EPISODE 194
February 12, 2021

“The Most Sustainable Product is One That Already Exists”

Adam Siegel, founder of Recurate, joins the show to chat about how Recurate is promoting retained sustainability through peer to peer resale.

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Adam Siegel, founder of Recurate, joins the show to chat about how Recurate is promoting retained sustainability through peer to peer resale.

The Birth of Recurate and Branded Resale

  • Adam spent over eight years at RILA, the Retail Industry Leaders Association, leading their sustainability and ethical production program and eventually leading the association's first innovation and emerging technology function, now known as RILA’s Retail Innovation Center. 
  • Coming from his background in sustainability, Adam wanted to start something of his own and noticed the theme of circular economies—particularly the rental economy and the resale economy. 
  • “There are some other niche communities that have grown up like Stock X and Grailed and GOAT that have proven that second-hand products in some cases even have more value than first-hand products.” - Adam Siegel
  • Adam noticed that once products were bought directly from a brand, the brand lost track of consumers through resale. Recurate started what they call “branded resale,” which brings the benefits of resale directly back to the brands that originally made those products. 

Benefit to All: Buyer, Seller, and Brand

  • Buyers/Consumers of products are able to directly see their purchase history through their brand and are able to directly re-sell that item back to the brand they originally bought it from. 
  • This avoids third-party marketplaces that don’t know much about the item and relists the item for sale with original imagery, description, materials, etc. 
  • “Consumers are looking for higher quality items that retain their value over time.” - Adam Siegel
  • Brands benefit by accessing data of their product after it’s out of the marketplace: data like how long their consumers hold their product, how many uses they’re getting, resale value, and more. 

How Recurate Works

  • Recurate is a scalable model because it is relatively low-cost. 
  • Items are directly sent back from the consumer to their original brand, not to Recurate. 
  • In order to keep the peer-to-peer quality uniform, Recurate’s first checkbox is to link consumers with their brands only via their direct purchase history with that brand and product. 
  • The next step is withholding payment to that seller until the item is delivered and the brand confirms the condition of the item.
  • Brands can implement their own options, but so far, brands have given 100% of the sale price to sellers if they choose in-store credit or 70-80% if the seller wants cash.
  • Apparel has been the focus of Recurate so far, but they have had early adopters in luxury footwear, denim, handbags, travel gear, outdoor gear, and sporting gear, and they are interested in expanding to kids toys and consumer electronics. 
  • Brands like REI, Patagonia, and Eileen Fisher already care about sustainability, circularity, and long-lasting products as brands. Recurate is trying to create a new model of brand resale that is more cost-effective and scalable for other businesses. 

Final Thoughts

  • “There are certainly negative ways that you can groom people in this world, especially in consumerism. Why not encourage and incentivize people to do something that’s actually really good for the world? I think that using Recurate as a platform on which to build consumer and customer loyalty, and maybe even lifetime value, with something that’s inherently better for the planet… I love that.” - Adam Siegel
  • Adam’s hope is that this will minimize discounting of new products because brands more closely understand the demand for products, first-hand and second-hand: “Our hope is that [Recurate] affects more than just the resale market itself, but the broader buying patterns of retailers and brands.”

Links


If you have any comments or questions about this episode, you can reach out to us at hello@futurecommerce.fm or any of our social channels. We love hearing from our listeners!


Phillip: [00:01:09] Hello and welcome to Future Commerce, the podcast about the next generation of commerce. I'm Phillip.

Brian: [00:01:14] I'm Brian. Today, we have a very cool guest with us, Adam Siegel, Founder and CEO of Recurate. Welcome, Adam.

Adam: [00:01:22] Hi. Good to be here.

Phillip: [00:01:23] Glad to have you. And I was saying the pre show Recurate made an appearance in our report that we just kicked the year off with, Vision 2021, and if you want to see our take on what Recurate is and how it plays into themes that we think that will impact the future of commerce go get that report at FutureCommerce.fm/Vision. But I'm sorry, I have to plug things because I'm a podcaster.

