Episode 2
[00:00:00] Emily Swaddle: Hello, and welcome back to Happy Porch Radio, the Circular Economy Technology Podcast. I'm Emily.
[00:00:10] Barry O'Kane: And I'm Barry.
[00:00:11] Emily Swaddle: This is the second episode of our Exploring Circular Tech, Fashion Resale mini -series deep dive. In the last episode, we started off by setting the scene, looking at the colossal negative impact of the linear system, the importance of finding circular solutions in the fashion world, the undeniable growth of recommerce in this sector.
[00:00:33] Emily Swaddle: And we started to explore some of the opportunities and the challenges of recommerce for stakeholders such as brands, the users of these platforms, and then also the broader world and the society we live in.
[00:00:47] Barry O'Kane: We started from the assumption that recommerce is having a positive circular impact on the linear fashion system.
[00:00:53] Barry O'Kane: And then we explored how complex that is. How difficult to prove that is, how it varies between different models, different types of apparel. And we started to explore the real complexities there.
[00:01:10] Barry O'Kane: Emily, what are we doing in this episode?
[00:01:12] Emily Swaddle: This episode is all about looking at how recommerce is working in practice right now. Which is actually trickier to look at than it sounds because it's such a fast moving and dynamic space that taking a sort of snapshot of what now looks like is almost useless.
[00:01:29] Emily Swaddle: Why would we do that when it's changing so much so quickly?
[00:01:33] Barry O'Kane: It's also exciting though to explore some of what's happening right now, the beginnings of where this could go, some of the challenges, and talk to some of the amazing people about some of the amazing work that's happening.
[00:01:44] Emily Swaddle: Yeah, it's really exciting to see what the cutting edge of this recommerce world looks like.
[00:01:50] Emily Swaddle: And also to think about those challenges that came up in episode one, the complexities that we looked at, and talk to some of the people that are working in this space and to see how they're approaching those challenges.
[00:02:02] Barry O'Kane: In episode one, we talked about the different types of marketplaces. And to help us explore that further, we spoke to Joe Metcalfe, who is the founder of Thrift+.
[00:02:10] Barry O'Kane: Thrift+ is one of the UK's largest resale services, and they've sold over a million pre-loved items so far. Joe highlighted the different experiences for buyers and sellers in a managed marketplace like theirs.
[00:02:22] Joe Metcalfe: Rather than a peer-to-peer marketplace like Vinted or eBay where they just provide the platform to connect buyers and sellers, but otherwise the sellers are doing all of the work of taking photographs and uploading and pricing all the items and posting. We're a managed marketplace, so we sit right in the middle. We have a warehouse and we have operations and we handle every single item that's listed on the marketplace. And so that helps both sides of the equation. It helps our sellers because they don't need to take any photographs at all. They just put all of their items into a bag and send them to us.
[00:02:52] Joe Metcalfe: But it also helps our shoppers as well, because rather than just buying single individual items from a person on the other side of the country, you can now shop kind of quite similarly to normal ecommerce where you're putting five, eight, ten items into your basket, getting them all dispatched at the same time from our warehouse in the next couple of days.
[00:03:09] Joe Metcalfe: You've also got 30 day returns and a great customer service team as well.
[00:03:13] Emily Swaddle: As with all the marketplace models we mentioned in episode one, there are pros and cons to a managed marketplace, but according to Joe, Thrift+ is actually targeting a whole different audience, a different type of seller.
[00:03:26] Joe Metcalfe: We actually don't see ourselves as a competitor to Vinted really.
[00:03:29] Joe Metcalfe: I think anyone who is, considering selling on Vinted or eBay and who is happy to spend their time taking photos of clothes and going to the post office and lots of people really, really enjoy that process. It's kind of the kind of entrepreneurial thrill of making money and selling and getting the sales and dealing with buyers, that kind of thing.
[00:03:47] Joe Metcalfe: If you are a Vinted user and you enjoy using Vinted, you should continue using Vinted. You will get all of the sale back. So we're for everyone who doesn't want to be doing that. And I don't know the exact stats, but I would say the majority, 60, 70 percent of the UK do not spend their weekends taking photos of their old clothes.
[00:04:05] Joe Metcalfe: So from the seller perspective, that's the real kind of magic of, of a service like ours, which is that just pure simplicity of putting items into a bag. And it's actually why we present it on that side of the equation as a wardrobe clear-out service. So maybe you still are selling one or two items that still have their tags on, or you bought for 80 pounds or an unwanted present.
[00:04:26] Joe Metcalfe: You can still sell those individual items because it's worth your while. So if you've got 10, 20, 30, 50 items coming out of your wardrobe, each may be only worth 5 or 10 pounds resale, it just becomes an overwhelming task and not really worth your time.
[00:04:40] Barry O'Kane: The cool thing about what Joe is describing here is we're starting to see how some of the challenges we raised in episode one can be resolved by the different marketplace approaches.
[00:04:50] Barry O'Kane: Peer-to-peer marketplaces can have a huge audience and a very specific type of benefit and can actually be fun for both buyers and sellers. What Joe's describing here has got the potential to grow the sector even more, allowing people to transition to resale, as he says, in a very simple way. The other thing I like is that we talked in episode one about how resale, one of the core benefits is pricing for the buyer and an opportunity to make some or all of your money back from the purchase as a seller.
[00:05:20] Barry O'Kane: But now we're also exploring with Joe some of the other benefits he talks about wardrobe clear out and the simplicity of it as other benefits for the users that he's engaging with.
