Resale could be our savior—at least that’s what the numbers and the microtrends suggest. It’s an easy loophole for consumers hashtagging underconsumption-core and, if brands are smart about it, a second, or even third, chance at offloading their inventory.
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Yet here lies a perplexing question: How have brands adapted to post-Covid growth in less than four years, launching cohesive user interfaces where new and used products comingle and mixed shopping carts are quickly becoming the norm?
“Contrary to what the headlines may suggest, nothing in resale is a rocketship,” Peter Whitcomb, CEO at TERSUS Solutions observed.
At least not on the back end, where the ecosystem can be a maze to navigate. Today, it’s comprised of a small but quickly diversifying group of return service companies, sortation providers, resale enablers, and recyclers. Collectively, these third-party logistics or “3PL” companies are the bedrock of re-commerce.
Using forward logistics to get a product straight to the consumer is one thing. But in re-commerce, every product a 3PL touches is one of a kind because of its used nature. Processing these “snowflakes” requires much more than simply scanning them in and shipping them out. They have to go through quality control, grading, sorting, specialized cleaning and repair just to get them into a sellable or recyclable state.
TERSUS doesn’t fit squarely into this maze, choosing instead to help brands demystify the full re-commerce process. “We’re one of few operators today that does all these services, plus forward logistics under one roof,” Whitcomb said.
Growth trajectories
But the company didn’t start this way. Since Whitcomb joined in 2021, TERSUS has expanded from offering only cleaning and repair to this full re-commerce suite.
He said the the growth is supported by small, iterative pilots. “Every time one goes well, we unlock more budget, then we do another.” That’s how, for instance, the company established partnerships with resale enablers like Trove and Archive while it served as the physical operator, processing, sorting, and cleaning returns. This slow-growth strategy has taken TERSUS from serving three to three dozen brands today, including Dr. Martens, Faherty, Patagonia and Cotopaxi.
For Debrand , a Canada-based next-life logistics provider, growth was also steady and organic for a while until, suddenly, it wasn’t.
“Our biggest inflection point was during COVID when the return rate for e-commerce skyrocketed. We’re talking 2 to 7 percent pre-pandemic to 20-40 percent during it. There was so much size racketing,” Wes Baker, Co-Founder of Debrand explained. “The specificity required to sort the returns also increased. They really forced the growth in our business.”
“You’re dealing with thousands of variables that no one person can understand,“ he continued. This means inspecting for quality, including even the most minor makeup stain or snag, and then sorting through all the MSRP data points like style, seasonality, manufacture date and material.
Since Debrand’s whole premise is sorting for the next life, it aims to eliminate decision fatigue. This means having people handle the subjective quality assessments—the part they’re really good at—and leaving the complex operational decisions up to its Allocation Engine algorithm to return goods to their highest possible value.
Debrand started managing reverse logistics in 2008, handling signage and assets for the City of Vancouver and Lululemon. Initially hesitant to branch into textile logistics due to its complexity, the team heeded the call after being asked directly by Lululemon. Today, after shifting its focus to textiles, the company is expanding across the border, opening its first U.S.-based logistics facility and working with brands like Victoria’s Secret and Everlane.
Jumping across the pond to Glasgow-based ACS Clothing (Advanced Clothing Solutions), growth has taken another trajectory.
The “all-round rental, returns, and re-commerce service company” has grown to be Europe’s largest circular fulfillment fashion hub. However, the company had a leg up on the U.S. market, which has been driven more by growing return rates and bolstered by investor capital.
“We were born into reverse logistics 27 years ago,” Michael Cusack, head of sustainability & business transformation at ACS, noted. That’s because ACS is based in Scotland, where there’s a time-honored culture of highlandland wear that’s expensive and often rented instead of purchased.
ACS started by offering textile repair and cleaning services to kilt companies and gradually expanded into tuxedos and other menswear until its facility processed 80 percent of all men’s formalwear in the country.
Today, ACS is pivoting into resale by using its existing infrastructure and leveraging partnerships with tech enablers like Archive. In May, the company was part of Amazon’s Sustainability Accelerator and had the opportunity to pitch its technology for trial in Amazon’s European operations. Whether ACS receives full buy-in from Amazon is still to be determined, but, for Cusack, the goal of establishing infrastructure across Europe within 18 months remains unchanged regardless.
