How recommerce innovator Yerdle is navigating the hurdles of complexities of retail
This article has been adapted from GreenBiz's Circular Weekly newsletter. Subscribe here.
If you’ve followed my coverage of the burgeoning circular economy market over the last year or so, you’ll know that I’m strongly biased towards the story of resale and recommerce. It’s the lowest-hanging fruit in circularity, and the most obvious answer to the simple question, "How do you sell the same thing twice?" The secondhand market is projected to double to $51 billion in five years, with resale driving its growth. Yet only a handful of companies are actually doing it.
A year ago, my colleague Joel Makower interviewed Andy Ruben, CEO and co-founder of Yerdle Recommerce, a white-label service for apparel retailers including Eileen Fisher, Patagonia and REI to design and execute a recommerce program, from takeback and processing to repair and resale. (I encourage you to read his piece to learn Yerdle’s basics.)
This week, I visited the Yerdle Recommerce warehouse myself — part office, intake facility, photography studio, warehouse and fulfillment center — to catch up with Ruben, take a look under the hood of recommerce and understand what that looks like in practice.
In many ways, the facility is like any other warehouse: items come in; they are processed and sorted; and they go back out. But unlike traditional retail, each item that Yerdle processes is unique.
"One of my favorite lines from Lee Scott, the Walmart CEO, was 'It’s complex, not complicated,'" Ruben, who previously served as Walmart’s first sustainability officer, told me. "I think that really fits this model … We’re a place that gets things out of closets and into the next person’s hands, but the complexity in doing that to make the market fit is massive."
The crux of Yerdle’s complexity lies in the one-of-a-kind nature of every item that moves through the facility. It’s not just a women’s large crimson Mammut Wahkeena jacket returned to REI. It’s the one, specific lightly used large crimson jacket with minor pilling on the cuffs and minor stains on the forearms near the cuffs, along the zipper and on the frontside midsection. Accordingly, it has to be processed, tracked and shipped as a unique product.
Although the process is currently relatively manual and discretionary, the Yerdle Recommerce team has built out a proprietary software system that uses eight apps to create a workflow that is impressively efficient. "Over time we’ve had to refine a lot of edges, and we still have a long way to go," Ruben told me. "But it’s pretty darn good right now. It’s the level that I would expect at a modern-day retailer, but with individual one-of-a-kind items."
Here’s how Yerdle’s process works:
1. Arrival: Coming from retail stores, a partner’s distribution center or directly from customers themselves, items from the five companies that work with Yerdle Recommerce arrive in various packages and qualities.
2. Intake: A team of skilled workers identifies, inspects, lightly refreshes (think: de-pilling and de-wrinkling) and grades items on their quality before tagging and sending them along in the process. Yerdle looks up an item’s metadata in the product catalogues shared with them by each brand partner, and includes additional visual notes about item-specific wear and tear.
Some items that can’t be re-sold — such as climbing ropes from REI — are sent back to the retailer. Items with more significant rips, tears or other damage take brand-specific paths, whether they are sent to an external partner in Colorado for GORE-TEX repair, to Eileen Fisher’s upcycling workshop or just back to the brand itself.
"We try and salvage everything we can, but if it gets to the point that it’s really bad, there’s only so much we can do because there’s standards that the customers have as well," a Yerdle employee working on product intake told me.
"If something is right on the edge of being profitable for us to repair, it might no longer make sense," Ruben explained. "We’re moving things out of the ‘happy path’ at any moment that we can’t get resale to be the best and highest use. It’s got to make sense from an economic perspective, otherwise it doesn’t make sense of the retailers and brands."
3. Photography: Items ready for resale are brought to Yerdle’s photography studio, a series of lighting rigs, mannequins, light boxes, cameras and monitors set up for rapid turnarounds in the back corner of the warehouse. Given the thinner margins of resale compared to traditional retail, Yerdle takes only a few minutes for styling, shutter and post-processing in order to justify the time and effort of the photo. While some brands, such as REI, choose to use photos of new items for their resale platforms, others such as Patagonia prefer that new photographs are taken for every used item.
4. Stocking, picking, packaging, shipping: Yerdle uses a variable location approach to stocking, an approach pioneered by Amazon. Items can go anywhere in the warehouse rather than sorting by specific item, increasing the efficiency of space and simplifying the picking process. Rather than sorting through a bin of 12 nearly identical blue fleece Patagonia sweatshirts for the one medium with a small stain on the right cuff, a Yerdle employee just has to pick out the one blue fleece in a bin that might also contain a pair of blue jeans, a grey water bottle, a black T-shirt and a striped scarf. "The whole idea is to leverage the advantages of one-of-a-kind items and minimize the disadvantages," Ruben explained.
In total, the entire process from arrival to resale takes less than two weeks. While Ruben wouldn’t share the exact number of items Yerdle processes every day, he said that the number is more than 1,000, though there is potential to process several times that number.
With about 75 employees — roughly four times more than the company had this time last year — and having launched a new program with outdoor apparel company Arc’teryx in June, Yerdle Recommerce continues to grow its partnerships, capacity and complexity.
Take Yerdle’s new beta feature: When customers search for an item that’s not in stock, they can request to be notified when it’s available. In the future, this will go one step further. "We can go out to a customer and incentivize them to sell that item back to the brand." For example: "'Hey Andy, you know that kid’s sleeping bag that you’ve had for four years and your kids have clearly outgrown? Put it on your porch and we’ll email you a gift card,'" Ruben explained.
I asked Ruben about the competitive landscape of service providers enabling recommerce for brands — thredUP, The RealReal, The Renewal Workshop, Stuffstr — a small number of players in a market with serious potential for growth.
"A year ago it was confusing what we were doing and why we were doing it," he said. "Now, people think it’s a really good option as brands are increasingly trying to figure out how to position themselves against players like third party marketplaces. In a few years it will seem so obvious that everyone is doing it."
Clearly, Ruben is in his element. "I feel like a kid in a candy store. We get to reinvent and figure out all of these things from a space that is infinitely more interesting [than traditional retail] because it has two sides of a market, not just one."