[00:05:31] Emily Swaddle: Yeah, the wardrobe clear out service also feels like just a clever way to market another resale platform, you know, like it offers another benefit right there in the tagline.
[00:05:43] Emily Swaddle: But the service that Thrift+ offers is actually optimizing the experience for buyers as well as sellers. Thanks to all the work of Joe and his team, there's not only sort of good pictures and all of the stuff being sorted through, so you know, like this, there's sort of been quality control, but there's also going to be a returns policy and you know that there's a customer service behind what you're doing, which you lack quite often in the peer to peer platforms.
[00:06:08] Barry O'Kane: We've also talked about how the linear retail fashion system is hugely optimized. There's a range of different places and options to buy for every different type of person. So what's interesting about what Joe's describing is starting to look at how, within resale, we can explore the optimization process for different types of audiences.
[00:06:29] Emily Swaddle: Unsurprisingly though, all the work that goes into managing a managed marketplace can be quite a lot.
[00:06:35] Joe Metcalfe: We are handling about 100 000 items a month. We upload about 45 000 items. And that means everything from opening the bag, identifying the brands, quality controlling every single item, taking the photographs, capturing the data.
[00:06:50] Joe Metcalfe: All of the tech behind that, which is to create the listings. We list across our own app and website, but also onto eBay. We're one of the biggest sellers of secondhand on eBay. And then all of the actual operations, most e-commerce is built around individual items, but you have 10, 20, a hundred of those items and different sizes and different colours.
[00:07:10] Joe Metcalfe: We have one of every item, single skew inventory is a real challenge. And so all of our tech and all of our operations has built around every single item being unique, which is another really interesting challenge to solve.
[00:07:23] Emily Swaddle: Yeah, all that work that is put in by thousands of individual sellers on a peer-to-peer marketplace is being done by one team in the Thrift+ model.
[00:07:33] Emily Swaddle: And that is incredibly labour intensive.
[00:07:36] Barry O'Kane: And so from a technology perspective, that's an interesting and fun and challenging problem. The linear economy has optimized these problems and we have processes and tools and systems in place to really streamline everything. And what Joe and his team are starting to do is explore how to do that with this whole different model, whereas he says everything is unique.
[00:07:55] Emily Swaddle: I guess it really varies so much on like, the price of the item that is being sold. If you have a quick look at the Thrift+ website, you can see something like a handbag for 500 quid. So in that case, when you're thinking about everything that's going into selling that handbag, you know, the sorting of it, photographing it, listing it, the quality control checks, and everything that happened.
[00:08:17] Emily Swaddle: And then also, obviously, a percentage of how much it's sold for goes to the original seller. You can understand how selling something for 500 quid, get a margin on that. But there's also things that are selling for like 4 pounds 50. So, the work that's going into a 4 pound 50 item is the same work that's going into a 500 item.
[00:08:38] Emily Swaddle: And from a business perspective, that just doesn't seem viable.
[00:08:42] Barry O'Kane: It makes me think about how, in the linear economy, those cheap mass-produced lower end of the price point, how it's only possible for that to be cheap for two reasons. One, because we're ignoring huge externalities, and external costs, and two is because they're doing the same thing millions of times.
[00:09:00] Barry O'Kane: And so that's very different to what we're describing here. So there's a whole new model to be built.
[00:09:06] Emily Swaddle: Yeah, so the question is, how are they making the numbers work? And how is technology supporting that?
[00:09:12] Joe Metcalfe: The thing that we've been working hard on for the last seven years, and the thing that we've needed to solve, is the relatively unsexy part right in the middle.
[00:09:20] Joe Metcalfe: It's the engine. It's effectively a maths problem, which is, can we process these clothes, this clothing, at low enough cost? And can we sell a high enough percentage of what we're processing for a high enough price? That the numbers all work and that's a really hard problem to solve, especially when you're a little bit too small or especially when you're moving warehouse or you're scaling.
[00:09:41] Joe Metcalfe: So the tech is a really big part of that. Effectively we've built that there's kind of two big chunks of tech, which helps support that. One is that. The actual app, we call it our Ops app, the app that our team uses in the warehouse. It's run on Android phones and we have about 60 team members in our, in our warehouse in Market Harbour who are using our app to continuously capture the data from items.
[00:10:03] Joe Metcalfe: It then interacts with the photography booths that we've built to capture that data as efficiently as possible. And a lot of that so far has just been a kind of process flow challenge. We actually haven't yet integrated the likes of AI and computer vision because the biggest gains so far have been around improved handling, improved quality control, improved efficiency of just handling the items themselves.
[00:10:24] Joe Metcalfe: But we're getting on to that, the more exciting stuff soon. And then the other big chunk of tech is what do we do with that data once we've captured it. So that would include the automated pricing algorithm that we use and the automated discounting curve after that point to help the item sell. And then the listing of, we currently have, I think, 400 000 items listed across both our website and our app, but also across eBay.
[00:10:48] Joe Metcalfe: And so that challenge of syncing that inventory in almost real-time across multiple sales channels is also a unique challenge that our tech enables as well.
[00:10:57] Barry O'Kane: As a software engineer, and as an enthusiast for the role of technology and circularity I get really excited about that unsexy middle, as Joe calls it.
[00:11:06] Barry O'Kane: Not getting caught up in the buzzwords and the coolest technology, but actually genuinely trying to work out how to solve the problem. And as he said, the biggest gains is in just optimizing the physical movement of goods. In the linear economy, we've had decades and decades to optimize the movement of goods around and exactly streamline the processes and build the perfect tech and manage processes around that.
