The Evolution of Sustainability and Implications for your Business Model
Concern with sustainability is hardly new to us. As an industry, active outdoor has increased its focus on the environment and the impact of climate change for years. I think it’s in our DNA to believe that’s the right thing to do. That doesn’t mean we aren’t aware of the impact on what we sell and where we sell it. Sustainability is changing our business model.
Originally sustainability meant things like using less, recycling what we could, and choosing environmentally friendly materials. Those things are still important but awareness of the sheer amount of textiles that are being discarded rather than recycled and their impact has caused the way we try to be sustainable to morph.
You know what I mean. In my recent update on VF, I reported that The North Face had some projects to recycle garments going. Patagonia has been a leader in reusing/recycling for years. You may have bumped into TheRealReal. Here’s one of many articles on the trend. Here’s another on a Swedish mall where everything is recycled or second hand.
In my own neighborhood, there’s a free “Repair Event” coming up. The notice says, “Bring your small items and clothing for our experienced ‘fixers’ to try and fix. We work on lamps, small appliances, vacuums, electronics, chairs, pants, jackets and much more.”
Why is this trend accelerating? Partly because in our cumulative longer-term thinking, we know it’s the right thing to do. But there’s more to it and it gets to the heart of how you run your business.
First, you might consider- or hopefully, reconsider- an article I wrote last December called, “What if Our Customers Just Don’t Have as Much Money to Spend?” Higher debt and wages that haven’t come close to keeping pace with the real increase in the cost of living are the culprits here. I imagine you’ve read about the baby boomers who can’t afford to retire and the 46% of people who can’t come up with $400 for an emergency expense.
Many of our customers have less to spend. Buying recycled, refurbished, reconditioned or just plain used products is one way they manage that.
How many of you remember when the normal warranty on some products (most appliances come to mind) was three to five years? No- really- it was. Who’s bought a new phone because it was difficult to impossible to get your old one fixed?
Mostly, we don’t sell products that equate to appliances and phones. But we’d sure like our customers to buy new stuff more often just like the people who make cell phones hard to repair. Here-read this article about the “right to repair” movement in Australia.
We all need our cell phones to work. Right now. All the time. On the other hand, we can usually get by without a new hoody, snowboard, back pack or pair of jeans for a little longer. Or, we can find one that’s barely used or even new for a lot less money with not too much work.
Before the Great Recession this wasn’t quite the issue it is now. Thanks to the evolution of the internet and to Craig’s List, eBay and a host of other web sites (which are coming to be community specific) finding and getting rid of stuff is really easy. Among the things I’ve given away on Craig’s List (keeping them out of the land fill) were timbers from an old deck, a pile of river rocks and some mattresses. I love it.
And there is nothing like the glint in my wife’s eye when she comes back from an increasingly upscale thrift store with a Nordstrom’s or Eileen Fisher blouse that’s never been worn, has the original tags on it, and is 15% of the price she’d pay at their stores.
She loves the experience. And there’s the magic word. We all work to give our customers “an experience,” believing- maybe I mean hoping- that this will differentiate our brand and product when fundamentally many to most of our products aren’t different or better than the competition’s.
These places (Not sure I can call them all retailers), be they online or brick and mortar, are offering an experience which is apparently deeply satisfying to more people and makes economic sense. The quality and selection you can find used (I use that word to include recycled, repaired, reconditioned, etc.) is expanding and the social stigma that might have been associated with used goods is declining. When there is another recession (whenever that turns out to be) the economic motivation will grow further.
Meanwhile, these retail recyclers, both on and offline, are providing this apparently increasingly attractive and satisfying experience at little to no additional cost. Can you say the same about the experiences you’re trying to provide your customers? To the extent you succeed, are you just making it more likely the customer looks for your brand at a retail recycler? Yeah, it might be a little more work, but there’s the thrill of the chase and a big savings at the end of the trail.
Given the economic and social conditions I expect to evolve over the next ten years or so this trend isn’t going to go away. How to you manage it?
Fight it and participate in it. You fight it, for example, by working hard to reduce the amount of returned product that was sold online that can’t be resold as new. Here’s one tool I wrote about in January that might help you. It doesn’t work quite right yet, but it will.
Next, please tell me you aren’t contributing to the problem by actively supplying these retail recycler channels.
What I’m talking about, you’ll be stunned to learn, is, as usual, distribution. I understand the benefits of size if you’re already big. But in the conditions I see evolving smaller, privately held companies focused on the bottom line rather than the top and content with slower growth seem more likely to prosper.
You participate, perhaps, by making higher quality product and figuring ways to get it into the customers hands. Maybe you rent it to them. Ikea is going to be renting furniture. Renting formal wear for weddings, for example is well established. There are web sites where women can rent gowns and wedding dresses.
If you sell it, maybe you promise them a discount on a new garment when they send back the old, worn one. Can the same garment be reconditioned (whatever that means) and sent back to them? Can it have features added? Repaired? The color changed? Can you help them donate or discard it in an environmentally sensitive way? Carrying over certain basic styles and colors from one season to the next has become common. Any reason not to open a store or stores that sell only reconditioned product?
Basically, you’d be trying to manage your product over its entire lifetime and help the customer get more value out of it. While you did that, you’d be building a relationship- almost a partnership really- with your customer. Which is what you are always striving to do anyway.
the New Yorker had an article last year on the woman behind Rent the Runway. They and another company rent all types of stuff. the model is really innovative. for a businesswoman, $1500 a year lets her keep 30 garments in her closet, indefinitely, and she can swap them for more anytime. (or something like that. i read it in October). it’s worth finding and reading.
ok, keep it up! Logic
Great to hear from you. Ran into Adam in Denver at the show.
I don’t think I’ve even scratched the surface of how refurbish/recycle/used/rent is going to impact how companies do business. It’s going to affect logistics, manufacturing, finance and distribution. The big question is what part of a company’s total business can it ever represent.
Hope you’re doing well.