Welcome to the latest sustainability column that takes a look at what retailing is doing to address the issues in its industry. Much of the ongoing focus will be on fashion but not exclusively.
This month’s column takes a look at the apparel resale market and the DPP (Digital Product Passports) technology that has the potential to transform its current somewhat limited appeal for retailers and brand owners.
We are very pleased to bring this series of columns to you with the much appreciated support of our sponsor Prolog Fulfilment.
If you thought that the second-hand clothing market was warm and fluffily eco-cosy then think again. The resale industry is brutal with a capital B and a lot of retailers and brands are caught between a classic rock and a hard place with regards to whether to enter the sector or not.
Pressure is on from government, eco-warriors and consumers to join the party and elongate the useful life of their products. However, on the other hand it is nigh on impossible to turn a profit and there is only so long the bottom line will stand the constant drip-drip of money spent on installing what is essentially a returns operation within the core business. It doesn’t even sound good on paper and one can sympathise with companies fearful of dipping their toes in even with considerable pushing from behind.
There is no doubt, of course, that this is a valuable part of the clothing industry. According to data from GlobalData and TrendUP the global demand for pre-loved clothing was $138 billion back in 2021, rose to $211 billion this year, and is predicted to hit a mighty $351 billion by 2027. The same report also found that 37% of consumers spent more of their clothing budget on second-hand in 2022. But before anyone cracks open the Champagne the same research also contains another important bit of data. Of those people who are spending more on second-hand, more than three fifths of them are doing so because of cost and inflationary pressures.
So they are not doing this to save the world’s resources or because they want Levi’s to produce one less pair of jeans. They are doing it because they want a pair of cheaper Nike’s and someone else’s feet having been already in them is a box they are willing to tick. And the inference drawn is that a customer less motivated by an ethical standpoint is likely to have less patience with the whole resale shebang of researching/uploading detailed production information and product care instructions on a given garment whether buying or selling.
And before you know it the poor old company in the middle that is trying to do the right thing has to spend time firefighting between fake listings, unauthenticated goods, misrepresented products, rubbish photos, and multiple returns while all the time its brand’s quality control is going into freefall.
It leaves brands and resale platforms with a set of circumstances where it is logistically impossible to turn a profit. No-one is making more on resale revenue than they are expending on the operation to run that resale operation. And yet the demand is tantalisingly there.
This seemingly unsquarable circle does however have technology available that can and will revolutionise it – DPPs. Some brands and platforms are already using it and the EU has legislated that all garments sold in the EU must have one from 2026 onwards. It normally consists of a QR code embedded somewhere on the garment like a care or sizing label and it provides the kind of reliable/unalterable/authentication information about where a product was made, who made it, how they made it, and how to look after it. It is essentially the Holy Grail of resale. In one scan an individual peer-to-peer seller or an employee at a resale platform can upload all the sales information that any buyer will need in an instant, thereby saving thousands of staff hours.
Of course in an ideal world the global clothing community would work together to develop a one-size-fits-all passport system so that any garment anywhere could have an integrated DPP inserted that fed into an internationally compatible system. However, this being the real world, interested brands and tech firms are pairing-up and developing their own proprietary versions.
For example, B Corp certified Pangaia, which works with its scientists to develop new plant-based textiles, started integrating the codes into its products back in 2021. Now it has taken the step of launching Pangaia ReWear, a peer-to-peer selling site and the DPPs are going to be crucial to its success because they allow the company to protect its very specific and valuable product data while easing the buying and selling process considerably.
Likewise, the clothing brand Nobody’s Child, founded in 2015, has just launched its new Fearne Cotton collaboration collection, which will be sold in John Lewis, Asos and M&S among others. Again every item has a DPP inserted and by the end of 2024 the company wants to have them in all its products. The tech operation involved is its sister company Fabacus but founder Andrew Xeni will no doubt be aiming to sell it as a white-label solution to other interested brands in due course.
What this technology does is remove the friction points along the resale process regardless of who is buying and selling and on what platform – and anything that can do that starts to turn resale from just a big potential business into a big profitable one.
Glynn Davis, editor, Retail Insider