Brian: [00:01:49] {laughter}

Phillip: [00:01:49] Adam, tell us about yourself. Tell us about Recurate and catch us up on what it is you do in the world.

Adam: [00:01:55] Great. Well and again, thank you so much for the invitation to speak with the both of you and to meet your audience as well. So I'll start with just a minute about my own background, because that leads well into the vision for Recurate. What's relevant is that prior to this, I spent over eight years at the trade association that represents the largest retailers. It's called the Retail Industry Leaders Association, or RILA. And my role was two fold. First was that I was hired in in 2010 to build and then lead their first sustainability and ethical production program. And so through that, had the amazing opportunity to interact with some of the sustainability leaders from across the industry and facilitate collaborations on issues like conflict minerals, worker safety, human trafficking, as well as renewable energy production and procurement, waste reduction, recycling, supply chain efficiencies and so many more. But then also in 2013, just given how much was changing in the retail industry, I had the opportunity to build and then lead the association's first innovation and emerging technology function that we called at the time, the Artec Center for Innovation, now RILA's Retail Innovation Center, and through that just was lucky enough to meet some really wonderful people, work closely with the chief innovators from across the industry and really get to know the retail tech community from startups to accelerators to the VCs. I've always been entrepreneurial, and so after having been in that association for eight years, I felt like now is probably the time, maybe now or never to start something on my own. And there was a theme that was emerging over the time that I was working in that space. The theme was circular economy. And I know the both of you are really familiar with the circular economy. [00:04:15] What I saw was the growth of two business models in particular that really caught my attention. One was the rental economy. It was becoming a formidable market, but then also resale. And in particular resale was exciting to me because if you need to buy a product, the single most sustainable product you can buy is a used product. [00:04:43] And also it's been growing like crazy. So that's what ultimately brought us to the concept of Recurate.

Phillip: [00:04:54] Woo. And I mean, just look at the total addressable market, it's literally every human alive. There's been, what, five IPOs in the last few years alone in this space of marketplaces who have solved this by aggregating the supply and the demand into certain verticals or certain channels. How does your solution or how does Recurate differ from, say, a marketplace like The RealReal or Poshmark or Thredup?

Adam: [00:05:27] Yeah, well, first of I'll say I have so much respect for what they've done. They have proven that there is a market for second hand products. And not only that, they've made it cool to buy second hand because even above and beyond The RealReal, Thredup, Poshmark, there are other niche communities that have grown up like Stock X and Grailed and GOAT that have proven that second hand products in some cases even have more value than first hand products, which to me is awesome. So, Recurate's different because our goal is to bring the benefits of the resale market directly back to the brands. From my days working with brands and retailers at RILA, you know, it was clear that they spend a whole lot of time and creative energy designing, producing and selling products first hand. And then after that, who knows? You know, people use their products and then they have no idea what happens. But they certainly lose track of the customer and their use of the product. And eventually they get sucked into the third party marketplaces because there's really nowhere else to go. And so those brands and retailers are losing that customer and losing the subsequent transactions. And so our goal with Recurate is to create what we call branded resale, which is to bring the benefits of resale directly back to the brands that originally produce those products.

Brian: [00:07:14] That's really interesting. So you just talked about Thredup and Poshmark and some of the others. And so you're created an owned channel, something that is branded. It's curated. It's stewarded by the brand itself. Talk to us a little bit about the differences and the benefits maybe or downsides or like just the differences between having things go through a third party or maybe leaving things up to just the wild market of secondhand versus owning that channel yourself.

