Resale programs could offer a “meaningful” decarbonization strategy for premium and outdoor apparel brands, according to a report published Tuesday by secondhand expert Trove.
The study, conducted in partnership with the impact intelligence platform Worldly, analyzed the impacts of decarbonization and circular strategies on 38 products “representative of typical apparel industry inventory.” According to Trove, which recently closed a $30 million Series E funding round, resale programs could help decarbonize outdoor, premium apparel, athleisure and mid-tier apparel companies, with the largest reductions available to the first two categories.
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For mass-market brands, specifically fast fashion, however, resale programs offer minimal benefits. Since low-priced products don’t maintain value in resale markets, replacing new production with less carbon intensive resale products is less realistic, the report concluded. Fast fashion brands interested in decarbonizing would be better served focusing on supply chain interventions and material innovation, it added.
Trove and Worldly’s study begins with the assumptions that every brand needs annual revenue growth of 5 percent and that product prices increase 2 percent per year. From there, it imagines three scenarios. In the first, the “business as usual” case, the carbon impact per item remains the same through 2040. In the second, companies implement supply chain interventions included in World Resources Institute’s (WRI) Roadmap to Zero that reduce the carbon impact per item by 2 percent annually. In the final scenario, brands implement resale programs that allow them to reach their revenue goals while requiring less new production.
Given these parameters, the study estimates brands’ absolute carbon emissions will increase 64 percent by 2040 if nothing else changes. If they decarbonize their supply chain in line with the WRI roadmap, emissions would still rise, but only by 21 percent.
To calculate resale’s carbon savings, Trove and Worldly considered a range of factors, including the resale price as a percentage of the new product price, the rejection rate of used supply, used sell through and the percentage of time that a used product displaces a new purchase.
For outdoor products, for example, they figured that used outdoor products would sell at 65 percent of the price of the same product new, 10 percent of returned products would be rejected, 90 percent of accepted resale products would sell, and 85 percent of the time, a sold used product would replace a new product. The study concluded that a brand with such a resale program, that also follows the WRI decarbonization roadmap would lower new production by 35 percent and decrease its emissions by an additional 16 percentage points. In this scenario, the outdoor brand’s carbon footprint would still increase by 2040, but by just 5 percent.
The study determined that premium apparel brands offering a resale program could see similar savings. In their case, it determined that resale would reduce new production by 26 percent, and emissions by 15 percentage points. By 2040, their footprint would rise 6 percent.
For mid-tier apparel and athleisure brands, resale stands to lower carbon emissions by 3 percentage points and 5 percentage points, respectively, the study found. For fast fashion brands, emissions would fall by less than a percentage point.
For short-lived products, Trove and Worldly said their model suggests brands should focus on decarbonizing their supply chain, reducing material usage wherever possible, designing for recyclability—including by designing with mono-material fabrics when possible and investing in recycling infrastructure—and seeking lower-carbon material alternatives. For extended-life products, they recommended offering generous product warranties and crafting enduring products, repairing products and replacing components, offering trade-in and resale options and designing for durability and prolonged product use.
Furthermore, the study concluded that brands can maximize emissions benefits by increasing the value of their products in resale. By increasing the resale price as a percentage of the new price from 65 percent to 75 percent, while also increasing sell-through from 90 percent to 95 percent and lowering the rejection rate from 10 percent to 5 percent, they found that brands could decrease their footprint by an additional 550 basis points.
“As the fashion industry adopts resale for carbon reduction, our study offers a vital guide to measure the impact of circular programs,” Gayle Tait, CEO of Trove, said in a statement. “In partnership with Worldly, we’re committed to catalyzing industry change and assisting brands on their sustainable journey. With emerging regulations, reporting ESG data is essential for competitiveness and brand integrity.”