[00:11:28] Barry O'Kane: What Joe's doing here is exploring a whole new model and inventing that and building the technology. That he needs to make it work. I think that's incredibly exciting. And then, as he said, we start to look at, at some point, the buzzwords of technology, AI, and computer vision and the stuff that on top of that, that can add multiplier and scaling effects, but only with that solid foundation.
[00:11:51] Barry O'Kane: And as technologists, sometimes we can forget that.
[00:11:55] Emily Swaddle: I find that interesting as well, because as a non-technologist, I think that there's this assumption that what's going to quote-unquote save the world are like these brand shiny new AI and like super clever technology things, right? That the new tech is the thing that's going to save the world, is the thing that's going to change the system, whatever.
[00:12:17] Emily Swaddle: But what changes the system is changing the system. And that means like, going, as you say, to the foundational level of what are the basic things we're doing. And I think that's really interesting as a metaphor for another kind of change and sort of building solutions as well.
[00:12:34] Barry O'Kane: Absolutely. I couldn't agree more.
[00:12:36] Barry O'Kane: And I'm really inspired by what people like Joe are doing. They're doing this process reinvention; the system change within the huge momentum that our existing linear system has. And therefore he needs scale to be financially sustainable.
[00:12:53] Joe Metcalfe: We aren't yet profitable overall as a business, but for the last three months, we have finally got the math to work so that we are now generating contributions from our operations.
[00:13:05] Joe Metcalfe: So the operations itself is contributing 30, 40 000 pounds towards our overheads. And so we need to be about three or four times bigger in order to cover our overheads. And we expect to be there by the end of the year. A lot of challenges to get there, but that's a real, real milestone for us to have three consecutive months where we're making money on every item effectively, and we just now need to process more items to get to that break-even point and once we're there Then as we scale things kind of just get better and better because we can invest in automation.
[00:13:35] Joe Metcalfe: We can have a larger warehouse. We can get efficiencies of scale. We can have a much better place for people to come and shop directly on our site because the inventory is much better and broader and some of those, again, those numbers get better in different ways. Actually, the supply side is the bit that needs to be unlocked because there is enormous demand for second-hand, but we need to get good quality supply.
[00:13:57] Joe Metcalfe: up on these platforms so that it can meet the demand that's already there. And so that's our focus right now, is really unlocking the supply side and then working in partnership with the big peer-to-peer platforms and getting our supply onto those platforms.
[00:14:10] Emily Swaddle: I think that's really great that Thrift+ are defying the odds like that, and they're on track towards becoming profitable.
[00:14:17] Emily Swaddle: But it does make me feel like a model that relies so heavily on scale, as Joe described, like, can they afford to have any competitors?
[00:14:26] Barry O'Kane: I think that's a really interesting question, and there's two things in that question I'd like to reflect on. One is, you said defying the odds, and I would describe what Joe and these other platforms and innovators are doing, is that they're innovating.
[00:14:43] Barry O'Kane: They're creating the system change that we're talking about. They're creating new business models. This is a recurring theme across circularity in all sectors and those building on the new processes and the new tech to enable that circularity. They're often faced with two challenges. One is making their own businesses viable and succeed.
[00:15:03] Barry O'Kane: But then the other one is they're inventing a process. Unlike the equivalent for a linear retail business, they know what the processes are. They just need to work out how to position it and brand it and find their own identity and make their own business viable. So they have one big problem. Circular businesses have two big problems.
[00:15:20] Barry O'Kane: And then the real strength of competition in that is that we need those things to succeed. We need overlapping competition in the right way to inspire and work towards each other. We need the size of the pie to grow, resale is growing, and we need it to grow more, and we need it to grow in the right way.
[00:15:36] Barry O'Kane: So there's this, again, complexity. There's this really difficult, complex thing of straddling between reinventing the system, trying to make a business viable and successful and scale and handling things like the balance between competition and collaboration. As he said, he's working, he uses the peer to peer platforms as one of his distribution channels.
[00:15:57] Barry O'Kane: I mean, it's just this big, messy, complex, difficult problem. And that's, I think, what's so inspiring about Joe and the other folks innovating in this space.
[00:16:05] Emily Swaddle: Yeah, that collaboration between Thrift+ and eBay is really smart. That's where everyone already is. So, that feels like a really good example of what you were just describing, Barry, of that, like, crossover, collaboration meets competition ways of working.
[00:16:21] Emily Swaddle: It was also interesting what Joe said about unlocking the supply side. To me, there was almost a contradiction there because eagle-eared listeners will have heard that Thrift+ receive 100 000 items a month, but they actually only list 45 000 a month. So what is happening to the other 55 000 items?
[00:16:42] Joe Metcalfe: There's a metric that is critical to our business, which is the sell-through rate, the percentage of the items that we upload that go on to sell. That's really important for our business because we're putting labour costs into every single item. So if an item doesn't sell, the cost of processing that item has to be borne by all those that do.
[00:17:00] Joe Metcalfe: So it's critical for our business. It's actually not that critical for peer-to-peer businesses because there's no labour going into it. There's no paid labour going into that. So, quality is really important for that. We simply can't afford to upload brands with low sell-through. So we can't at the moment afford to upload H&M, or H&M, or Primark, or any of the supermarket brands.