Adam: [00:07:53] Yeah, well, I think about it in terms of the benefits to the sellers of products, the individuals who originally purchased the items and now want to sell them, the buyers and, of course, the brand. And let me start with the brand. So first of all, the difference between what we do with Recurate relative to Poshmark, for instance, or eBay or Thredup is that the resale channel is directly on the brand's website. So to be even more specific, imagine that you've purchased a blazer from a brand online sometime in the last several years. If you're no longer wearing that blazer, it's been in the back of your closet or in storage under your bed for a while and you think, you know, maybe now it's time to clean up and put some cash back in my wallet. You would go back to the brand's website where you bought it. You would log in to find your purchase history. And we add a buy or sell used button next to every item in that purchase history. So you'll find your blazer, you click sell used, you fill out a very simple form, and then your item will be listed directly on that brand's website in a new collection. They can call it the pre loved market or whatever they would like. And so the benefits to the seller is that it's a very simple process to list your item for sale, unlike if you were to go to a third party marketplace. They know nothing about the product you're trying to sell, whereas we know everything about the product you're selling because we have access to the brand's original imagery, description, material, quality, original price, age of the item, etc.. So we're completing the listing, maybe 80 percent of the listing, which means that there's really only a few additional fields that you need to complete. And then from the buyer's perspective, because again, we are connected directly to the brand, we're able to supplement the listing with the brand's original imagery, description, et cetera. And so the browsing, the online browsing experience is just a much better experience than what you would see on those third party marketplaces, which are kind of a smorgasbord with crappy imagery, poor lighting, staging. And so our goal is to improve the experience for both the seller and the buyer.

Phillip: [00:10:36] This is such an interesting topic, because if I had to relate it back to something else that's top of mind, Bryan, we're in the midst of recording a new season of Step by Step, which is really kind of dissecting the Prime effect or what our friend Kris Gösser would call the Prime Problem. And there are many solutions to the Amazon Prime problem. The biggest problem being is that consumers have this expectation of you and your brand. I get an email every week from Zillow that tells me how much my house is worth. I get an email once a quarter from my car dealer telling me how much they could rebuy my car back from me for. I get an email from Lending Tree that tells me how much equity I have in my home and how I could tap that. I'm leaving money on the table. This consumer expectation of the idea of residual value that they have in goods is moving down the funnel from large considered purchases and equity and assets that you have down to everyday items. It's the thing you consider why you buy a Peloton and not a SoulCycle because of the residual value will hold in the total addressable market to the resale market of how you could get rid of that when you decide you don't want to cycle for watts anymore. I'm curious if you are seeing this play out in the marketplace, it's not just that The RealReal and Poshmark have discovered the market and proven it in spades, but it's that the new expectation will be that customers will expect that brands have this relationship from them. And is that what Recurate is... Is that the puck it's skating toward?

Adam: [00:12:20] I think that you're hitting the nail on the head. I love what you describe in your reports. Is the product eternal? And from my point of view, I think about it in terms of sustainability, which is that you can produce poor quality, low performing products that last for several uses and then need to be disposed of, or you can produce high quality, long lasting items that might have multiple owners. And the performance of the two is really night and day in terms of their sustainability attributes. But yeah, I absolutely see that consumers are looking for those higher quality items that retain their value over time. And in fact, we have conversations with brands that know it's the case with their products. In fact, one of our early adopting brands, they have a very robust buy sell trade group on Facebook, and they're seeing that their products are being resold for 70, 80, 90 percent of the original value. And they've even said that they had considered raising prices, given that's the case. But they wanted to be able to tell the story more holistically to their customer before they felt comfortable doing so. And so this now gives them a channel, a place to acquire that information and to tell a more holistic story.

Brian: [00:14:03] Ooo. Information. That's a word that perked my ears up. There's also a data component to this I feel like [00:14:08]. One of the interesting things about the way that the secondhand market used to work is that you would have really no idea what happened to your product after you put it out in the wild. And so I can imagine that there's a whole new set of data that brands can gather as a result of this that will allow them to understand how their customers purchase, how they think of the product, how long they hold the product, how many uses they're getting out of that product, and then what happens afterwards. It's probably a completely untapped market for how to think about your products and what it means to your customers and where your brand is getting to, no less. [00:14:47] And actually so that's another question I have for you. So what kinds of impacts have you seen on brand through owned channels, like secondhand channels like this?

