The global clothing and textile industry was responsible for nearly 100 million tons of waste in 2015 - a figure that could jump by at least 50% by 2030, according to Global Fashion Agenda. As consumers increasingly demand sustainable production and manufacturing from the brands they love, the textile industry is faced with a significant challenge. Resale platforms grew 25 times faster than the broader retail sector in 2019. This growth expected to continue as consumers flock to these sites that give new life to products that would otherwise be discarded, World Economic Forum reported.
Building trust in these platforms, however, remains an industry-wide problem that no actor can solve on its own. Consumers are wary that the products they buy on resale markets won’t be authentic. Brands can help, but don’t currently have a viable business and technology model to collaborate in these secondary markets. Many have also traditionally viewed the secondhand market as a threat to brand prestige and sales in the primary market.
Collaborations that connect brands with these marketplaces will be essential to building more consumer trust in secondhand resale platforms. Innovative technology, combined with such creative new partnership models, could boost market circularity and produce both economic and sustainability value for all.
Several trends have driven the recent growth of the online secondhand retail market: increased demand from consumers and the industry to scale sustainable fashion; a growing proportion of shoppers comfortable with pre-owned products and buying online; and consumer interest in saving money while managing the financial impact of a global pandemic.
Historically, brands have been reluctant to be associated with secondary marketplaces for a variety of reasons. They feared brand dilution, didn’t get to share in resale economics, and had little influence over how the brand was presented. Today, they are starting to realise that their merchandise will appear on resale markets whether they like it or not. Meanwhile, these marketplaces are realizing that customer demands for authentic goods are fundamental to driving trust, and therefore the growth of their platforms.
Establishing trust has traditionally been an expensive endeavor, however. Marketplaces often use costly in-person brand experts to inspect items by hand and make determinations on authenticity on a “reasonable-efforts” basis. Others rely on the reviews and credibility of their sellers.
Also, the results of such methods have been negligible. Nearly 90% of consumers worry about authenticity in resale marketplaces, according to a survey of US-based Ralph Lauren customers conducted by the World Economic Forum, Ralph Lauren and Bain & Company between February and March 2021.Difficulties in authentication not only affect value, but also leave marketplaces open to potential liability and reputational risks from counterfeit items.
This issue cannot be solved by any one marketplace or brand alone. Rather, the solution lies in developing an effective multiple brand and marketplace collaboration model that uses flexible technology, is cost effective and can be scaled and replicated quickly. In other words, a digital authentication platform.
Products can be manufactured with digital identities to track individual items along the value chain. If these systems could be extended all the way to resale marketplaces through a digital authentication platform, it could help solve the authenticity dilemma for brands, marketplaces and consumers. It could also unlock new value streams from brand-marketplace partnerships.