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Over the last decades, our capacity to produce and deliver apparel to consumers has rapidly increased. Unfortunately, so too has the amount of waste in the fashion supply chain. As consumers come around to environmental concerns, major retailers must follow along to stay relevant and profitable. Returned and unsold merchandise, one key challenge facing leaders in the industry, is a major roadblock to sustainability. Luckily online B2B marketplace solutions can help.
Read on to learn more about the sustainability problems in the apparel industry and how one key solution is helping cut waste while bolstering business’ bottom lines.
There’s no denying that returns rates have skyrocketed. Over the year 2021, the National Retail Federation (NRF) reported that 16.6% of all retail purchases were returned—a concerning jump from 10.6% in 2020. It’s clear consumers now expect fast, easy, no-questions-asked returns—a cultural shift accelerated by the rise in online shopping. In fact, for online channels, the return rates become even more problematic. The NRF says 20.8% of all goods bought online are returned.
By no means is apparel exempt from this trend—quite the opposite. Experts in the fashion industry estimate that a return rate for apparel purchased online is as high as 30%. Perhaps this is unsurprising considering that it can be hard to determine color, fit, and quality when shopping online. Unfortunately, retailers aren’t nearly as good at handling returns as consumers might think—more on that later.
While it may sound like fickle consumers are to blame for excess goods piling up, the industry itself may be over-productive. Textile Exchange reports that in the last 20 years, global textile production has doubled, and could grow as much as another 30% by 2030. What’s more, by 2019 well over half of the fibers used are non-biodegradable synthetics. Reverse Resources claims that 47% of all fabric entering the fashion value chain becomes waste at one stage or another.
Sure, these figures might be higher than expected, but what’s it got to do with sustainability? Do returns really mean waste? All too often, yes.
There are a few problems at play that put the modern fashion industry at odds with the sustainable sensitivities that many consumers now share.
Unfortunately, handling returned merchandise is expensive and resource-intensive—a business needs to pay to ship it, store it, inspect it, relabel and repackage it, re-catalog it and more. This means that it may not be worth a retailer’s effort to get these items back on their shelves, no matter the price—even if they’re in perfectly functional, virtually unused condition.
With no financial incentive to re-market these clothes, businesses too often turn to destructive methods. These include incinerating unwanted items or sending them to landfills. And the fact that a massive amount of these trashed items are non-biodegradable synthetics is it’s own problem entirely.
Of course, there’s the aforementioned issue with retailers not being able to efficiently sell their customer returns, but another problem in the industry begins at the early stages of the supply chain. Take design and production for starters. Supply chain analysts and eco-minded brands often say that the first step in preventing waste is to train designers to be more sustainable in their approach. One way to do this is simply use less material throughout the creative process.
But consider this: Fabric mills require a minimum order of 10 to 50 yards or more. Creating a sample—and even a few replicates—takes no more than 10 yards in most cases, according to Reverse Resources. What happens if that style doesn’t go through to production? Again, it likely ends up in a landfill.
You may have heard of fast fashion before—ultra-trendy clothes that are produced quickly and cheaply and designed to be all but disposable. While appealing on the surface, this approach to fashion encourages waste.
First, it reduces lead times and manufacturers are pressured to produce new designs at an ever-faster pace. They create extra designs per season that require more samples. As mentioned above, this high-turnover design process contributes to waste generation.
Next, think of the speed at which fashion moves in today’s connected world. Enabled by designers, influencers, and fast fashion businesses, styles change by the week. The clothes that don’t sell are removed from racks and deemed no longer suitable for sale. Even if a customer returns an item immediately, it could take over a month to see it through the entire return process and back to the rack. By this time, the value would be significantly degraded. The item would no longer fetch enough to justify the costs of the return process. Landfills may seem like a reasonable option.
This may simply seem like the cost of doing business as a retailer. There is, however, an option to help move out returns and excess inventory quickly while recovering value. That solution is an online B2B marketplace.
While retailers can’t solve these problems overnight, rising awareness around sustainability and online B2B marketplaces can begin to address this massive amount of waste and over production.
Retailers need a reliable, cost effective way to sell returned and excess stock to secondary market business buyers. By effectively giving perfectly good apparel a second chance at life, an online B2B marketplace can keep textiles out of landfills and put them back into the hands of consumers. And resellers have never been more willing to buy—with enjoyable apparel resale experiences now available online, the growth of the secondary market for fashion is far outpacing that of retail.
But where to begin?
B-Stock provides a secondary market solution in the form of a private, online marketplace. Via its own private marketplace, a retailer can sell returned or excess apparel, accessories, footwear and more to a global network of over 500,000 vetted business buyers.
With so many eager buyers whose businesses depend on goods like yours, you can offload your returned and excess merchandise regularly, regardless of lot size or season. Even better? Our B2B sales platform gives retailers the ability to impose specific, custom terms and restrictions on buyers. This means complete control over the channels and regions in which their goods are sold.
But it’s not enough to simply be rid of the excess inventory. You also want to recover as much value as possible. B-Stock’s auction format creates competition, driving prices upward. This ensures that sellers receive the highest pricing that the market can supply.
Whether the retailer’s goal is to offset loss, move inventory, or ensure a scalable, sustainable channel for returned goods, our online B2B marketplace solution is one way to solve for all of this.
Today’s top apparel retailers and brands are selling more than 20 million units of apparel across their B-Stock marketplaces every year. If you’re looking for a sustainable B2B marketplace solution for your returned and excess merchandise, and are interested in learning more about B-Stock’s offering, please reach out today.