Yerdle may be the tech and logistics platform behind the scenes powering the resale programs of Eileen Fisher, Patagonia, Rei, Arc’teryx and Taylor Stitch, but Andy Ruben, chief executive officer and founder of Yerdle, is anything but quiet about his predictions of the resale market’s trajectory.
Prior to founding the end-to-end tech and logistics platform, Ruben worked for Walmart, first as vice president of global strategy, then the first chief sustainability officer then later in private brands. Ruben’s product-focused obsession reoriented once he ventured to the west coast, continuing his work with walmart.com — on the crux of the sharing economy — witnessing pioneers such as Uber, Lyft and Airbnb utilizing “idle capacity.”
“I talk to players who would have looked at me like I have three heads 12 months ago,” said Ruben, noting that the resale shift is happening for many reasons — while agreeing with near certainty that apparel resale is undergoing its “mainstreaming moment” this year.
Today, it’s unclear whether Ruben’s fervor is rooted in his latest obsession of actionizing idle closet capacity or by a more palpable hunger for nudging secondhand marketplaces into second position.
“Consumers are lazy, busy and guilt-ridden — getting items from their closets will have to get far easier to take advantage of the opportunity,” Ruben said. Although he criticizes the assumed millions spent in customer acquisition by marketplaces (citing the $40 million a year on user acquisition seen in The RealReal’s S1 report), he credits Julie [Wainwright, founder and ceo of The RealReal] and James [Reinhart, cofounder and ceo of ThredUp], for their work unlocking “ease” and “information” for customers in the space thus far, but he believes brands have more work to do.
He quiets quells of cannibalization, saying the “reality is if someone wants to buy a used handbag, they’re doing it anyway — the question is whether they’re coming to your brand to do that,” pointing to brand degradation as the greatest fear for brands considering resale.
Several hundred brands have been identified as ideal partners for Yerdle, according to Ruben — for their high-secondary demand, high enough price point for first retail and the leadership of the company witnessing the strategic nature of the resale space.
In Ruben’s perspective, brands like these have the “right to win” the secondhand market. “Brands are second to the game, but they are not late and ultimately they will surpass third-party marketplaces, just as they have in pre-owned automotive,” Ruben said, citing Yerdle’s advantage offering tech built for both efficiency and scale and its operations which are customizable for each brand.
One of the challenges in re-commerce is reducing logistics costs. Over the last year, Ruben said the costs of doing reverse logistics at Yerdle have gone down more than 60 percent. While digital technologies will be needed to improve authenticity in resale (including chain of custody, visual inspection with brand cues, serial numbers), the process isn’t all there yet.
The efficiency in resale has only just begun. To get a clearer sense of the process, WWD followed an Eileen Fisher item through Yerdle’s warehouse.
Step 1: Receiving
Items arrive to the Brisbane, Calif., warehouse in branded bags through Yerdle’s mail-in, trade-in initiative, already cleaned and on hangers — as is the case with Eileen Fisher — or otherwise anonymously in cardboard boxes whereby the brand would rather not deal with counting and delineating products, and instead chooses to delegate resale tasks to Yerdle.
Yerdle outsources tasks, such as laundering and repairs, to its network of specialists.
Step 2: Inspection and Item Set-up
Yerdle sets up a reverse catalogue to integrate items with brands’ existing product catalogue. Best practices are set by brands, so even upcycle and downcycle are accommodated by Yerdle and on-brand. Items receive unique barcodes, which include typical item attributes such as brand, description, image, size and color. The QR code-based system treats each item as unique, and Yerdle aims to experiment further with targeted emails to pull desirable inventory out of closets.
Uniquely, Yerdle completes a detailed inspection adding notes on item condition (i.e. “Excellent” or “Moderately Worn”) and “tips” on cataloging the used goods (i.e. “Check for hood”) directly in the item set-up. Operationally, Yerdle grades in standard grades that are mapped on the storefront according to brand and program, with grade A being the highest standard of quality.
Step 3: Photography
There are two methods for positioning items for photography on the self-built light bases — flat lay or on a hanger, with brand input also regarded.
Step 4: Stocking
Randomized “put-away” enables the right item to be picked from the bins in the warehouse, which currently houses between 50,000 to 70,000 products. Although reverse logistics are more labor than capital-intensive, technology is prevalent throughout the process. Even artificial intelligence and machine learning aid with on-site merchandising. Quality assurance occurs throughout every step.
Step 5: Picking
Warehouse associates use a handheld picking app to locate the items.
Step 6: Packing
Packing at the Yerdle warehouse looks like traditional e-commerce fulfillment, but the difference lies in the brand messaging. For Eileen Fisher, brown recycled paper sleeves wrap around the clothing and complement a white, branded packing slip.
Regarding the entire process, Ruben reiterated that “every touchpoint is brand-specific,” so brands have the opportunity to elevate their resale experiences.
“Items are finding their water level,” in the words of Ruben, and he predicts it will be competitive for closet gems — with none of those marketplace players “able to back down.” In the current trajectory, Ruben believes the middle market will be most at risk.
Regardless, as Ruben sees it — the opportunity will be for the brands.