Clothing waste has been an issue in retail practically since its inception, but consumers may have hit their tolerance threshold when Burberry got called out this summer for burning nearly $38 million of unsold inventory. Popular re-commerce site ThredUp offered to sell Burberry's unsold merchandise in an open letter to the company and, just a few months later, Burberry announced that it would no longer burn unsold merchandise and is already working toward several other environmentally friendly initiatives.
Companies like Burberry might be the metaphorical monsters in the closet when it comes to the reusable goods movement, but the problem is much larger than that, and more retailers are buying into the idea of recycling and reselling inventory rather than trashing it, especially in the outdoors sector.
From a numbers perspective, the Council for Textile Recycling cites data from the Environmental Protection Agency noting that 85% of post-consumer textile waste ends up in landfills, taking up nearly 5% of all landfill space. Per capita in the U.S., the average citizen throws away 70 pounds of clothing and textiles per year, according to that data. Extending the life of a product by just nine months, however, can reduce its environmental impact by 20% to 30%, according to the WRAP Design for Longevity report.
That's led some retailers to take a firmer stance on sustainability, including introducing new ways for customers to recycle and reuse products that may have passed their prime. Patagonia and REI each have their own websites for used gear, and REI has been especially focused on its re-commerce efforts in the past several months, expanding the inventory on its used gear site and hosting gear swaps of gently used items.
"These are items that had already been written off, and so the ability to bring these back into circulation is advantageous for us as a brand."
James Rogers
Director of Sustainability at The North Face
The North Face joined those ranks in June by launching a refurbishment program, The North Face Renewed, which takes returned, defective or damaged merchandise and resells it online at a discount. According to James Rogers, North Face's director of sustainability, it wasn't just beneficial for the company's finances, but also helped the retailer connect to consumers.
"These are items that had already been written off, and so the ability to bring these back into circulation is advantageous for us as a brand," Rogers told Retail Dive in an interview. "At the same time, we've done some consumer insights research and our consumers have told us that they want to feel empowered by their purchase decisions, from a social and environmental perspective. So we feel this is accomplishing both of those goals: It's helping us grow our business without increasing our environmental impact."
The sprouting growth in outdoors
As with many trends, used goods and refurbishment programs lend themselves to certain retailers more than others. Outdoors retailers are one space where they're growing, but electronics retailers are also well-known for having robust refurbishment and repair programs, mainly because so many of those products are both expensive to make and difficult to recycle, not to mention that they're often made from valuable resources that must be mined and manufactured first.
That's led to many retailers either repairing electronics, harvesting them for parts or in some cases processing them into scrap. Popular electronics retailers like Best Buy have seen great success with the services they offer customers; according to a Best Buy spokesperson, Best Buy plans to sell more than 1.1 million products through refurbishment programs this year.
The proliferation of rental and re-commerce models like Rent the Runway, which recently brought in an additional $200 million in financing, is another driving force behind more retailers, including apparel, getting involved in refurbishment or buyback programs to help keep clothing in use for longer. Complex logistics, however, create obstacles for many retailers trying to enter the re-commerce space, according to Ann Starodaj, director of sustainability at Optoro.
"The challenge is it's a complex supply chain. It's very unpredictable, unlike the forward supply chain where everything's coming in predicted fashion."
Ann Starodaj
Director of Sustainability at Optoro
"The challenge is it's a complex supply chain," Starodaj told Retail Dive in an interview. "It's very unpredictable, unlike the forward supply chain where everything's coming in predicted fashion. You don't really know what's going to come back and what condition it's going to be in. So the challenge is figuring out how you make those decisions and then creating a reverse supply chain that does that in a cost-effective way."
One of the toughest decisions to make is what items are worth the cost of repairing, according to Starodaj, as some products could end up costing more to repair than customers are willing to pay. And part of the appeal of buying used goods is that they will, usually, come with lower price tags and similar quality. Rogers notes that all products sold through The North Face Renewed program are "like new" quality and sell for discounted prices.