Adam: [00:14:57] Well, it's still early days. We're a relatively young company. We've been around for a year. But our largest brand has only been live with us for several months now. So the data is still, I'd say, too early to draw any sophisticated conclusions. But I will say that I very much agree with you about the value of the data that we're going to be getting from this resale channel. And frankly, that's one of the things I'm most excited about as well, data about the customer and consumer behavior as it relates to a brand's products. But then also data about the products themselves, like how they're being used, failure points, opportunity to improve or enhance the quality of items. That sort of data to me is going to be extremely valuable.

Brian: [00:15:58] Yeah to think about this. Like if a product was only able to last through like two sales, like you just keep track of like number of resale, the number of times a product of yours changes hands on your market. And like, if the chain stops early, you could go dig in on that and find out why it stopped early for some products versus others.

Phillip: [00:16:22] Brian's just finding a way to cram Blockchain into your solution?

Brian: [00:16:28] Absolutely. Yes. Not to mention the ability to also... So this is an interesting question. So is there an element of being able to control your market as well? And I mean this and maybe both are good and bad way. Is there a way to sort of like set prices or provide some sort of like bluebook on your products, so that people are both getting fair value for the purchase and sale? But also you're making sure that you sort of have a hand in what happens to your brand's value after the product is used the first time.

Adam: [00:17:09] Absolutely. One of the ways we describe this resale channel to brands is that it's bringing resale back under their control. And one of the things that we do when we're talking to brands, it's almost an easy sell is to search for their brand on Poshmark or on eBay. And anyone who knows anything about branding, whether that's fashion, apparel, consumer electronics, et cetera, knows that the imagery, the descriptions, the way their brand is portrayed on those third parties is extremely suboptimal. It's a really poor experience and it shines on the brand. So they want to control that experience better. Make it better is another way of describing it. They want it to be a beautifully on brand experience. Whether you're buying firsthand or secondhand, you're specifically describing pricing. And yeah, that's another thing that we've found to be a point of friction on third party sites because they don't know anything about the product that a seller is trying to resell. So they can't provide any sophisticated recommendations for pricing. But we know the age of the item. We know what you paid for it initially. We know what it can be sold for now, new. We have all of the information about it. We have a good sense of the demand for that product. And so based on all of those factors, we actually recommend a price to the reseller. They can ultimately choose the price they want to sell it for, but we can recommend a price and nudge them in a way that's beneficial for both them and the buyer.

Phillip: [00:19:08] I would assume that the most authoritative voice in the fair market value of a price of a used item would be the brand itself. That would be the anchor point at which all other resale markets could pin their pricing to. Because I would think, I might be wrong, but I would think that the brand would understand what the market demand would be because they would be the origination point of where that product would come to or would have come from. Can we talk a little bit, Adam, about the logistics of how this works? Say I'm a retailer. Or I'm a brand that's looking to on board Recurate. What does the actual logistical... What's the chain that happens after a customer decides they want to sell something back to me as a brand? How do they realize the value? How does that encourage lifetime value for me as a brand? And what is some of the embedded costs or potential cost impacts or maybe impact to the bottom line that I could expect?

Adam: [00:20:22] Right. Well, the great thing about what we're doing is that the costs to operate Recurate are extremely low. And that's because we run a peer to peer marketplace directly on the brands website. So from logistics point of view, the seller sends the item directly to the new buyer. It doesn't go through the brand. It doesn't come to us. For that reason. We can keep costs extremely low. And this is therefore a very scalable platform. There are other branded recommerce services in the marketplace, and I have tons of respect for them because they really pioneered the space, but I do see the difficulty of those other services is that it's costly to run when you do have to send items back to a central facility for processing, for inspection, for photography before you're able to resell them. It's just a very costly step and therefore it's not especially scalable.