[00:17:22] Joe Metcalfe: Because an H&M jumper, You know, compared to those peer-to-peer platforms, we're not doing too badly. I think we sell one in three of the jumpers 30-something percent sell-through of an H&M jumper. But that means we have to pay about two pounds an item to process three jumpers for every one H&M jumper we actually sell for about 4 pounds 50. So we just lose money. And so that's kind of what I meant at the start when I say this is a maths problem, because every single brand or every single brand and item type we can look at and say, Okay, what's the sell-through and what's the average selling price and how much is it costing us? And by bringing the cost of processing items down and down and down we can upload More items and the numbers work on more brands and more item types. So that's the 55 000.
[00:18:02] Joe Metcalfe: It's either brands we can't accept or items that aren't clean or in good enough condition or items that are unbranded. Interestingly, even great stuff, which is unbranded doesn't sell online because people aren't searching for it and can't find it. So that's the difference. And that's the assessment we're making based on a lot of data, but then on a kind of manual quality control as well.
[00:18:24] Barry O'Kane: So because of the filtering process that Joe describes, And the smart pricing and other intelligent parts of their process, the sell-through rate on Thrift+ is around 70%, which Joe tells us is much higher than a most peer to peer network. So they've learned what does and doesn't tend to sell well.
[00:18:42] Barry O'Kane: And one of the interesting things is how that ties back to an episode one we talked about the displacement rate being different for different types of goods. The report that Andy and J. R. described where they broke apparel into different sections and the cheaper end of the apparel market really struggles in resale.
[00:18:59] Emily Swaddle: Yeah, so as Joe mentioned, Thrift+ just doesn't list really low-margin items. So what about those items that get sent to Thrift+ but don't get listed, or the items that do get listed but don't sell, that 30 percent that doesn't sell? There's a question about all that optimization that ensures that their sell-through rate is 70%, and how much is that potentially sacrificing some of their impact when it comes to the waste that is being generated?
[00:19:25] Barry O'Kane: Thrift+ does the best they can with those goods, donating to charity and finding responsible recycling and so on, which is obviously still better than the alternative. But really that does, to me, point to the wider system problems.
[00:19:38] Barry O'Kane: Again, the problems we're describing in the linear fashion system. And potentially again points to some of the real challenges. With the fast fashion, low quality, low price end of the market. Essentially, is it Joe's responsibility to be solving that problem? Or should we be looking across the whole system?
[00:19:56] Barry O'Kane: Actually, it's more than just quality and price. He talked about unbranded goods being hard to sell, which is where the real value of a brand identity comes in. And the real opportunity for brand-owned resale comes in, for example. Another angle that I'm really interested in is incentives. There is a cost for Thrift+ to have items that don't sell.
[00:20:17] Barry O'Kane: Same on brand-owned resale, where there's a warehousing problem and so on. On peer-to-peer marketplaces, that problem is spread out to the seller. It's less impactful on a peer-to-peer marketplace. If there are things on there that don't sell and they might be more incentivized to have a wider range, including things that maybe don't sell very quickly.
[00:20:35] Barry O'Kane: All of that just points to the complexity that we keep coming back to.
[00:20:39] Emily Swaddle: Yeah. As we mentioned at the beginning here, there are pros and cons to all these different models of the platform and where this managed marketplace system might fall down, a peer-to-peer platform might be able to fill that hole, so there is a real need for all different kinds of models working in synchronicity and kind of like an ecosystem of recommerce.
[00:21:06] Barry O'Kane: We've talked about the pros and cons of the different types of marketplaces, and one of the challenges, especially for peer to peer, is finding what you're looking for. And so often, unless you're one of the converted or you have the time or you have another incentive to actually go through and search and find, you can find the perfect item and then it's not available in your size or your colour or you don't quite trust the photographs or whatever, it's a real problem that some people are looking at how to address.
[00:21:33] Emily Swaddle: When Jessica Potter and her partner Davey set up
[00:21:36] Barry O'Kane: Used and Loved,
[00:21:38] Emily Swaddle: that was one of the problems that they were trying to solve.
[00:21:41] Jessica Potter: I came up with the idea for Used and Loved one night before I was going to sleep, and I have ADHD, so I have a lot of inventions and this was one of them. I wrote it down because I was really struggling with buying everything that we wanted second-hand for our baby.
[00:21:53] Jessica Potter: And I, the reason that we were buying everything second-hand for our baby was because we wanted it to have as little impact on the planet as possible. But I realized there was so much friction and so many barriers stopping even me from wanting to do it, even though I was so committed. So I thought if there was all this friction and barriers, that must mean that millions of other parents are just giving up at the first hurdle. And I thought, what's the point of us, you know, trying to do this for our one baby, if it's just not going to have an impact at all. So my dream was to bring all the different second-hand websites into one place and make it easier for people to search second-hand.
[00:22:29] Emily Swaddle: There are various platforms that lie on a spectrum of what they offer. On one end, you've got the Ebays and the Amazons that literally you can find anything that you're looking for. On the other end of the spectrum, you've got platforms that have got a real niche. They're very specific or maybe brand-owned.
[00:22:46] Emily Swaddle: So if you know exactly what you're looking for, you can go there. But then in the middle, there's quite a lot of like more generalist platforms. And they simply may not have the quantity of listings to help you find what you need.
[00:23:00] Barry O'Kane: So Used and Loved's approach feels like an intuitively sensible solution to that problem.
[00:23:06] Barry O'Kane: A search engine for the second-hand marketplace. But, Jessica's journey shows us that this can be a hard business to build.