While some retailers may have better margins than others when it comes to refurbishing goods and selling them to someone new, the financials are not often the biggest benefit retailers can derive from keeping products in circulation. According to David Naumann, vice president of marketing at Boston Retail Partners, the appeal for outdoor retailers, in particular, comes from a customer base that's less interested in saving money and more interested in saving the environment.
"The reality is, if we have a large environmental impact then it's affecting those places where our consumers go outside and play — and we want to make sure that they have places to play for generations to come."
James Rogers
Director of Sustainability at The North Face
"People I think are more often spending their retail dollars with companies that make them feel good about spending their money," Naumann told Retail Dive in an interview. "Especially in the outdoors space: these people enjoy the outdoors and they want to protect the outdoors so those people are probably inclined to be more socially or environmentally conscious and look more positively on the retailers that are also embracing those environmental responsibilities."
Even retailers that are just now launching refurbishment programs, The North Face being one of them, have been on top of sustainability trends for years. The North Face has had its Close the Loop program, which focuses on apparel and footwear recycling, since 2013, but outdoor retailers also have the benefit of having a strong reason to launch them: their customers care.
Sustaining the brand
Predictably, outdoors retailers are a force to be reckoned with when it comes to standing up for environmental causes. While many retailers in the sector have ongoing efforts in place, REI and Patagonia have become two of the loudest players in the space when it comes to standing up for the environment. Just this spring, REI released product sustainability standards for all of its vendors in an attempt to further sustainability practices and the company continues to invest in rewilding efforts across the United States.
In the past, both retailers have also turned key sales holidays like Black Friday into platforms to call attention to social issues and further the brand's message. REI's veritable boycott of Black Friday through its #OptOutside campaign has become a yearly occurrence with expanded features every year, including a social search engine last year that allowed customers to see how everyone else was spending time outside.
Patagonia likewise gives Black Friday special treatment, and in 2016 donated all of its profits from the sales day to grassroots environmentalist causes. As of late, Patagonia has become more outspoken about the government's actions as well, turning its website into a protest last year in December that claimed, "The President Stole Your Land," as well as launching a platform to help customers support causes.
Moves like this work for outdoor retailers because, to borrow a term from social media, it's on brand. Customers want retailers to take a stance on sustainability and outdoor retailers are in a prime position to do so. Rogers notes that with The North Face's scale, the retailer is hoping to drive innovation in recycling technology in retail at large, along with giving their own customers what they want.
"A Burberry or a Prada won't sell used purses."
David Naumann
Vice President of Marketing at Boston Retail Partners
"The outdoor consumer is obviously more conscious and that's also why it's embedded in who we are as a brand," Rogers said. "We talk about it as protecting our outdoor playgrounds. The reality is, if we have a large environmental impact then it's affecting those places where our consumers go outside and play — and we want to make sure that they have places to play for generations to come. Therefore, it's in our best interest to always strive to reduce the environmental impact of our operations and our products."
Admirable as it is for outdoor retailers to host websites for used gear and handle all of the reverse logistics, not to mention the costs that come out of transporting goods back and forth and fulfilling refurbishment orders, being environmentally conscious isn't in every brand's best interest.
While the environment might beg to differ on that front, many high-end brands have their status to be concerned about and fear losing some of their brand credibility if customers see items selling in a less-than-perfect condition, which leads them to either cut their labels out of products being resold or recycled, or find other ways to get rid of their product (which, until recently, frequently meant burning). According to Naumann, that isn't a problem for outdoor retailers, but it can be for players in the luxury space.
"Some brands, especially if they're more luxury or elite status — they may feel that it may deteriorate from their brand image that they're selling a used item," Naumann said, noting that the drive toward authenticity in outdoor retail helps protect those players from that particular problem. "A Burberry or a Prada won't sell used purses."