Brian: [00:21:39] So that leads me to my next question, so if it's peer to peer how do you handle authentication, quality, experience with shipping, all that kind of stuff, to make sure that customers get a quality experience on your own secondhand market?

Adam: [00:21:56] Right. And that's honestly the biggest question that brands ask us before they proceed with us. And so, of course, we've put a lot of thought into it. First, I'll say this is already a very common customer behavior online, peer to peer. It's not like we invented peer to peer marketplaces. And so most consumers that are engaging in this already understand how it works and they're comfortable with it. That said, because we are branding it, putting it directly on brands' websites, we need to make sure that there is an especially high level of quality and authentication for the brand and the sellers and buyers to feel comfortable. So there are several things that we do to ensure quality. First is that, like I mentioned, if you're a seller, you sell by listing items directly from your purchase history. So we know that you've purchased that handbag. We know you've purchased it before you go to resell it. Whereas on eBay you can pretend that you have anything in your closet and list it. They have no idea whether or not you've actually ever purchased that item. So that's the first check. The second is that the brand has an approval process where every listing goes through the brand and they have information about your own purchase history, your resale history and a number of other data points in order to gauge the trustworthiness of you as a seller. But then one of the biggest checks is that we withhold payment to the seller until you deliver the item and the buyer confirms the condition of the item. So the buyer has to receive and then confirm the condition of the item before the seller gets paid. And actually, when we first started this program, we assumed that there would be a dispute rate on the order of three to five percent. But what we found now after hundreds of transactions is that it's more on the order of like less than one percent.

Phillip: [00:25:55] To coin Brian's phrase, so what I hear you saying is Recurate is effectively the Shopify of creating a resale program for a brand, and it's making it unbelievably easy and incredibly attractive to set it up and launch it with people who are experts who have done this over and over again, providing all of the not just the technology platform, because that's super important. But the whole of the consumer experience journey, which is the most important part, is the providing the trust that this is something that is trustworthy and easy to engage in. But also there's a value you get by having resold the item. There's some sort of a value from the consumer perspective. So let's talk about consumer for a second. If I have a denim jacket, a Todd Snyder denim jacket, which has been often talked about here on this program... I'm ready to sell this jacket, and I go to sell it, what are some ways that the retailer provides that value to me? Are these funds that get paid directly to me in this peer to peer transaction? Is this a store credit situation? Give me an idea of ways that I could realize the value as a consumer.

Adam: [00:27:19] Yeah, that's a great question. So as a seller, you can get paid in one of two ways and actually the brand is able to make the decision when we first implement with them if they want to offer both of these are only one option. So the two are what you described. Store credit. And of course, every brand wants to offer store credit because they can keep the seller within the community.

Phillip: [00:27:46] Of course.

Adam: [00:27:47] And then the other is cash. What we've found is that every brand that we've launched with and every brand that we're planning to launch with is giving one hundred percent of the sale price to the seller in store credit.

Phillip: [00:28:02] Smart.

Adam: [00:28:02] So if the seller chooses to get a gift card, they're getting one hundred percent of the sale price. You, of course, couldn't get that by going to any third party site because they'll always take a cut of your transaction. But then with regard to cash, the brands that we're working with do tend to take between 20 and 30 percent of that transaction, which is in line with the third party marketplaces.

Phillip: [00:28:33] Sure. How easy is it for me to send my stuff in?

Brian: [00:28:38] There it is.

Phillip: [00:28:38] I've sold my jacket. Sorry, sorry, Brian, I'm just going.

Brian: [00:28:42] That's the right question.

Phillip: [00:28:45] How easy and painless is it for me?

Adam: [00:28:48] Well, you know, you made a point earlier on the podcast about the importance of the customer being at the center of this. And we feel the exact same way. We obsess over making the experience easier and easier and easier with everything that we do. So that already plays out with the listing process. [00:29:12] It's really just a few clicks to list an item for resale as a seller. With regard to shipping the item, once your item sells, we automatically generate a shipping label. We email that shipping label to you and you have three days to print it out, bring it to your post office and send it on its way. So that's a pretty straightforward process. [00:29:36] I think there's always opportunities to improve that still, for people who don't have a printer, who don't have a box, who don't want to go to the post office. So we're constantly looking for ways to improve that element of the experience. But up until this point, we haven't had any significant issues with sellers being late on their shipments or any reasons why they couldn't ship.

