Imagine if some of the world’s higher-end apparel makers took it upon themselves to not only sell new products but also re-sell used, good quality versions of them as well. Andy Ruben, founder and CEO of Trove, has not only imagined this, but put it in motion with such leading global brands as Levi’s, Patagonia and REI.
Re-commerce, as it’s often called, not only attracts consumers back to retailers, but saves consumers serious money and helps protect the environment. Ruben, who served as Walmart’s first chief sustainability officer and has more than two decades of leadership experience across retail, consumer products and sustainability, spoke with NRF about Trove’s ambitious growth plans.
founder and CEO of Trove
What exactly does Trove do?
We provide resale for some of the most premium brands in the world. We provide the technology that allows brands to get their items back from customers and then we prepare them and re-sell them to the next owner.
It’s one thing to buy a pre-owned Lexus. Why would someone want to buy a used sweatshirt or jacket, even from a premium brand?
A Patagonia jacket is desirable. It’s a long-lasting piece. Most of our items have plenty of life left in them.
What is this market?
The market is proven. It’s a $32 billion market that’s going to reach $64 billion, according to Global Insight. Brands and retailers are realizing it’s their own product and it can attract customers. They’ve got to hold on to these customers. They are taking note. Brands are bringing these products back in-house.
Why bring it back in-house?
You have to because there is a customer shift. Younger customers are shopping this way. We rarely talk to a brand that isn’t aware of this customer shift.
How does it work?
Let’s take Patagonia (one of our clients) for example. You bring a Patagonia item back to a Patagonia store. When you hand it over, you receive a Patagonia gift card. That’s loyalty at its best. We then do all the processing.
How is this worth it for the brand or retailer?
A brand is making an average of 30 percent net on the overall program. It’s hundreds of thousands of items that are being resold. Some are making 40 percent and some 25 percent, but it averages about 30 percent.
What’s the gift card amount that the customer receives?
About half of the resale price. That might be 60 percent of the original price, so figure about 30 percent to 35 percent of the original price.
What’s your goal?
We should be working with about 150 premium clients in areas like outdoor athletics and luxury sportswear. One year ago, retailers were just kicking the tires. But now when we talk, they have actual budgets for 2021 to do re-commerce.
Who is the re-commerce customer?
There are two different customers. The buyers of resale items tend to be 20 years younger than retail customers. That’s mostly Millennials and Gen Z. Some 55 percent of those who buy used apparel have never actually bought from the brand, so it’s the customer who has always aspired to buy Arc’teryx but couldn’t afford it. The other core demographic is the most loyal customer who bring items back that they no longer have use for. They receive a gift card and this creates an incidental trip, an additional purchase and increased loyalty.
How big can this market grow for brands?
Patagonia has said it will be a double-digit share of its business in five to seven years.
What’s the best thing to compare re-commerce with?
I was there at the very beginning of walmart.com, and this shift is very similar to ecommerce. You can’t sit this out. It’s a customer shift. It’s a massive new opportunity.
How much of re-commerce is about saving a few nickels versus sustainability?
You can’t separate them. We’re saving a few nickels because we’re getting more use out of things that were already made.
Learn more about how other retailers are taking steps toward sustainable practices here.
What’s driving this next generation of customers to resale?
They want access to products they aspire to have. Sustainability is one of their values when they shop. And they get accessibility to these platforms when brands open up this resale space and make it easier to experience. Sustainability is at the heart of it.
Why should a retailer care about re-commerce?
If we could click our heels and go back to 1999, everyone would have been more aggressive in ecommerce. That’s why you should be paying attention right now. There is a consumer shift happening. Third parties already are in this space. If you don’t recognize this, as a brand, you are being left behind. If it’s not 10 percent of your world today, it’s inevitable that it will go there. You’ve got to figure out how you stay close to your customer and how this is a part of your portfolio.
Has the COVID-19 pandemic hurt the market for resale?
Not at all. We clean everything. The rental space may have been impacted by COVID-19, but not the resale space. At the beginning of the pandemic, we were prepared for customer questions, but the questions never came. Most customers consider what is in their closet and what they don’t need. We surpassed all pre-COVID-19 numbers. Brands we work with saw their re-commerce programs grow 200 percent to 300 percent.
What does a product need to be worth to be listed for resale?
At the moment, we work with brands that have resale prices above $50. Most were originally selling for $80 to $90 and up.
How high do you go?
We had a Nordstrom in-store pilot program last year and we were taking back items priced in the thousands of dollars.
A new administration that says it cares about the environment has just taken office. How might this influence resale?
The more that the climate and CO2 is in the public mindset, the more it will accelerate this trend. The more climate change is in the headlines and news, the more it accelerates this way of thinking.
There’s a link between politics and resale?
At the end of the day, we produce 100 billion items every year for 7 billion human beings. When you look at all of that, some 80 percent of it either gets buried or burned. There’s nowhere for it to go. So, re-commerce is an essential part of the future. It’s absolutely part of the solution.
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