Circular fashion looks to profitability | WARC | The Feed
Daily effectiveness insights, curated by WARC's editors.
You didn’t return any results. Please clear your filters.
Circular fashion looks to profitability
The fashion resale market is growing steadily and is expected to keep going throughout the coming decade, but the path to a consistent, and profitable growth looks harder than ever.
Why it matters
Humanity needs to make, consume, and waste less. One of the serious culprits is the apparel industry but a new generation of buyers and shifting attitudes among buyers at large is accelerating a shift toward second-hand markets.
However, finding a way of making profit is extremely difficult. If you think of how difficult it is to wring a profit out of e-commerce at scale, think how much margin would then be eaten up by reverse logistics and authentication.
These challenges, however, won’t just be particular to fashion; as circularity starts to take hold across consumer categories, the fashion industry’s lessons will be a useful guide to many others.
Two major pieces across the B2B fashion press delve into this idea.
- Vogue business explores different models such as Danish brand Ganni’s take-back service, where customers receive store credit for some used items. It also operates online systems that allow owners of pre-owned items to sell through a network of marketplaces or its own marketplace – the brand supplies the payment processing.
Trust is a key factor, and some brands and marketplaces are experimenting with digital passports to smooth authentication.
- Business of Fashion looks at some of those same challenges but also explores the multi-sided challenge that resale platforms face with marketing to both buyers and sellers causing some of the recent entrants to spend as much as 44% of revenues on marketing.
But there is another question surrounding whether resale at large can scale beyond that initial thrift-shop audience to customers for whom buying clothes is more of a problem to be solved than a pastime in and of itself.
Bottom line: trust
Ensuring authenticity is not just a technical problem but a marketing problem. For more, explore WARC’s What we know about brand trust.
Sourced from Vogue Business, Ganni, Business of Fashion, WARC. [Image: Pexels]
Email this content