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The Virtual Century – Part 2: Digital tools for sales and circularity.

21 August 2020

Let’s continue our analysis of a systemic approach to sustainability. After demonstrating the disruptive effect of digital solutions on the design chain and the shift in the value chain, we turn to digital transformation as a facilitator for brands and retailers, and we share a few options for financing this conversion to digital.

We will be addressing the subject of going digital for B-to-B sales, the management of this shift, of circularity, and the end of the product life cycle, by attempting to answer the following questions:

How can I adapt B-to-B sales to the post-COVID situation?

How can I approach secondhand sales and make them part of our brand culture?

What are the options for financial support?

 

Let’s start with a few key figures:

In 2020, digital is the only sales channel that has shown any growth, with over 16 million transactions, and for lingerie, we can notice the appearance on scene of new types of key players, such as Lidl and Amazon.
Source: Kantar

The level of penetration of these technologies varies greatly depending on the company in the industry, particularly according to their size and market position.  Technological innovation provides answers to two major issues facing the industry:

  • The need for increased flexibility within a context of uncertainty.
  • Reinvention around greater social and environmental responsibility.

Source: a study of new business models from L’IFM | Le Défi. June 2020

 

The measurement process:

Brands are committed to educating consumers and are ready for greater transparency about their carbon footprint; such is the case with Organic Basics, a Danish lingerie brand that has revamped its manifesto to create a “low-impact website”, by implementing a tool that measures and shares the carbon footprint of its own e-commerce site.

Launchmetrics is a B-to-B platform designed for brands and agencies which provides software and data analysis tools to measure ROI. Examples include sample management for photo shoots, showrooms, and press agencies who, with online monitoring, can reduce losses by 85% and provide a 98% increase in productivity for sample management. Less samples means improved product development and, thus, raw-material savings…

“25% of professionals consider their main marketing challenge to be the measurement of results”. Source: Lauchmetrics

One direct consequence of the lockdown has been the emergence of digital showrooms and online fashion weeks as a new standard for presentation and sales. There are two models of agility in these times: Instagram FASHION WEEK  and its guide posted online in early June by the Haute Couture Federation, or the digital showroom from the Tomorrow Ltd. Group, which owns the Marni and Coperni brands; the promotional video for these new habits was launched on July 2nd.

 

Circular platforms:

In France, in 2019, everything secondhand was a vector for growth representing around 1 billion Euros in sales. This sector has a growth potential of between 20 to 25% per year, according to IFM | Le Défi.

Here are two examples of French start-ups who offer easy, digitalized logistics, using their platforms that are set up as tabs or sections on a brand’s website.

“Circularity is a development worth watching. 40% of French consumers plan to participate in the used-clothing market in 2020, and for 50% of them, it will be at the expense of new apparel. French consumers’ expectations are high, and commitment is essential to stay ahead of the competition.”

Hélène Janicaud, Business Unit Director–Fashion Kantar

 

DISRUPTUAL, founded in 2016, is a software program and C-to-C platform available for brands. It allows consumers to re-sell their purchases directly on the brand’s website, and it is simple and flexible to use. For the brand, it allows them to stay connected to their consumers and add new storytelling elements and traffic, if they choose in-store drop-off…Thus, the Ikids and Etam groups have already decided to use this option, and the 1.2.3 brand recently launched its “second life” project in collaboration with Disruptual.

 

REFLAUNT is a French start-up offering a multichannel resale tool for secondhand products. Through a brand’s website, the Reflaunt solution connects consumers with all existing secondhand platforms. This way, it offers a two-fold benefit: strong scalability potential and an ultra-intuitive app for the customer, using his/her previous purchase history. Highly popular with luxury brands, and using blockchain technology, the Reflaunt resale system is now able to guarantee the authenticity and traceability of products.

Apart from the fact that these solutions allow brands to maintain control over their secondhand product market, they offer low-risk, direct access, using a tech-to-market operational system, while building customer loyalty through their sales platforms.

What is the situation for lingerie? This most intimate product of all carries a certain hygienic psychological barrier that makes circular sales more challenging. Again, start-ups are flourishing and teeming with new ideas. From my standpoint as a consultant, a brand can resell a secondhand top and suggest the purchase of a new, matching bottom, or DIY solutions to change the lining of panties in-store or to sell a disinfecting solution…And last but not least, couldn’t this business model be adapted for suppliers’ deadstock or brands’ residual products?

The sensitive part of this shift remains its financing; key industry stakeholders and the French government are getting mobilized and have thought about solutions to help the sector. Thus, the BPI or Le défi mode de france offer repayable bridge financing, and the NEF bank finances only small enterprises with sustainable values.

All these solutions are already highly intuitive for sustainable native brands and are proving to be increasingly accessible to brands looking to take their business model into the future and durably launch into this new, sustainable sourcing cycle, in order to react to the crisis in an unprecedented fashion by highlighting the operational side and the value proposition. This list is not a comprehensive one, because other start-ups are working on prototypes that combine carbon footprint measurement and carbon offsetting proposals…

 

Aude Penouty
Entada Textile

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