Brian: [00:30:09] Makes sense.

Phillip: [00:30:09] Apparel is a natural category, right? What are some other verticals that you might be focusing on right now or in the near future?

Adam: [00:30:17] So many others. And that's part of what really excites me about this, is that because it's peer to peer, we can really work with almost any product category. There's very few limits. So you're right, the early adopters were in apparel, and that's because the use case is just so obvious. I mean, it's staring them in their face every time they go to Poshmark and search for their own brands.

Phillip: [00:30:45] Sure.

Adam: [00:30:47] But we also have early adopters in luxury footwear, premium denim, handbags, backpacks, travel gear, outdoor gear or sporting gear. We're interested in getting into kids and baby and toys for natural reasons, consumer electronics as well. So there's a number of categories for which we see this being very relevant.

Brian: [00:31:24] I love that. You could even go like local with furniture at some point.

Phillip: [00:31:29] Right. Right. The only reason why we hesitated on furniture is, of course, the shipping of furniture is just a pain and expensive.

Brian: [00:31:37] Right.

Adam: [00:31:37] So for now, we've stayed away from that. But really, anything that's easily shippable by a consumer is a category that we're excited about.

Brian: [00:31:47] I'm so excited about this. I think about this from like, again, both from the brand value and the consumer value side of things. Eventually, and Phillip hinted at this earlier, I could see brands that are engaged with Recurate creating sort of personal inventory lists for customers and there's an element, especially with some of the brands that are focused on value, both of the life after their product is used the first time, but also those value plays like even like Italic or some of those other brands where it's like not only are they offering extreme value and the Italic and Quince and some of those show like the price of their product versus the price of their competitors and why you're able to save money as a result of buying direct and so on. But they also could show, like the resale value after the life of the product, and really show the net impact on the customer.

Adam: [00:32:46] Yes.

Brian: [00:32:46] I mean, I would love the future to be able to only buy from brands that have features like this.

Adam: [00:32:53] Yes.

Brian: [00:32:53] Have a full track of what's available to me in my closet that I can turn into cash or change out. And then instead of even selling things piecemeal, like just set up like lots of stuff that I want to, like, clear out my closet or clear out my whatever it is.

Phillip: [00:33:10] Brian, have you seen his pitch deck? I feel like somewhere in the future, Adam is saying, "We've penetrated 30 to 40 percent of consumer brands with our program. And we know what's in everybody's closet in their garage. We have a full understanding what those things are. And then," as Pinky said to the Brain, "and then we take over the world." {laughter}

Brian: [00:33:36] Yeah. I mean, in so many ways, I'll say this, if this was available at a little bit broader level, I would only buy from brands that allowed this. That's how strong I feel about this.

Phillip: [00:33:48] So that's the consumer... I think that's the coming consumer sentiment is that this will be... It's weak link strong link. This is the strong link with the brand that identifies on multiple levels and appeals to your sensibilities as a consumer. It's a must in the future. Adam, sorry we forgot you were on the show. {laughter}

Adam: [00:34:09] Please. Keep going. And you're welcome on my sales team any time.

Phillip: [00:34:13] There's such an interesting... Go ahead, Brian. I've done a lot of talking.

Brian: [00:34:19] No, no, no, it's good. I was just pontificating for a minute there. So I'd actually I'd love to hear some examples of brands that you think are doing this well right now that you could point to and say, hey, that's a really good example. I can think of like one or two right now. REI in the outdoor goods area, they've done a good job with their sort of garage sale or their used section. Eileen Fisher...

