Circular Fashion Online: How the Internet is Helping to Close the Loop on Fast Fashion
Second only to oil, the fashion industry is the largest industrial polluter in the world, contributing to nearly 10% of GHG emissions and 20% of wastewater pollution. On top of that, 13 million tons of textile waste is produced annually. At present, less than 40% of clothes are recycled or reused, when 95% of textile waste potentially could be. Additionally, a study into Auckland’s waterways found 88% of microplastics had derived from textiles.
Meanwhile, online and mobile retailers have accelerated fast-fashion. E-commerce and mobile shopping offers ease and convenience with free returns and delivery as well as unique and customized shopping experiences. Without expensive shopfronts and sales staff, retailers can reduce prices even further. Supply chains are increasingly complex, leading to manufacturers capitalizing on cheaper labor in developing countries (with less stringent environmental regulations) and then shipping garments across the world.
Cleantech innovators, however, have mirrored but improved e-commerce tools to facilitate more circular shopping experiences and products. Corporate brands and innovators are now coordinating take-back schemes, tracking their supply chains and offering rental services.
In response to COVID-19, many retailers are improving their e-commerce offerings. Take second-hand vintage clothing retailer Procell and Gonsalves, which have only ever sold in-store. They have now shifted their operations to Instagram. It is early days, but e-commerce will play an important role in for the fashion industry in the coming months.
This insight will explore the corporates and innovators who have exploited online tools for sustainable and circular purposes.
In efforts to make garments last longer, retailers have started to offer rental services as well as clothing maintenance and repair services in order to extend the lifespan. The global online clothing rental market is expected to grow from $1.8 billion in 2018 to $1.96 billion by 2023 at a CAGR of 10.7%. North America is the market leader in online clothing rental, followed by Asia-Pacific, which is expected to occupy over 22% of this market due to increased spending on fashion and adoption of mobile devices.
Girl Meets Dress, Chic by Choice and Rent the Runway are some of the market leaders and focus mostly on luxury, designer brands and wedding rental. More recently, everyday fashion rental outlets have emerged, providing quality clothes for longer term rental services or subscription packages.
H&M trialed its first clothing rental service in Sweden in October 2019. Similarly, Gearo, which provides rental outdoor kit, raised $100k in a seed round in November 2019. In September 2019, consumer good rental services CUMI raised an undisclosed amount in a seed round from investor East Ventures.
Recommerce, or reverse commerce, refers to the resale of used items. Ebay has been the most successful recommerce platform, with its marketplace platform delivering $2.6bn in Q4 of 2019, selling 39% used items. Driven by ethical consumerism and the ease of mobile e-commerce, the second-hand clothing market has become a glossier proposition and is estimated to reach $52bn by 2024.
Vinted, the second-hand clothes marketplace, raised $141 million in a growth equity round. Depop, developer of online social marketplace for second-hand clothes, raised $62 million in a growth equity round, while reaching 13 million users in June 2019. Depop’s social mobile app allows sellers and buyers to accrue followers, comment on posts with the ability to “like” and “save” favourite garments, plus it also encourages stylized photography. These elements capitalise on influencer culture and allow anyone to set up a sustainable e-commerce store, thus facilitating a circular economy.
Similar companies include Poshmark, a Silicon Valley startup which has raised over $150 million; ThreadUp, which has raised over $126 million and Twice, which was strategically acquired by eBay in 2015.
Self-professed disruptor, Teemil exemplify circularity throughout their online fashion platform. Their t-shirts are organic cotton, produced using renewable energy and designed to be returned and remanufactured into new t-shirts. They also track their supply chains to ensure transparency and deliver garments in reusable hessian bags rather than plastic.
Extending the life of a garment by nine months is estimated to reduce its carbon, waste and water footprint by 20%-30%. Online repair services are making it convenient to get clothes mended by offering collection services or collecting in bulk from producers.
UK based Clothes Doctor, provides online clothes repair services and produces sustainable clothing maintenance products which extend clothing life. Their website enables live chat to discuss the repairs required and pricing as well as an order-now-pay-later offering to physically look at garments before starting any work.
US company The Renewal Workshop partners with brands, including Osprey and Carhartt, to retain value from returned clothing, and it also hosts an online marketplace for repaired clothes. In December 2019, the company raised $5.5 million in a Series A round to expand into the European market with Investors Social Impact Ventures, Shift Invest, Quadia and Closed Loop Partners participating in the round.
Since 2017, Patagonia has operated an online marketplace and take-back scheme for used clothes on its recommerce website WornWear. Customers can calculate the value of their items online, mail them to Patagonia and receive instore credit. In November 2019, Patagonia opened its first WornWear store in Colorado, offering repair services and workshops.
Supply Chain Tracking
Data is a huge part of social and sustainable fashion, allowing producers, retailers and waste processors to track and measure the circularity of complex products and systems. The textile industry has also come under fire for textile waste pollution in low-middle income countries who accept our clothing waste. Tracking data helps to mitigate leakage of waste and illegal dumping.
Innovators have developed tools to track a product from virgin material to end-of-life. Data can then be interfaced with technologies like blockchain and overlaid with a shared database where data can be input verified.
In December 2019, developer of fashion supply chain platforms Zilingo acquired nCinga, a developer of platforms to enable fast data insights for fashion and manufacturing industries, for $15.5 million. Material Exchange, the developer of a sustainable fashion platform which digitizes supply chains for transparency and efficiency, raised $2 million in a seed round.
Keep An Eye On…
The chemical recycling of textile fibers to produce high- and better-quality threads for clothes is starting to commercialize following successful trials. Cleantech Group spoke to Harald Cavalli-Björkman, Chief Marketing Officer at Renewcell, which has a small-industrial scale plant producing 3-5 tons of recycled textile fiber per day. Renewcell has partnered with H&M to produce a recycled dress, due for launch in Spring ( subject to COVID-19 shut downs) made from Renewcell’s recycled fiber, Circulose® which has just launched. Harald predicts that once recycled clothing becomes mainstream, demand will increase exponentially, opening new markets for recycled textiles and providing new investment for recycling infrastructure.