New clothes are falling increasingly out of style as younger consumers cope with economic hardship from the pandemic and focus more on sustainability. It’s not just resale reaping the benefits — clothes swapping ventures are also getting a boost.
Although the concept of trading or swapping items excludes cash by definition, a variety of online businesses and fashion brands have been figuring out ways to monetize the trend. It’s a potentially lucrative move. Used clothing in general is the fastest-growing apparel category, poised to more than double from $28 billion in 2019 to $64 billion in 2024, and overtake the fast fashion segment, according to a report from thredUP.
In the U.S., online platform Swap Society has created a tight-knit community of eco-fashion enthusiasts who interact by posting their finds on social media. The platform is a ‘managed marketplace’ dedicated exclusively to clothes swaps.
It’s not peer-to-peer, so users do not send items directly to each other. Garments are first sent to the company’s warehouse in Los Angeles, where they are processed, photographed and uploaded online, then eventually mailed to a new owner.
Each item is assigned ‘points’ based on its value, so a high-quality item can potentially be exchanged with several of cheaper brands. This feature sets Swap Society apart from most of its competitors, where one garment is always switched with another one. Founder Nicole Robertson is also considering to white-label the point-counting technology so other retailers can set up their own take-back programs.
Transactions come with a flat service fee of $4.99 on top of the points and the membership fee, which is $180 for a year, $60 for three months and $25 for four weeks.
“In the beginning we had a premium membership and a free membership just to see how people use the service, and the free people were always complaining ‘why is shipping so expensive?’ and it's like, well, that's just what shipping costs,” says Robertson.
“We saw a lot more satisfaction with our paying members, because when they sign up we would send a mail and label and a bag, and they only have to fill the bag, leave it up to their letter carrier or take it to their local post office.”
“We ultimately eliminated that free model where shipping wasn't included because it wasn't easy enough to have a good experience,” she adds.
Swap Society counts 1,200 users so far, some of whom are ordering up to 30 items per month.
Initially funded through a friends and family round, the company is now looking to raise additional financing to expand elsewhere in the U.S. and potentially abroad.
This will require establishing more local warehouses to make shipping cheaper and more sustainable. If the whole point of swapping is helping the environment, flying a T-shirt to Europe wouldn’t be very coherent.
While postage remains a headache for companies based in countries as large as the U.S., those covering smaller areas can have more freedom with their business model.
For instance, Nu Wardrobe is a peer-to-peer platform based in the UK and Ireland acting as a virtual swap shop. Users are responsible for uploading and shipping their items, and receive a token in exchange for each. The token will either be silver for high street brands or golden for more pricey ones.
Initially subscribers had to pay £1 ($1.40) per month, which was later dropped to zero to attract more people. There are now 10,000 users signed up, and Nu Wardrobe is projecting that it may have 100,000 by the end of the year.
Following a £100,000 ($140,000) founding round in October, the team is now preparing a £1.5 million ($2.1 million) cash call to venture capitalists and angel investors.
“We've seen massive growth and massive potential with our own currency code on the app, our token system,” says Alexandra Farley-Wood, spokesperson for Nu.
“It's this big community of people who all want to contribute in that way and recycle their fashion, get new fashion out there and do this in a sustainable manner.”
Fashion brands have also jumped on the bandwagon: H&M, & Other Stories, Weekday and Monki, all part of the H&M Group, collect used garments in exchange for in-store credit. In 2019, they amassed 29,005 tonnes of textiles, equivalent to 145 million T-shirts.
Four of TOAST’s UK stores allow customers to give back pre-worn items of the same brand and receive new ones, with 1,000 swaps recorded since the initiative started in 2019. The firm is also planning to organise clothes switching events in all its sites across the UK. Online luxury retailer FARFETCH, instead, has partnered with Thrift+ to provide vouchers when customers donate items to charity.
Trading garments can also be a way for brands to advertise their interest in sustainability and deepen their relationship with consumers. U.K.-based online retailer, Stories Behind Things, which focuses on sustainably-sourced goods, previously held live swapping events before the pandemic which included up to 100 attendees.
“Lots of movements are online, and it's really important for us to hold space, physical space for our community to meet,” says co-founder Jemma Finch.
“The clothes switches are a key part of offering our community ways that they can shop more sustainably, but also to meet like minded people. Our events are very social, we have food, we have drinks, we have music, and it's a really nice way for people to meet each other.”
