As the stigma of buying and wearing used clothes and accessories diminishes, what happens next in the resale business becomes important.
Resale is unique for a lot of reasons:
- Every item is one-of-a-kind. A consumer can’t select a different size or color and each product’s condition is special to it and handling is expensive.
- Products have to be authenticated and deep product knowledge is required. Luxury brands are especially attractive targets to fraudsters.
- No one has figured out how to be profitable at scale in resale.
- Resale has the most compelling climate-impact story of almost anything in the fashion business.
It’s especially instructive to look at what luxury brand Chloe has recently done. Conceptually, Chloe created a process to enable consumers to sell their things almost as easily as they bought them.
How it works:
For Spring 2023, certain Chloe handbags, shoes and clothes will have unique identifiers accessible to consumers. If you and your friend bought the same garment, yours will have a different ID than your friend’s.
Scanning your garment with your mobile device, connects you to a digital ID managed by EON and you can access information on how to clean the product, when and where it was made, what it’s made of and a history of its journey through production to the sale where you bought it. It will also allow you to access brand information and brand services, including a digital certificate from Trust-Place that verifies your ownership. (Disclosure: I am an investor in EON.)
When you’re ready to sell it, you select “resale” and it is automatically listed on the resale company Vestiaire Collective’s site. Natasha Franck, CEO of EON, calls it “one-click resale.”
Why This Is Revolutionary
- The fashion business is one of the least sustainable industries in the world. Even the garments of companies using sustainable fabrics get buried in landfills at the end of their useful lives.
- Resale requires authentication which is time-consuming and expensive. Until now, no one has found a way to scale up and make a profit while avoiding fakes in the system. Chloe’s innovation assures authenticity in resale at very low cost.
- Like the car market, an aftermarket for clothes and footwear allows products to go to the right consumer for each stage of a product’s life cycle. When a brand facilitates the resale, it makes it easier to trade you into their next product, just like your car dealer.
- Consumers who aspire to a brand but can’t normally afford it can now access the brand in the resale market, expanding the customer base for brands.
- Having to take your clothes to a vintage store or having a consultant come to your home has been a roadblock for the resale business. With the right system, all of that goes away.
When it’s almost as easy to sell your clothes as it is to buy them, something big has changed.
Riccardo Bellini, CEO of Chloe, told me “There has never been circularity in the management of the end life cycle of the product,” and he added, “we are in a quest to find a business model that has lower environmental impact with growth.”
Bellini is not concerned about first-price customers seeing consumers wear the brand who can’t afford it. “I want my consumer to buy our product and know that it retains value and that it can continue.”
Bellini acknowledges that “there isn’t a proven profitable model on preowned as you have on first sale.” But he also believes there is added value in the “long-term relationship with the client and that needs to be accounted for.”
This is the first time that a brand has facilitated the sale of its products on a resale site using a digital ID for each of its products. But it won’t be the last. This is likely to be a great model not just for resale but also for authentication, brand services and shopping.
Imagine a world where everything in your closet had a digital ID. You could identify the value of everything you owned in a second and choose what to resell. And you could access other services, including giving brands access to the size and style of your wardrobe and asking them to find you something new that fits your taste and price range.
We are going to a very different kind of retail world than we have been in before. This step by Chloe is an indication that the future may be closer than anyone expects.