[00:23:15] Jessica Potter: Then I realized that it's really challenging because it's not really a big enough problem for people. And actually, when I came up with the idea, this was like six years ago. So things have changed now.
[00:23:26] Jessica Potter: Now there are so many more people selling stuff on the Facebook marketplace and Vinted and eBay and Gumtree. So it's not as much of a problem anymore, but there still is a problem that it's still just not easy enough.
[00:23:39] Emily Swaddle: It's the window shopping thing, right? Browsing is part of the joy of shopping for a lot of people.
[00:23:45] Emily Swaddle: And when the browsing just becomes overwhelming because there's so much stuff and it's not all really relevant to you or your interests, then it just turns you off, like you don't want to do that necessarily.
[00:23:58] Barry O'Kane: It appeals to different people, as you said. I hate browsing and hate window shopping. And for that reason, I find buying second-hand, even though I am really motivated, like Jessica describes, I find it hard work. And so this is a genuine problem and many of the platforms are trying to solve this in different ways. Jessica's talking about optimizing the finding experience and we've talked to other technology providers who are like Thrift+ who are trying to simplify the quality and the clarity of everything for everybody.
[00:24:27] Barry O'Kane: So it's part of that broader, how do we optimize the recommerce process in order for it to reach the same scale as our current linear model.
[00:24:35] Emily Swaddle: And with the recommerce world changing so quickly at the minute, such a like fast evolving space. That Jessica's story shows how difficult it can be for startups or for innovations to actually sort of find a routing and make their mark.
[00:24:52] Emily Swaddle: You know, we talked last time about how, how much this space is growing. Stats, for people who like them, Vinted's user base more than doubled from 30 million to 65 million in the three years from 2019 to 2022. And, you know, that's just one platform. Other platforms have had similar levels of growth. And somebody sort of like starting new, a newcomer to the space has to keep up with that.
[00:25:15] Emily Swaddle: So the problem that that newcomer might have started out to solve might not even be there by the time they actually get their feet off the ground.
[00:25:23] Barry O'Kane: Startups are hard. Startups in system reinvention, like we're trying to do with circularity, are even harder. I find Jessica's passion and her motivations and her conviction to trying to contribute to the solutions in this area to be very inspiring.
[00:25:38] Barry O'Kane: And like any smart startup founder, Jessica's learning and starting to pivot and adapt.
[00:25:44] Jessica Potter: Over the first year of it being live, we started playing around with creating suggested categories. So for women's vintage fashion, for example, we found really nice like editorial stock pictures of like a woman in a vintage gingham dress, for example.
[00:25:58] Jessica Potter: So you could see a really cool picture of a woman, wearing a really cool vintage gingham dress. And then you click on that and it shows you all the vintage gingham dresses. Basically, the biggest problem that I realized is that when you buy new, you don't really need to know what you're looking for. You can just browse. But with second-hand, you need to know what you're looking for.
[00:26:20] Jessica Potter: You can't really discover and browse the same way. So it's really restricted to people that know what they want. And a lot of people that spend a lot of money on fashion, aren't really those kinds of people necessarily. So we started building out all of these different categories. So we've got like sports, like running shoes, like horse equipment, like loads of stuff, but I realized that actually there are so many experts that already exist on Instagram and Facebook and places like that, and TikTok, where they know how to style second-hand.
[00:26:51] Jessica Potter: They are advocating for buying second-hand, not new. They show people like what their life looks like with them wearing these super cool outfits.
[00:27:00] Emily Swaddle: Yeah, we're just seeing more evolutions of the industry. Like this time it's the rise of second-hand influences, which in part is like filling that niche that Jessica's solution was looking to address.
[00:27:12] Emily Swaddle: But she realized that there was still a problem that needed a solution.
[00:27:15] Jessica Potter: You've got all of them influencers of new that are doing that and they are financially rewarded for doing that by getting affiliate marketing from, Zara or whoever, you have an influencer wearing an outfit. The top was from this place, here's the link. And the trousers were from this place, here's the link. And those items will be available like hundreds of thousands of them, however many until they're sold out. But with second-hand, you can't do that. You know, there's just like one item of that specific thing. You can't, unless that person was selling that one item, you can't buy that exact thing.
[00:27:50] Jessica Potter: So I thought, why don't we combine the advanced tech for influencer technology, basically, for second-hand fashion, and then we can really bridge that gap and really change the way people experience buying second-hand. So with our tech, it would be similar items available. So if someone was, an influencer was wearing like a black and white polka dot dress and red kitten heels or whatever it might be, then that's what our search results would show would be similar black polka dot dresses and similar red kitten heels.
[00:28:24] Jessica Potter: So they would never be the exact items because that was still quite an early stage of the pilot. I don't know fully whether that would Be really adopted by everyone because it's a completely different way of shopping, you know, to like see the person's outfit that you really love and then actually you just need to then still apply some imagination to like see how this other polka dot dress is like a different cut and a different style potentially.
[00:28:51] Jessica Potter: Um, so the tech really needs to be enhanced with pulling out those hidden listings basically to be able to get the best matches.
[00:29:00] Emily Swaddle: It sounds like the business that Jessica has today is very different to where she started several years ago, a bit like Andy, who we heard from last episode. She told us that the pilot is going really well for this new approach, but she is aware that the landscape is still changing.
[00:29:16] Emily Swaddle: Evolution will continue.
[00:29:18] Barry O'Kane: I'm really inspired by the work that Jessica and Davey have been doing over the years. Building technology to solve a difficult problem while learning and adapting and pushing against a recurring theme of the huge momentum of the linear economy. They're really trying to disrupt the current stranglehold on linear and fast fashion.