Phillip: [00:34:45] Eileen Fisher was highly credited on our Nine by Nine report last year as being a pioneer in this space, especially in the luxury market for sure.

Brian: [00:34:53] So, yeah, but I would love to hear, Adam, what you have to say about this. Who's doing it well?

Adam: [00:34:57] Yeah, well. There's a handful of brands that keep coming up in these conversations. I have so much respect for REI, Eileen Fisher, Patagonia, of course, Arc'teryx, and a handful of others. But interestingly, it's been that same cohort for the last five plus years.

Brian: [00:35:23] Yes.

Adam: [00:35:25]  [00:35:25]There really hasn't been significant growth in the branded recommerce space because they're all using a similar model, which is that they take back every item. And so to my point earlier, it's expensive. It's expensive to do that. All of these brands are leaders, pure, genuine leaders. They care about sustainability. They care about circularity. They have high quality, long lasting products. And that's just a part of who they are as a brand. And so for that reason, they were willing to pay the price. But I do think that for it to get beyond that initial class of brands, there really needs to be a new model that is more cost effective and more scalable for that reason. [00:36:20]

Phillip: [00:36:21] And I think these things don't happen overnight. Right? So long term... Again, when I talked about consumer expectations, I started with like Zillow and Honda and Volvo. But there's Stitch Fix is another. I'm a customer of Stitch Fix. And I get a box in an email that's every month that says, "Hey, here's the stuff that you have in your closet that you've kept over the past two years and the way that they could be paired and matched with other things that you have." If Stitch Fix had an idea of what else I owned, how much more value could they provide for me as a consumer and how much stickier would that be? I think that's like the real market opportunity here for Recurate and to do that matchmaking. Brian, I think it's amazing that you could do this brand to brand today. How can you build? How can you build entire ecosystems that exist on in the future? That's a...

Brian: [00:37:23] Yeah.

Phillip: [00:37:23] Yeah.

Brian: [00:37:25] My brain's flying.

Adam: [00:37:25] And I'd love to just riff for a couple of minutes on some new consumer experiences that a service like this can enable, because as we envision what the future looks like, it's a pretty cool way to engage customers multiple times over the course of their purchase. Right now, if you think about the traditional customer behavior, the brand markets to the customer, they promote products, they heavily discount in some cases. Eventually they land that sale. And then as best as possible, they try to follow up, usually through email and usually through additional discounts. So it just feels like a very one dimensional relationship. And what we're trying to do, I mean, really, our whole goal is to enable the brand to have a more holistic relationship with that customer. And so before a product is ever purchased, a brand can communicate that that product maintains its value over time. You can imagine on the product description page, there's a description that says that this product maintains 70 percent of its value over three years on average. That, of course, changes the whole consumer's cost calculus as they're thinking about purchasing an item, especially a higher value item, similar to what you were describing earlier in this conversation about cars or houses. You think about those purchases differently because in a way, they're an investment and certain consumer products can certainly be that way as well. But then once the product is sold, we can follow up with that customer a few months afterwards to say, "Hey, are you no longer wearing that shirt or that denim jacket? Why don't you resell it with us?" And with one click, we can bring them back. Once they sell the item, then we offer them store credit. They get one hundred percent of that transaction in store credit. And so they continue back with the brand. And so the loyalty that we can enable through a service like this is just tremendous.

Phillip: [00:39:52] I think you broke Brian's brain. In Slack he's like exploding right now.

Brian: [00:39:59] Yeah, I am.

Phillip: [00:40:00] We love stuff like this.

Brian: [00:40:03] More customer touch points. More loyalty. It's all there.

