Authenticated Resale: The DTC Brands Doing Circular eCommerce Right

In an effort to be more sustainable, brands have launched specialty stores for certified resale and authenticated luxury. Circular eCommerce is a rising trend for luxury brands who want to enter the used market.

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The rate at which consumers purchase and discard clothing is accelerating. In 2018, nearly 87 percent of clothing discarded in the US was either incinerated or ended up in a landfill. This equals 11.2 million tons of clothing. The waste generated by fast fashion has become a concern for consumers and brands. Part of the solution may be circular eCommerce.

In response to consumer demand, brands with an eco-friendly focus are doing business differently. As a part of their sustainable mission, they have launched specialty stores for certified resale and authenticated luxury. Circular eCommerce is a rising trend for luxury brands. Consumers are already purchasing vintage or used clothing from thrift stores, and circular eCommerce allows brands to enter the used market.

The year 2020 highlighted upcycled, recycled and used clothing. Here is what circular eCommerce is, which brands are getting the concept right and what it means for other direct-to-consumer (DTC) brands.

What Is Circular eCommerce?

Simply put, circular eCommerce designs waste out of the making, selling and disposing of clothing. For circular economy brands, the responsibility for a garment does not end after it leaves the store. Emily Farra for Vogue explains, “The current model is linear in many ways: A brand sells you an item, and it instantly becomes your responsibility, not the brand’s. And that’s bad for the environment — many people still throw old clothing in the trash, even if it’s in fine condition, and most of it will not decompose in a landfill. But it’s also a missed revenue stream.”

The principles of a circular economy are three-fold:

  • Design out waste and pollution
  • Keep products and materials in use
  • Regenerate natural systems

In a circular economy, both brands and consumers focus on the system’s health. Packaging, logistics and manufacturing are not the only considerations for sustainable production. Brands also need to consider what happens after the product sells and understand the product’s entire lifecycle.

Clothing brands in particular often do not consider a product’s lifecycle. The demand for new, different styles of clothing has bloated our closets and clogged our landfills. As a result, younger consumers demand more accountability for fashion waste. In a recent report from ThredUp, an online second hand retailer, 2 in 5 thrifters say they are replacing fast-fashion purchases with secondhand clothing. As for younger shoppers leading the way? The report found 45% of millennials and Gen Z refuse to buy from non-sustainable brands and retailers.

The shift in consumer spending favors a quick adoption of circular eCommerce. In Connie Lin’s article for FastCompany, “Is Fast Fashion Dying?” she writes, “So what does that mean for traditional, brand-name retailers? To keep up, they might need to innovate: Nearly 24,000 retailers surveyed say they are open to offering second hand to consumers, and almost half of executives say resale will become an important part of their business in the coming years.” Retailers focused on business as usual will find themselves left behind.

Levi's Secondhand

Levi’s entered the circular eCommerce space with the launch of its new buy-back and secondhand market program. Shoppers drop off their used Levi jackets and jeans at participating stores. In return, they get a gift card for a future purchase. Levi cleans, photographs and lists the items on its specialty secondhand website. Consumers can then search the website for their size and style. Levi even has a category for coveted vintage items like 501 and Silvertab jeans.

As a part of its launch, Levi also partnered with influencers and activists to tout the sustainability mission of their brand. For years, Levi jeans were known for their durability and longevity, making a circular eCommerce initiative a natural fit. Now, consumers can find exactly what they are looking for without having to take a trip to the flea market or thrift store. The bell bottom or acid-washed jeans coming back into style are more accessible than ever — without the added waste.

Patagonia WornWear

Patagonia has long been at the forefront of brand activism. Public trust is a crucial component of the brand. Its secondhand eCommerce solution, Worn Wear, is one of several ways Patagonia demonstrates sustainability to its consumers.

Similar to Levi’s secondhand marketplace, Worn Wear offers a generous trade-in value for eligible Patagonia gear. The website lists estimated trade-in values with categories for different gear and clothing types. Once a consumer mails in or brings in their used items, they receive a store credit for the value of their items. Shoppers can use the credit at Worn Wear or on a brand new purchase.

Quality outdoor gear is built to last, and Patagonia also offers repair services for its items. Instead of simply disposing of an item, consumers can trade it in or repair it to give it new life. This commitment to the brand and quality increases customer satisfaction. Alex Kremer, head of the program, says, “If someone knows that they’re buying a new $400 piece of gear, but that they can immediately get $200 back for it when they’re done with it, that factors into their decision.”

Eileen Fisher Renew

Eileen Fisher clothing specializes in timeless, simple designs made from quality fabrics. Its circular eCommerce store, Eileen Fisher Renew, began in 2009, making it one of the first to embrace the trend. Since the beginning of the program, the brand has taken back 1.5 million garments.

Cynthia Power, Director for Eileen Fisher Renew, says that the brand can resell 50% of the clothing brought into its resale program. Pieces that cannot be resold because of damage can still have a useful life. Some of the ways that Eileen Fisher handles items not eligible for resale include:

  • Repair and overdye. A shirt with a stain can be overdyed to take on a new life.
  • Resewn. Clothing is taken apart and the fabric cut into new pieces.
  • Waste no more. They create a non-woven felted fabric for accessories out of different materials.
  • Recycle and downcycle. Cotton can be recycled, and synthetic fabrics are downcycled by shredding and turning it into insulation.

For every piece that consumers bring back, they receive a $5 gift card, no matter the condition. “We’re seeing a big shift in consumer behavior around buying used. We know Millennials and Gen Z are eager and willing to buy things used,” Power says. “It’s growing leaps and bounds every year. Buying used, you get to do your part for the environment, and it’s kind of a treasure hunt.” Consumers who buy used get a unique experience from their clothing.

What Circular eCommerce Means for DTC Brands

Consumer attitudes toward secondhand clothing are changing rapidly. Shoppers are more willing to buy used clothing and find value in these items. They are also becoming increasingly less tolerant of waste and poor environmental practices. ThredUp’s study found 51% of consumers are more opposed to eco waste, and 60% are more opposed to wasting money than before the pandemic.

For DTC brands, circular eCommerce represents a huge opportunity to meet consumers’ environmental expectations. Beyond that, secondhand or resale programs allow brands to create a new revenue stream. Instead of quality used garments landing in thrift stores or the garbage, they can be cleaned and sold again.

Advancement in logistics makes it easier than ever to implement a circular eCommerce solution. DTC brands can partner with companies to make cleaning, inventory processing and fulfillment possible. Whether you implement a resale program or introduce other sustainable practices into your business, consumers will take notice. Younger shoppers continue to grow their buying power, and they are fueling the push for eco-friendly practices. But, these sentiments are quickly beginning to transcend generational divides. Brands that demonstrate a continued commitment to sustainability and circular eCommerce practices will be rewarded with more satisfied and loyal customers. 

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