[00:29:37] Barry O'Kane: And as Jessica points out, currently influencer marketing is incentivized away from resale. And so maybe used and loved can help shift that. I love that Jessica and Davey are not wedded to technical implementation, but they're wedded to the mission, the goal that they're trying to reach. However, like Joe, she recognizes the challenging parameters in which resale operates and the ways in which fashion and recommerce are perhaps inherently set up to favour brand new.
[00:30:04] Jessica Potter: It is really hard. So second-hand clothes and everything else are a lot cheaper than new. So there's already like a big gap in how much money there is available to make money from. And then the affiliate money that you make is just not much. You know, you have to have high volumes for, for it to be really worth it.
[00:30:24] Jessica Potter: So one thing that we are potentially going to look into doing is having like a membership or like just something where it's like a club that people can join and like really immersive second-hand world basically. But it's really challenging. There are lots of ways that you can monetize once you have like a big community, but that means you have to get patient investors, which are hard to come by, you know, like investors have so much choice of companies that are just making money really fast, you know, really quickly. It just takes time, which costs money. And then we need money, but we need investors to appreciate that it's just a longer road, basically.
[00:31:09] Emily Swaddle: All of this, the dynamics of the fast-growing market, the innovation. And invention around circular solutions, all of this is really hard to navigate, not just for newcomers like Used and Loved, but also for those that have been in this industry potentially for decades and now find themselves in a new evolving ecosystem, the brands. Let's talk about the brands.
[00:31:34] Barry O'Kane: As we talked about in the last episode, a big and growing part of the recommerce ecosystem is now brand-led. And when brands engage in circularity and recommerce, they're likely to be working with technology companies that can support them. Many of these operate on a resale-as-a-service model.
[00:31:52] Barry O'Kane: That may include software, maybe plugins into Shopify or their existing recommerce platforms. It may also include supporting services, handling the physical clothes or tying into repair or other services. In the last episode, we heard from Andy at Trove, which is one such company.
[00:32:11] Emily Swaddle: Another and even newer addition to the market is Recurate, which likewise helps brands leverage resale opportunities.
[00:32:18] Emily Swaddle: We spoke with Recurate's co-founder, Wilson Griffin, about why brands need this support. And what it can offer them.
[00:32:25] Wilson Griffin: The way the brands are organized as far as how they run their ecommerce business, for example, brands tend to create a collection and then merchandise that collection on their website. And usually what they're doing is, you know, posting those items available for sale, and then there's a lot of depth behind that item, what I mean is maybe there's, you know, a product available for sale on the site, but behind the scenes, we know that the brand has an inventory of 10 000 of that item and same with every item in that collection. So they're really good at producing multiples of one product or a collection of products.
[00:33:03] Wilson Griffin: What our software does is we create unique listings because every second-hand listing is in some way unique. It's either in a different location, maybe there's a slight flaw with it, or a stain, or maybe it's been repaired in some way that makes it different from, you know, every other product. Brands aren't good at that because it's not how they're built.
[00:33:25] Wilson Griffin: They're not good at creating unique one-of-one listings that can be purchased. So that is really sort of what our software does. One of the key capabilities that we have is if you eminently are going to list a product for sale and you say it's in very good condition, you've worn it three times or whatever other information, you know, we have ways through our software to attach that kind of data to that product, to that listing, so we can surface it to a potential buyer.
[00:33:54] Wilson Griffin: And that's something that brands aren't great at. That's really where software like ours can help. Brands manage resale, whether it's people selling peer to peer, offering to take back or repair, whatever it might be. So sort of that suite of solutions all falls within our software.
[00:34:09] Barry O'Kane: Existing ecommerce platforms and stock control and product tracking and all the software that the linear retail in fashion relies on aren't designed with the situation Wilson describes that would support resale and repair and returns and all of the associated things. And so just like Joe at Thrift+, specialists like Recurate or Trove are solving these problems, are filling these gaps, and because they're focused specifically on this, with Circularity at the core, they're able to rethink the technology and creatively innovate to improve the resale shopping experience, both for the brands and for buyers and sellers.
[00:34:48] Emily Swaddle: Yeah, everyone we've spoken to for this series mentioned how Emerging technologies might evolve this even further. Who knows what the future might look like? Wilson had some exciting ideas.
[00:35:00] Wilson Griffin: I think that there's also opportunities with things like image recognition tools and AI to make it easier for people to list items.
[00:35:10] Wilson Griffin: You know, for example, we can create most of a listing just by leveraging data from the brand's catalogue. I think in the not too distant future, someone would maybe take two images of that product and we could use artificial intelligence to build out the rest of that listing as far as what condition it's in, making that image look better with some software tools in the background to, you know, improve the lighting, put it on a plain background, that sort of thing.
[00:35:38] Wilson Griffin: I think that there's probably some predictive intelligence that we could start to leverage in the future, especially when we start to talk about inventory levels and things like that, where a brand sells out a product, and then they want to reach into their previous customer's closets and, uh, You know, sell those products in the event that they can, I think that we'll probably get to a point where there's enough data that we can actually see those things happening in real-time.
[00:36:04] Wilson Griffin: And then if a brand launches a product and it's incredibly successful and they realize that, you know, we're going to sell out of this product, maybe they actually start to reach out to the previous owners pre-emptively so that the brands are never actually out of stock. You know, prices are kind of changing dynamically and the brands are keeping those products in circulation at a price that makes sense.
