The fashion industry has a big problem: A significant number, if not most, of returned goods end up in landfills, even though many of them are unworn or undamaged. An estimated 9.5 billion pounds of returns will end up in landfills in 2022 alone, according to data from returns logistics software company Optoro. New York-based (Re)Vibe wants to help companies dispose of returned goods in a better way.
(Re)vive takes back products that retailers deem too damaged to sell and repairs them – washing them, re-buttoning them, dusting off dog hair, etc. The products are then sold through various channels, and (Re)vive's data platform helps retailers monitor and manage waste.
The underlying technology is quite interesting. Alison Lee, founder and CEO of the startup, said the company's software allows employees to sort and label a box of returned items in about three minutes and determine the outcome of the returns. The software can also show retailers how many of a particular SKU (item-keeping unit) have been returned and how much profit they could make by keeping and selling the returned items.
Renewed, still-in-season items are returned to store shelves, while (Re)vive sells out-of-season items on behalf of retailers through third-party channels like eBay and Poshmark, taking a set commission on sales.
Li said the company is currently experiencing strong demand and expects it to grow as pressure continues to grow on retailers to minimize their environmental impact, adding that companies are also facing greater scrutiny from investors and shareholders about their losses — they can no longer write them off as part of their business, as they could before.
There are a lot of positives to this approach. First, we love technology that helps companies become more sustainable and reduce their environmental impact, even if that's not their company's goal. Some companies may partner with (Re)vive from a sustainability perspective, but there are probably many more that sign on because of shareholder pressure or to boost their bottom line. It's great to be able to reduce environmental impact at the same time.
For businesses, taking advantage of such a service is a relatively simple task: Retailers already ship “damaged” products from their stores, and Lee joked that working with (Re)vive would be as simple as switching the shipping label on the box to point to (Re)vive's warehouse instead of the company's own.
(Re)vive has seen strong demand — Lee told TechCrunch the company's revenue grew nearly 15x last year — but it took the team a while to land on its current strategy.
The company today is a very different place than it was when it first launched: Founded in 2017 as an in-store tailoring service called Hemster, it raised a seed round and was in more than 300 stores before the pandemic shut things down.
“We thought we had found product-market fit, we had raised millions of dollars, and then a bunch of things happened and it was like, what do we do next?” Lee recalled.
She then launched an online repair portal for consumers. But when the team realized the platform was primarily being used by retailers looking to repair inventory in their warehouses, they decided to pivot. Since the shift, (Re)vive says it has saved companies $23 million in GMV and helped keep 150,000 pieces of clothing out of landfills.
“When we were doing Hemster, we were a 'nice to have,'” Lee says. “'Nice to have,' [a retailer’s] Roadmap. Since we changed direction, it has become indispensable.”
(Re)vive has raised $3.5 million in seed funding led by Equal Ventures and Hustle Fund, with participation from Banter Capital, Coalition Operators, Mute VC and others. Lee said the company hadn't planned on raising venture capital after its latest pivot, but decided to do so after being approached by Equal Ventures, which had been closely researching the space for several months.
I'm interested in this because I worked as a sales associate at Anthropologie for years dealing with returns and damage. I handled so many returns that were damaged because of the slightest loose thread or defect. To make matters worse, employees weren't even allowed to take these items home because doing so was an automatic firing. This meant that every day I would watch a growing mountain of nearly perfect goods headed for the landfill.
My perspective is that of one store, one shift, one retail employee. You can only imagine how much material wasted adds up. I hope (Re)vive can make a meaningful difference.