8/10/2023 0 Comments Another tomorrow resale![]() ![]() In addition to profitability, they evaluated a product’s environmental impact across its life cycle, including production, use, resale and disposal. ![]() To quantify the impact of these competing strategies, the researchers turned to game theory, a scientific way to model real-world decision-making between competing players - in this case, companies and customers - based on a series of interactions or conditions. With this research, we wanted to help companies align their business and climate goals.” “For example, trade-in deals can incentivize customers to buy more and actually increase overall consumption. “Encouraging reuse seems like an eco-friendly move, but advocacy groups accuse some apparel firms of ‘greenwashing,’ or misrepresenting their impact,” Vedantam says. Meanwhile, in the trade-in model Patagonia uses, customers trade in old clothing for a discount on new merchandise, while the company resells their used threads to other customers. The researchers looked at two popular strategies: In a peer-to-peer (P2P) marketplace, used by the H&M-owned COS brand, the company takes a commission as customers sell and ship items directly to one another on the brand’s website. Vedantam’s study, available online ahead of publication in Production and Operations Management, is the first to quantify the profitability and environmental impact of different apparel resale models. “With the trend toward a circular economy, retailers need to adopt a resale strategy that will maximize profits and minimize their climate impact.” “Apparel companies once viewed used products as competition to their newest styles, but today many brands are looking for ways to resell preowned clothing and capture these customers,” says lead author Aditya Vedantam, assistant professor of operations management and strategy. apparel resale market is projected to exceed $50 billion in revenue by 2023, according to ThredUp, an online consignment retailer that went public last spring. As secondhand clothing sales surge to all-time highs, new research from the School of Management has identified which resale strategy is best for the environment - and the bottom line.ĭriven by a desire to live sustainably, more consumers are purchasing used clothing, pushing big names like REI, Levi’s and Lululemon to open resale brands. ![]()
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