[00:36:24] Wilson Griffin: I think that those tools will emerge as well. I feel very strongly that we're in the early stages of how technology and software can enable more participation in the circular economy. And then of course, you know, to do so in a way that brands and retailers are at the centre of it and driving that behaviour, I am very optimistic that there's going to be more developments in the future that they're going to improve the experience for customers and the way that brands are able to utilize these tools.
[00:36:50] Barry O'Kane: I really like Recurate's mission here. As we've said, because they're focused on the circularity aspect, they're able to look at what are the innovations, what are the exciting potentials that they've already got in their software, and that could potentially be coming in the future. And like everybody else we've spoken to, they're creating the process in this ecosystem as they go.
[00:37:12] Barry O'Kane: Recurate have some wonderful resources, which we'll share in the show notes, including an ebook, Circular Solutions for Brands and Retailers, that I think emphasises this point. And I get really excited about this recurring idea that the technology with the right mindset and the right mission behind it can be part of this broader solution.
[00:37:31] Emily Swaddle: This conversation with Wilson really kind of like set my imagination running wild. Obviously, it brought to mind the clueless closet and made me wonder why we don't have that yet. You know the Clueless Closet, Barry? No. 1990s iconic film, Clueless, where the main character Cher has a closet that has a display and she can just flick through her whole wardrobe on a, like, image of her and she can see what she wants to wear that day.
[00:38:01] Emily Swaddle: Why don't we have that yet? But it also made me think about this idea of like a world in which the data from your social media accounts was shared with resale platforms and you might get a little notification that's like, oh, that nice summer dress that you bought three years ago, you haven't worn since last August.
[00:38:22] Emily Swaddle: Maybe you want to sell it. It could go for this much money. Or like, somebody else even could be like, Oh I really like that dress, I wonder if they're reselling it and get in touch. It kind of freaks me out, but it's just my imagination running wild of like, where this technology could take us. So many opportunities.
[00:38:41] Barry O'Kane: Setting aside the privacy concerns of somebody scanning my social media accounts.
[00:38:45] Emily Swaddle: Yeah, it is pretty scary.
[00:38:46] Barry O'Kane: You're absolutely right though, there is real exciting potential for the future of this and we don't know where that's going to go. Wilson talked about some ideas that aren't far away from what they're already doing.
[00:38:56] Barry O'Kane: We also haven't explored digital passports and the opportunities that open up for brands and for tracking and for this, particularly in resale. And there's so much more there, and all of this opens to the even more complex relationship between the physical and the digital worlds. And that's something that Wilson is also excited by.
[00:39:14] Wilson Griffin: Another thing that we've given some thought to is connecting experiences to products. Meaning is there a scenario where, you know, you have access to online content or it's going to a concert or whatever it might be. And that access is actually attached to, you know, a physical item that you own. And you know, what does that mean for resale value going forward?
[00:39:38] Wilson Griffin: I think that there's the connection between sort of the digital world and the physical world is only going to get closer in the coming years. And I think that that will have a role on circularity and resale as we think about sort of what these products are worth. And it could be more than just the actual experience of wearing them.
[00:39:57] Wilson Griffin: It could be more attached to it than that.
[00:39:59] Barry O'Kane: For me, that is a really key point and ties back to our conversation about resale. Being more than just price driven and our mindset of our relationship with our clothing changing.
[00:40:12] Emily Swaddle: Yeah, I think it brings us back to some like really big questions that kind of zooms us out from the technology.
[00:40:19] Emily Swaddle: How are we using what we have? How are we valuing what we have? How are we interacting with the other people in our community and what they have? Like they're, they're sort of like huge fundamental questions in which technology can be incredibly useful tools to find more positively impactful ways of doing those things.
[00:40:39] Emily Swaddle: But I think looking at those big questions is an integral part of also understanding how we use the technology.
[00:40:45] Barry O'Kane: And I feel really positive about the role that everybody we've spoken to, this episode and our previous episode, for them, circularity is a first-class citizen, enabling them to think about the technology as a driver for change.
[00:41:00] Barry O'Kane: They're actively looking at the ecosystem and their role in building a successful business within that, balancing all the complexities we've talked about.
[00:41:12] Barry O'Kane: So Emily, where are we after two episodes of this deep dive?
[00:41:16] Emily Swaddle: We're in deep, Barry. We're in really deep, and I'm enjoying it. You know, we came in with this question, Is recommerce currently as it stands, is it a force for good? Is it having a positive impact?
[00:41:30] Barry O'Kane: And the answer, unsurprisingly I guess, is sometimes and maybe.
[00:41:35] Emily Swaddle: It depends.
[00:41:38] Barry O'Kane: There is a major risk that recommerce is distracting or hiding some deeper problems. So, for example, is it enabling us to buy lots of new stuff because, hey, it's okay, I can resell it, when in actual fact we're barely moving the needle in this wider system change. But there's also clear signs that with the right mindsets and the right approach and the right thinking that it can be positive impact on so many of the problems and that people can build successful, thriving businesses within resale.
[00:42:09] Emily Swaddle: Yeah, we've spoken about many different models of what resale can look like and talked about the pros and cons of each. And I don't think we want anyone to take away from this that there's like a best way of doing it and a worst way of doing it. There are just ways of like optimizing all of those models, but actually, the important thing is the contribution of all of those models.
