Melbourne-based e-commerce platform Airrobe launched three years ago with a mission to bring the circular economy into the mainstream fashion industry. Here, we chat with Airrobe’s new global head of partnerships and general manager, Beth Glancey, about how the business is making it easy for retailers to get involved in circular fashion and the biggest sustainability challenges for retailers in the industry right now. Inside Retail: Can you tell me about what Airrobe offers consumers? Beth Gla
th Glancey: Simply, we allow a consumer to save all of a product’s information to a digital circular wardrobe at the point of purchase. So when they’re shopping on the retailer’s website, we allow them to add the item to Airrobe, which saves all that information, and when they’ve worn and loved it, they can then relist it in one click, either for sale or rent or to be recycled.
Once you shop on Airrobe.com, you’re in the peer-to-peer marketplace and you’re shopping in this secondary retail space. We power that marketplace and we unlock supply by bringing the merchant and the consumer together.
I really think we’re solving a consumer problem that people didn’t even know they had. If you think about what the peer-to-peer re-commerce marketplace looks like today for fashion, largely, it hasn’t changed since eBay launched. The listing process is so manual, and it’s what ultimately stops people doing it because it’s too hard.
Airrobe removes the friction from that listing process and ultimately unlocks supply, which is going to change the way consumers shop and the way they view circularity. There’s a cohort of dialled-in, conscious consumers using a plethora of platforms already, but we want to address the masses. We want them to see their wardrobe as an asset and something that they can monetise. You can buy something full price, you can wear it, love it, and then you can give it a second life. And we’re going to make that part really, really easy.
Airrobe founder Hannon Comazzetto.
IR: And what’s the Airrobe offer like for retail partners?
BG: What we ultimately offer retailers is seamless entry into the re-commerce market. If you think about the sustainability practices they have available to them, they’re really in manufacturing, transparency, ethical supply, right down to the types of materials they use.
But they’re still producing more and more clothes that they don’t always sell at full price. They’re ultimately adding to this glut of fashion. They want to create change, but they really don’t know how. So we come in and partner with them to provide them with our circular wardrobe product. Your customers can add their items to the circular wardrobe, then we take over and manage the entire peer-to-peer marketplace. We give the brand seamless entry into the re-commerce market with no heavy lifting.
IR: If you look at the circular fashion industry locally and globally, where do you think things are right now?
BG: In terms of circularity, Australia is really in its infancy and it’s because we don’t make it easy. So if you think about the options that we have available to us today, they’re very manual. It’s a particularly unqualified environment if you’re thinking about peer-to-peer sites like eBay, or you’ve got marketplaces, which are uncontrolled environments. All of it still requires an investment on the consumer side, from a listing point of view. Because it’s so full of friction, people aren’t using it. So what we’re finding is a very, very small percentage of people will actively resell or recycle clothing or rent it.
What we’re hoping to do is change the way consumers and retailers view circularity. We want it to be part of the consideration at the point of purchase. One of the powerful things that Airrobe does is, similar to Afterpay, when the widget is on the retailer’s site, we show the potential resale value [of the item]. It’s a pricing algorithm. It’s proprietary. We pull all sorts of information – from other peer-to-peer sites, from our own peer-to-peer marketplace – such as the fabric and the brand. And we show the customer at the point of purchase what the resale value of that item can be in the market today.
We’re finding that, from a merchant’s point of view, we drive up conversion and average basket [size]. But [we’re also shifting] the consumer mindset. She is now viewing that item as an asset: “Hmm, I was gonna buy the $200 dress, and it’s selling for $80. Or I could buy the $400 dress that’s actually selling for $300.” Part of what we’re doing is trying to shift consumers out of fast fashion and get them to invest in pieces that can become an asset in their wardrobe.
Once you’ve signed up to Airrobe, you’ve got your app, and you can see all of the items saved in your circular wardrobe. You’ll be able to see how they are valued as an investment in the market today. It really is changing the way consumers start to think about what they’re shopping for. We’re really trying to drive that change of behaviour away from fast fashion. This is achievable. Women love fashion and fashion is seasonal, and people want to buy new things. However, we show the consumer that if you just spend a little bit more, and you now start to view this product as an asset, you don’t have to always buy into the cheaper items, you can buy into the more expensive item. Those brands are typically already participating in more sustainable practices, so they’re supporting the true circular fashion economy.
IR: Where is Airrobe right now in its journey? I know Airrobe received some investment a couple of years ago and launched on The Iconic recently, so there has definitely been some great growth.
BG: Launching with The Iconic was a real game changer for us, for obvious reasons. They’re the biggest fashion retailer in Australia, and they’re incredibly visionary. They are sustainably focused and really trying to drive change within their own practices. So launching with them and unlocking the brand awareness of Airrobe connected to that partnership has been incredible. We’ve seen hockey stick growth since September last year, in terms of merchant onboarding, the amount of marketplace listings, and the amount of purchases on the marketplace.
Hannon Comazzetto is our CEO and founder. She founded Airrobe two years ago, and she’s been working away in the background on the tech solution. She came from an M&A background working in consulting and with a big fashion retailer, where she saw the underbelly of fashion and the waste associated with excess inventory, and was really quite horrified by it. That started her whole journey [that got her] to this idea.
In the last five months, we’ve seen extraordinary growth month-on-month. Our merchants are increasing, which drives huge supply in the marketplace and therefore demand. We’re getting amazing organic growth as every time we sign a new merchant, we double our customer base as we access their customers.
IR: If we look at 2022, what has Airrobe got planned for the year ahead?
BG: In the short term, our number one objective is to onboard every single fashion retailer in Australia and get in front of as many brands and retailers as possible to help them enter the circular economy and educate the customer. We’re dealing with an infant market here in Australia in terms of the desirability and uptake of the circular economy and the understanding of re-commerce. When we partner with our brand merchants, the number one objective we can work on together is education.
When we do a good job with the merchant of educating the customer on what Airrobe is and why you would want to enter the circular economy, we can unlock potential. Our opt-in rate varies wildly from merchant to merchant. It’s really down to two factors. The first is – how engaged is a brand’s existing customer with sustainable practices and how conscious are they? We’ve seen that the more sustainable the brand’s values are, the higher the early adoption rate. The second comes down to education and the ability for merchants to communicate the AirRobe offering and why someone should “Add to AirRobe”.
IR: What would you say are some of the biggest challenges of being in the circular fashion industry at the moment?
BG: It’s well known that circular fashion is gaining a lot of momentum. And sustainability has become incredibly topical and important. But with that comes a lot of noise and greenwashing. Wading through the sheer volume of noise that’s out there around sustainability is one of the challenges that we have as merchants and consumers: “I’ve heard that it’s important. I know we’ve got a problem, but what do I need to do?” There’s a real plethora of different ways that consumers and brands can go about addressing sustainability, right? We’ve spoken about all of the things you can do in manufacturing. Some brands are doing ‘bring back’ schemes, recycling items into plastic for filling couches. I would say that consumers are still somewhat paralysed.
The biggest problem for brands that are manufacturing or selling fashion is how they can be sustainable at scale in a way that is financially viable, because the practices available to them in supply chain, transparency, and materials are expensive. They’re margin-erosive. It’s difficult to implement those changes at scale, because it’s incredibly financially stressful for brands. Being able to enter the circular economy or become more sustainable at scale in a financially viable way poses the biggest problems, in my opinion.