Making the unaffordable open to more wallets
The benefit of used goods and refurbishment programs to retailers goes beyond just appealing to the social and environmental sensibilities of outdoorsy customers, though. The programs also have a role to play in customer acquisition, both for people who don't want to pay full price for products and for those who can't afford to.
At Best Buy, the company says that not only do buyback and refurbishment programs help the retailer "better control expenses associated with non-new inventory" and prevent devices from being moved into a recycling stream versus a reusable stream, they also help the retailer gain insights into product quality and why certain items are being returned, allowing for improvements in the next generation. That (hopefully) leads to fewer unhappy customers, fewer returns and more eyes interested in the company's products.
"There's really a customer acquisition argument," Starodaj said of used programs. "When you're marketing used products you might be reaching a new customer segment, so maybe a customer that can't afford that brand new, $300 Patagonia jacket but a college student who loves the brand and can afford it slightly used at a lower price."
Naumann adds that if a customer buys a product at half price through a used program at Patagonia, REI or any other retailer, they might be more inclined to shop at the retailer again further down the line, "and maybe even pay full price for their next item."
"Some of the technology on this sporting equipment changes every year and it gets better and then they don't have to invest a whole $1,000 or $2,000 or $3,000 on the latest sporting equipment."
David Naumann
Vice President of Marketing at Boston Retail Partners
While the discounts on products likely differ depending on the original cost of the item, and the amount and severity of repairs that need to be made, Rogers asserts that for most items sold on The North Face Renewed there is a "significant discount" in line with the retailer's competitors. That doesn't mean that used and refurbished goods programs are an opening for retailers to sell lower-quality products just because they're discounted, though.
Outdoor retailers especially pride themselves on the durability of their products, evidenced by policies like L.L. Bean's lifetime warranty, which the retailer finally had to shut down in February over claims that it was being abused 15% of the time. Used and refurbished programs could be a replacement in some ways for these overarching warranty policies, but the state of the products sold through used programs still reflects on the brand and could dictate whether or not they consider buying from the retailer again.
"If there's a repair done, the average consumer wouldn't even be able to see the repair," Rogers said of the quality the retailer is aiming for in its pilot program. "So these generally look and feel exactly like a brand new garment, which I think increases the user experience."
Designing for a second life
Beyond the used goods and refurbishment programs that are coming to life at outdoor retailers, among others, the secondary market is booming in other models as well, including through rental programs and peer-to-peer marketplaces. However, getting into the space is not necessarily straightforward. Naumann notes that retailers can't start a used or refurbished goods program half-heartedly and that there are a lot of processes to be thought through, including the logistics of where to store products waiting to be refurbished, who is responsible for the work and how products will be tested for quality.
Retailers also have different policies when it comes to refurbishing goods. Some will buy products back from consumers and others will give consumers store credit for their returned products — factors which change the scale of the program and impact how much effort a retailer has to put into running it. Naumann also suspects that outdoor retailers in particular will branch out with their used goods offerings to allow shoppers even more options to not pay full price for expensive products.
"In the winter, I may want to rent skis for the season instead of buy them and then I'll return them at the end of the season," Naumann said, suggesting a rental or subscription model of sorts where users pay an annual fee to rent gear during different seasons. "Some of the technology on this sporting equipment changes every year and it gets better and then they don't have to invest a whole $1,000 or $2,000 or $3,000 on the latest sporting equipment."
These kinds of models already exist in some spaces, including Rent the Runway's apparel rental model, but the outdoor space seems to hold a larger share of the used goods market than other sectors. Rogers expects that to change, though, and notes that part of the holdup for some retailers is the individual challenges associated with refurbishing one product over another.
"Footwear is a little bit harder to repair because there are so many different components and most of them are glued together," Rogers said, noting that they can't be ripped apart and stitched back together. "That's another thing I see down the road — really looking at design for end of life or design for what I call the next life."
There may be challenges ahead for retailers designing for sustainability, but if the number of forgotten brands still hanging around is any indication, the next life might be easier to plan for than we think.