Phillip: [00:40:05] It's all there. It's all there. And I think also, you wouldn't know this, Adam, but the reference to the denim jacket is that I feel like I have been groomed as a consumer. It's a thing we've been riffing on for a few years. I like sneakers because Instagram decided one day I needed to like sneakers and I bought a denim jacket from Todd Snyder because I kept getting lead back ads and they made it stupid's one day. And I just broke. And I clicked the One Click Buy with Amazon Pay, and that was it. I was done. So I've been groomed as a consumer over time. [00:40:42] I think that there are certainly negative ways and dark patterns that you can groom people in this world, especially into consumerism. Why not encourage and incentivize people to do something that's actually really good for the world? And I think that using Recurate as a platform on which to build consumer and customer loyalty, and maybe even lifetime value, with something that's inherently better for the planet... I love that. I love it. [00:41:15]

Brian: [00:41:15] It also opens up entirely new markets, because if you're a brand that's a little bit further up market, you've had trouble sort of reaching a certain audience or maybe it was a little bit more aspirational for them, you now have an entirely new market you can go after with ads, with all of your campaigns. You can set up an entirely new channel. This is its channel unto itself, let alone that everything it does for existing customers.

Adam: [00:41:44] Yeah, yeah. Well, for sure. We see it exactly that way as well. And if we really have it our way in five to ten years, [00:41:54] our hope is that this might minimize discounting of new products because you have products on your website at multiple price points. So discounting becomes less relevant and also it tightens buys as well, because you can more closely understand the demand for products, both new and secondhand and thirdhand, fourth-hand products, and how those products that you do buy new or sell new, then go into the resale stream. And so for all those reasons, our hope is that it affects more than just the resale market itself, but the broader buying patterns of retailers and brands. [00:42:40]

Brian: [00:42:41] Do you think... I mean, this might be one of those dark patterns that Phillip just mentioned, but let's say you do end up with a product that has excess inventory and the secondary market isn't necessarily all that strong for it. Instead of discounting, you could sort of use your secondary market... I don't know, sort of like instead of discounting new product, you could introduce it through your secondhand market.

Phillip: [00:43:07] It's the outlet mall, but for eCommerce.

Brian: [00:43:09] It is, yeah. Also instead of taking that to the b-stock sellers out there that are buying big lots to sort of unload through their channels, which really devalues your brand in so many ways. That's another thing that happens in many different industries. So many benefits here.

Adam: [00:43:31] Well, there's excess and overstock. Of course, that's a huge plague on the industry.

Brian: [00:43:40] Yeah.

Adam: [00:43:40] Another major one is, of course, returns.

Brian: [00:43:44] Right.

Adam: [00:43:45] We see this is a great channel for returns. The way we describe it as anything that's non new. So you can imagine the types of returns that brands get back, if they can be resold as new of course, it makes sense to send it through that channel first. But for products that cannot be sold is new, this now becomes the channel to offload those.

Phillip: [00:44:13] Ooo. I need the resale channel for the five packets of direct to consumer ramen I bought that I'm not going to eat.

Brian: [00:44:22] {laughter}

Phillip: [00:44:22] Because the one that I did was not good. {laughter} This is a great. Adam, we'll give you the last word. This has been amazing to have the show.

Brian: [00:44:29] Yeah.

Phillip: [00:44:30] And we love it. Where can people find Recurate, and where can they sign up?

Adam: [00:44:34] Well, first of all, again, thank you both for inviting me. You can find Recurate at Recurate.com. Currently, we are a Shopify app. So if you're a brand and you're on Shopify, which most direct to consumer up and coming digitally, native brands are feel free to reach out to us. We'd love to build your eCommerce program directly for you on your website with all of the benefits that we discussed earlier today.

Phillip: [00:45:14] Amazing. Well, thank you, Adam Siegel from Recurate. Give him a ring. And give us a ring. We want to hear what you thought about today's show. I want to hear what you thought about our Vision report, where you're going to read more about the product eternal and the circular economy. It's one of the many themes that we cover in our 70 page report that covers 10 trends across consumer and culture and technological modernity that you need to know. You can get that report at FutureCommerce.fm/Vision. Drop us a line at Hello@FutureCommerce.fm. All right. Hey, remember, the future is what we make of it. Let's shape it together for the betterment of all of us. And maybe you could do that with Recurate. Thanks for listening.

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