[00:42:33] Emily Swaddle: It's like a yes and, everything, everywhere and all at once. And with that we inherently understand that everything comes with the cons as well as the pros. But it's not actually helpful, in my opinion, to fixate on the issues that recommerce could present. Because the reality of the alternative, of like not pursuing recommerce, is always going to have vastly more negative impact.
[00:43:05] Emily Swaddle: It's like, yes, we know that there are problems with recommerce models of all variations, but what we're choosing is stepping into the problems that we can see, the problems that we acknowledge. But stepping away from this huge, vast, global problem that comes with the linear system.
[00:43:26] Barry O'Kane: Exactly. And perhaps, despite the fact that we've focused solely on recommerce for this mini-series, we have to acknowledge the fact that this is part of an overall system change to more circularity.
[00:43:40] Barry O'Kane: One aspect of that that's really intriguing is the idea of resale being a gateway to some of those other changes. So, for example, for a brand, resale could be an immediate benefit, as Cynthia talked about the last episode, for handling things like discards and damaged goods in the warehouse. Or a different way to think about relationships with the customers.
[00:44:02] Barry O'Kane: Or a different income stream for goods once they've passed their first sale. And all of those things have the potential for the brand to start to engage in deeper thinking. In getting physical goods back that affects the design. In rethinking the way their warehouse and their process works. In looking at the broader impact and different ways that they could adapt their model.
[00:44:25] Barry O'Kane: And the same for users, the buyers and sellers. Maybe that's why resale is growing because more of us are starting to engage in the technology providers and the solution providers are making it easier for us. So it's a gateway for us to get involved in this. And then we start to rethink the value of our clothes.
[00:44:40] Barry O'Kane: We start to rethink what ownership means. And for me, that's one of the biggest potentials of resale.
[00:44:46] Emily Swaddle: Yeah, and as you say, like, brands can start thinking about these things, partly because they've got leaders, they've got examples to follow, some of whom we've spoken to for this miniseries. I just love hearing the way people think about these issues when they're approaching them, like from an entrepreneurial, innovative mindset.
[00:45:07] Emily Swaddle: They're asking often kind of like the basic questions, but the foundational things, as we've mentioned before, that fundamentally change how we interact with commerce. So, you know, like, who is using this? Who isn't using it yet? And how do we reach those people? And then what are the present issues? And what are the issues of the future?
[00:45:26] Emily Swaddle: And where can tech take us? But also, what is the change that is happening that isn't technology-focused, but it's like happening in parallel with that? And how do we make recommerce sexy and exciting in the way that buying new things can be like sexy and exciting. You know, I just love the way that the people we've spoken to think about these issues.
[00:45:47] Emily Swaddle: And as you said, like even rethinking how we own things and how we value things and what we need and what we don't need. That's like huge changes to be thinking about, and I think it is in good hands.
[00:46:04] Barry O'Kane: We've also acknowledged very much that we can't ignore the risks or the downsides. Among the many interesting resources which we'll share in the show notes, there's a really fascinating report recently written by Dennis Pamlin, who's based in Sweden, which is entitled, second-hand is Currently Bad for Global Sustainability.
[00:46:22] Barry O'Kane: And he raises in more detail some of the challenges we've highlighted. For example, recommerce incentivizing more purchasing in some circumstances and distracting us from real change. But what was interesting for me is one of the key points in that report. And Gerrard and Kristina made the same point when we spoke to them for episode one, is how we need to think about resale across the whole sector and across all of our wardrobe, not just the individual items.
[00:46:48] Barry O'Kane: And for me, we've touched on some of the ways technology allows us to do that. The data gathering, the understanding, the impact, the innovative ways to improve and simplify and optimize and reinvent the system to enable resale and recommerce to be the success that we want it to be. This has been a deep dive and it's been really fun and we've explored a topic in much more depth than we've been able to for previous seasons.
[00:47:14] Barry O'Kane: But yet again, I'm going to say, Oh, we've only just scratched the surface. We scratched a bit deeper than we have in the past, but the more we learn, the more there is to learn and the more exciting potential there is to understand the problems and the challenges and see those with clear eyes and also to see what is currently being done and what could be done in the future.
[00:47:35] Emily Swaddle: Yeah, this is a rabbit hole that we could fall very deep into. But we want some direction to our rabbit hole falling. So we would like to know what questions you have, listeners. Are there things in the past two episodes that have brought up questions for you? Or ideas? Or comments? Or suggestions? Or musings?
[00:47:54] Emily Swaddle: We'd love to hear your thoughts.
[00:47:55] Barry O'Kane: Yes, what have we missed? What would you like to hear us talk about in the last episode of this mini series? Please contact us on [email protected]
[00:48:04] Emily Swaddle: We'll put a link in the show notes and we'll try and answer as many questions as we can in the next and final episode of this mini series.
[00:48:13] Emily Swaddle: Thank you for listening to this episode of Happy Porch Radio. You'll find our show notes at happyporchradio.com , which include links, resources, and much more.
[00:48:22] Barry O'Kane: If you're interested in exploring these topics further with us, come and join our live webinar in the next few weeks. Visit happyporchradio.com and sign up to our newsletter for more details.
[00:48:30] Emily Swaddle: We want to say a big thank you to all of our guests that joined us for this episode. Their details and contacts are also in the show notes.
[00:48:38] Barry O'Kane: I've been Barry,
[00:48:39] Emily Swaddle: I've been Emily, and thanks to Ben helping us behind the scenes.
[00:48:43] Barry O'Kane: Thanks for listening!
[00:48:44] Emily Swaddle: Until next time!