“Our first move will be Poland. We’ll replicate what we’re doing in Scotland with local staff. The expansion will really just be business as usual for us.”
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No operations islands
The growth in 3PL reverse logistics, whether steady or swift, is undeniable. But so also is a common thread—that the companies are only as strong as their partnerships.
Even TERSUS, which touts the all-in-one solution label, is looking to expand its relationships with marketplaces like eBay to co-list reused items and amplify their exposure. But perhaps the most emblematic partnership example is The Renewal Workshop (TRW) and Bleckmann, a multinational end-to-end logistics operator, which acquired TRW in March 2022.
Before Bleckmann, TRW operated as an island. A brand would send the company items to be rehabbed, but then it would have to ship them to another company for logistics. Because Bleckmann is an established fulfillment company, it can handle both things under one roof, so nothing leaves the ecosystem.
“TRW is a solution provider, but we sit outside the system. I was surprised that a big logistics company like Bleckmann said, ‘We should look at this,’” Nicole Bassett, Circularity Lead at Bleckmann and Co-Founder of TRW, explained.
The key difference now that TRW is part of Bleckmann is that the company can offer circular services alongside traditional retail, bringing efficiencies to a brand’s mainline site while it also runs a renewal program.
Getting even more meta on the partnership front, Bleckmann recently started outsourcing front-end re-commerce to Recurate, an operating systems or “RAAS” Retail-as-a Service provider that was recently acquired by Trove .
“The real bread and butter is in the fully-integrated resale experience,” said Adam Siegel, Co-Founder at Recurate. If you’re a marketer and your goal is to drive more traffic to your brand’s website, you want all your property and products in one place.”
Recurate has made this possible for brands like La Ligne, Claire V, and Outerknown. The latter has chosen to up the experience ante, serving shoppers the same “Outerworn” items as they browse new styles.
“When it’s integrated, you can start to see the crossover from the mainline to renewed,” Marcus Chung, COO at COYUCHI, said.
The home and textile brand, which expanded its partnership with Bleckmann and Recurate earlier this year, is focused on getting the front end of its resale right. What’s interesting, Chung elaborated, is that this goes the other way too. Customers may be attracted to COYUCHI 2nd Home Renewed because of the lower price point or risk and then convert to the mainline later if they like the product. About 40 percent of the brand’s renewed orders today are from mixed carts.
The COYUCHI case, however, breaks with brand convention—or at least how they perceive resale will go.
Staying profitable for staying power
“They see it as as non-profitable,” Whitcomb said. “We really have to get better about talking to brands about the tenents of designing durable and desirable products, so they can reach new demographics and sell their items again to recoup margin.”
Brian Adams, the Founder of The Return, is also tackling the issue of profitability head-on. He believes the current system is hard to scale because of high shipping and freight costs and is quietly expanding a network of re-commerce locations across the nation to serve localized clientele. The business is similar to Happy Returns by UPS, but since franchisee dry cleaning locations power The Return, it adds cleaning and repairs to its service menu.
Adams mentioned that The Return works with Supercircle on some logistics and currently serves over 300 brands but did not name them.
Another way 3PLs lower costs and climate impacts is through cleaning technology. TERSUS’ signature offering is water-free CO2 cleaning technology, which uses 30 percent less energy than conventional cleaning. It launched with that tech, and since then, it’s developed the world’s first down-specific CO2 cleaning process and down and hemp fiber processing capabilities with CO2.
ACS is already using ozone gas to decontaminate fabrics, reducing its use of water and chemical detergents, but it’s looking to take this further by using nanotechnology for visible light cleaning. “If we get Amazon, it will be seismic. It will allow us to invest in new tech and the economies of scale to make it cost-competitive to repair and clean garments more sustainably,” Cusack affirmed.
As for resale’s staying power, “I think it’s very sticky. If you offer resale to a younger customer it’s hard to tell them you won’t do it anymore,” Whitcomb reflected.
Now, the real question is: Will brands continue to invest in the back-end that rescued them during the pandemic’s resale rush? Or, will they forget to get their booster?
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