Why brands destroy products and how donation won't save us
Several weeks ago a brand was exposed for destroying product at the store level and the nasty logistics of returns was called out nationally. While feelings of outrage are warranted let's sit with the idea that this is a system in which we are both a victim and complicit. Destroying product has been the industry's common practice and, as with food waste, one in which we've all participated whether we know it or not. For all our circularity efforts, fashion remains a linear system that supports commerce of high volumes at low production, shipping and fulfillment costs. This system goes one way: out the door, at light speed. Beyond that it is a jungle. I work with companies globally unwinding these problems and creating better systems. I can share that many are working on it but it's a challenge that's been a long time in the making.
This is why we are complicit: customers have been given a lot of power. We brandish a company with bad reviews if an item has a slight imperfection, or a delay in shipment, or doesn't fit or look exactly how we imagined it would based on an image. Unsatisfied customers also don't want to pay for return shipping, much less the true cost of what it takes to have the items inspected by a human, repackaged, re-merchandised and shipped out to another user. Then there's the fact that much of the fashion industry is built on mercenarily slim margins and the business model is dependent on brand value which is created by a false sense of scarcity. Who pays for a problem that's equal parts art and science?
But there's hope. Companies like ours are popping up in service of the problem. Up to 50% of what we resell on Kept SKU are 'marked' damages - which can include both returns and unsold items. Many of these items didn't pass quality assurance because of a small issue - think a scratch on the bottom of a bag or a missing hangtag. The other 50% are excess inventory and returns. Up to 50% of fashion purchased online overall is returned. Distribution centers and store retailers aren't set up to make decisions on these categories. Imagine being an under compensated retail store employee or warehouse worker also now expected to do returns quality assurance, re-merchandising and resale. This is actually what's starting to happen as brands try to solve for these PR crises and environmental woes. The question still remains of who pays for that manual process to get the items back out in the world? Brands don't want this product liquidated just 'anywhere' without a decision-maker that has their brand's best interest in mind. Who owns that piece? This is where we are coming in.
Matching supply and demand of "waste" is arguably the greatest issue of our time. Innovation in this arena will unlock a fantastically different future, in which resources are kept in circulation over and over. While donation is one path to life extension, it is just one of many solutions needed in our tool belt. Generating true value from overlooked waste streams is the key to scaling life extension. Our system needs a complete redesign of how we've done absolutely everything up until this point. It is a knee jerk reaction to wonder, "Why don't brands just donate this stuff?" This line of thought is problematic and based on assumption that someone always wants the things we don't want. To expect charities to shoulder a municipal waste crises is magical thinking. Textiles are our fastest growing waste stream, 6% of our municipal landfills, and not every item has a next buyer. Those receiving donations have a responsibility to ensure their supply is a match for their intended recipients - otherwise, it's as good as sending them waste.
Brands are great at getting products into the world but not skilled at harder to solve logistical decisions that limit waste. This has been largely ignored until recently. Understanding that our unwanted items might just be someone else's burden is a reality we must come to terms with. Then, asking ourselves the difficult question of, "Who actually wants these things? In fact, who would might pay for them and how do we solve for that, from a technology and infrastructure standpoint, at scale?" is the path to solving fashion's waste problem (or any waste problem). Taking on the systems extending the life of overlooked waste streams, like returns, damages and excess inventory is a heavy lift and a new process and this is where businesses like Kept SKU come in. More soon on how we plan to do this.