you know, we hope you love this item and you're wearing it all the time. If you find that you're not, why don't you come back with a surfer sale? Assuming it sells, um, most of our brands pay out in store credit and gift cards. Uh, so once that item sells, all of a sudden that customer who hadn't purchased in many months or even years now has a gift card that they're going to put, um, towards a new purchase. And the typical gift card up spend for our product is, is, you know, two and a half to four times. Uh, so brands get really excited about that. And now, you know, more important than even the transaction itself is that you've reactivated that customer. You've, uh, brought them back into your marketing funnel and you sort of restarted that relationship. So yeah, there's a huge loyalty component. Um, and again, it's just another tool for brands to reach out and provide real value to their customers to try to put, you know, money in their pocket, uh, whether it's a gift card or cash. Um, Wilson Griffin (29:54.724) and just give them a differentiated experience then just pinging them with discount codes over and over. Brent Peterson (29:58.894) What do you think now going into the rest of this year, the next three quarters of 2024, what are brands looking at and what can they do to help move the needle on the sustainability? Wilson Griffin (30:17.892) Yeah. Yeah, I think there's, there's a number of things that brands can do. You know, one thing that just sort of sticks with me is it can be expensive to invest in sustainable practices in your supply chain. And I think that that's a great thing for brands to do when they should, you know, things like buying better materials, making sure that they're working with factories that use really good practices. You know, all of those things are really important. But the beginning of our conversation, there is a large environmental footprint for every new product that's manufactured. And by offering your customers secondhand products, as well as new products, what it does is it provides opportunities for brands to grow their revenue disproportionately to their environmental footprint. There really is no incremental water usage or greenhouse gas emissions. to sell a product a second time. All of that environmental impact went into the first sale of that product. So for brands to sell these secondhand goods, they are essentially growing their revenue without using any more water or emitting any more carbon dioxide into the atmosphere. So that is really sort of in my opinion. the most sustainable action that brands can take. Cause it's not just a sort of incremental efficiency gain. It is truly, you know, making more money from the same products that have already been manufactured. So I think that's really important, but of course there's, there's a lot of other things that, that brands could and should be doing as far as supply chain, transparency, investing in efficiency and innovation, partnering with their, their factories and supply chains. Um, it is, uh, it's a big job. Sustainability is something that's really close to me. That's, that's what I spent my career on. Um, but yeah, there's, uh, there's no shortage of, of ways that brands can sort of engage and talk to their customers. You know, education is still a big component about this. Um, you know, customers need to know what brands are doing and sort of what that benefit is. Brent Peterson (32:32.302) That's awesome. Wilson, as we close out the podcast, I give everybody a chance to do a shameless plug about anything you'd like to plug. Would you like to plug that in? Wilson Griffin (32:46.02) Yeah. Um, I would love to ask, you know, all the listeners out there, um, if they happen to work for a brand, obviously we'd love to hear from them, you know, even if resales not something they're looking at, I'd love to hear why and just better understand and talk to them. So, you know, go to our website, re curate .com, uh, schedule a call, book a demo. We'd love to hear from you and, uh, uh, we'd love to get resale up and running on your site. And then for those customers out there. I would say, um, you know, if you have favorite brands that aren't offering resale, uh, ask them why reach out to them, say, Hey, you know, I love buying your new products. I would love to buy your secondhand products too. Why don't you take a look at this? And, um, I think some of that pressure from customers is going to help more and more brands jump in and, uh, join, uh, the reseller revolution and, and launch these programs. So, um, yeah, really excited for the. next few months and the next few years. I think we're only the early innings of this industry and yeah, we'll see where it goes. Brent Peterson (33:48.846) Thank you. Wilson Griffin is the CEO and founder of Reach Your Rate. Thank you so much for being here today. Wilson Griffin (33:57.508) Yeah, it's a pleasure. Thanks, Brent.