(Re)vive wants to turn returns into revenue.
Levi's Leans on More Outsourced Distribution to Accelerate DTC Push
The New York-based startup that uses artificial intelligence (AI) to streamline returned or unusable inventory believes it has found the solution for handling these neglected garments (hint: it’s not a mystery box ).
“It’s shocking, the amount of waste a brand generates,” Allison Lee , the company’s founder and CEO, told Sourcing Journal. “If we were to really and truly make an impact and change, we need to empower the brands to be better about their inventory .”
The seed for (Re)vive was planted by during Lee’s experience with her previous business. The founder launched Hemster in 2017 as an alteration-as-a-service platform for brands like Reformation and Madewell . The digital tailoring platform provider “grew quickly,” she said, with about 300 stores using its services during the platform’s peak in 2019. But then the pandemic hit , and all those stores shut their doors .
“That was kind of a surreal experience as a founder, when you’re like, ‘Oh, I thought I found the product, except then major events happen and I don’t have it anymore,'” Lee added. “It was a very deep soul-searching moment of thinking about, what do I really want to do with the tech that I had built?”
So, the company pivoted. In 2021, Hemster started offering a repair portal to its brand clients. That’s when the team discovered that the biggest repairs customers were warehouse managers, as they lacked the infrastructure to properly manage their own damages, whether it be a missing button or stray cat hair.
“When you’re processing the return at the 3PL , there is just no way for this human to stock that unit back into circulation, so everyone [was] damaging out these very minorly imperfect units,” Lee explained. “We found that because they don’t really collect any data around why these units are damaged, they are making very suboptimal decisions.”
Managers were given three options for dealing with damages. The first, albeit most costly, option is to recycle the unit—a “glorified way” of saying they will shred the item down into insulation materials, Lee said.
“It doesn’t get recycled into actually reusable material because the units are not necessarily made to be recycled,” she continued. “It’s very expensive, so a lot of the brands actually end up choosing to sell these damaged units to offshore liquidators; that’s how you see all these terrible photos of clothing mountains in Kenya or Chile.” A second, and equally unattractive, option.
Chain Reaction: Courtney Folk of Renewal Logistics on the Downsides of DIY Fulfillment
The third option is to hire someone to shred the damaged units onsite. Lee described the prospect as “ironic,” considering that if a brand can ensure that these items are, in fact, damaged, they get a tax credit for throwing the items away.
Once she encountered the “reality” of what was happening to imperfect apparel units, (Re)vive was born.
“We repurposed our repair portal and changed it into more of a broader refurbishing platform,” Lee said. “That’s when we became more a revive than a headache.”
Here’s how it works: Brands create a shipping manifest in the (Re)vive portal and ship returns and deadstock to the startup’s U.S.-based hubs, which include various 3PL partners . Those items are digitized with pre-agreed value flags (based on things like item type, MSRP and season). The items are then inspected for damages, calculating potential refurbished values for sorting. From there, the teams at the (Re)vive hubs prepare the items so they’re ready for resale, maximizing the brand’s return while adhering to brand-approved processes. The brand then has the option to take the items back into physical stores or place digital inventory with (Re)vive to dropship to customers. The company’s influencer network can also sell the brand’s items through various marketplaces, with brands controlling pricing and sales data.
“We’ll scan in every single unit—say I’m holding an Eileen Fisher sweater worth $200—and I marry that entity data with the damage data . When I marry those two things, my backend can calculate the cost that it’s going to incur for the brand to repair,” Lee said. “So it basically guarantees that the brands will turn a profit by investing [in] refurbishing costs. That’s really the AI model: we figured out how to make sure this ratio between the cost and revenue makes sense for a brand’s cost structure .”
The AI-powered model determines whether a small flaw on a garment is worth cleaning or repairing to allow it to be sold. If it’s not worth it, (Re)vive enters it into responsible disposal channels. But about 90 percent of those units are brought “back to life,” Lee said.
So far, the B Corp has recovered over $23 million of gross merchandise volume ( GMV ) and saved over 150,000 garments from entering landfills. And in the last 12 months, (Re)vive’s revenues and processed units grew 10-fold. In May, the provider secured $3.5 million in a seed round , with plans to use that funding to “scale up properly.”
“It felt like we were building the airplane engine while we were flying,” Lee said of the fast growth. “Now, with the funding , we’re trying to change this mentality [to], ‘Let’s not be reactive—as much.'”
Byte-Sized AI: Skims Taps Altana for Risk Tech; Here Technologies Launches Fleet Optimization AI
Most Popular
Comments / 0