Rheaply acquires Materials Marketplace to scale reuse across North America

23. Karin Dillie on scaling the circular economy in retail

VP of Partnerships at Recurate

Welcome to The Multi-usiverse. Alongside your guide, Garr Punnett, explore worlds of opportunity within the use of physical resources across companies and organizations. Consider this a field guide in scaling reuse, refurbishment, remanufacturing, and recirculation. We’ll learn from guests who have ventured down this path and carved their way. Our aim is to discuss the successes, opportunities, and challenges of scaling a connected, circular economy. On this episode we’re joined by Karin Dillie, VP of Partnerships at Recurate.

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Audio Transcript:

[00:00:07.330] – Garr Punnett

Welcome back, masters of the Multiusiverse. My name is Garr Punnett, Chief Impact Officer here at Rheaply. Today we’re joined by Karen Dillie, VP of Partnerships at Recurate, and we are able to learn what peak design, outerknown, and KILLSTAR all have in common. The answer is more complicated than this is they are clothing brands that use Recurate to solve their ecommerce needs for the market. Enjoy this entertaining conversation with Karen. She goes into the details. I try to drag her up back into some of the explanations, but then we plow through right into some of the really good stuff that we learned about what’s happening in the ecommerce market. Karen Dillie, thanks so much for joining us today. We’re here with Karen, VP of Partnerships at Recurate. We were just actually having a conversation around how to cultivate sort of an audience around our brands. And I was sharing the thought that it’s very difficult to do on our end, and we’re still trying to figure out who we speak to when we get media, when we get attention. What have you all found successful? You guys had a big announcement recently and you’ve been doing some big things.

[00:01:19.450] – Garr Punnett

What have you found to be most successful?

[00:01:21.930] – Karin Dillie

Yeah, it’s a great question, and it’s not easy as someone who’s been in business development and sales for a long time, especially because I think similar to you all, no one’s ever owned resale at a brand before. No one has done it. And so I joke, but it’s not a joke. Like if you’re selling marketing automation, you know, you got to sell it to a marketing leader. And when you’re selling resale, it’s like, who we talk to? Who owns this in a company?

[00:01:48.610] – Garr Punnett

That’s funny because resale, you would think someone might go, oh, that’s sustainability or that circular economy kind of not always the case sometimes. And it almost depends on the purview of maybe the individual, their role, their job, whatever it might be. But it can largely change because it’s new. It will largely change across any organization.

[00:02:09.270] – Karin Dillie

Yeah. And because we are a b2b company and work with brands directly, brands and retailers, we also do have a customer facing component. So there’s a huge part, especially brands, where the marketing team, the merchandising team, all have a part in what the voices to their customers. And so that’s a big part of what we talk about when we’re strategizing with brands or consulting with them and trying to really think through what their resale strategy is. It’s really a shift in the way you talk to your customers. So therefore their ecom teams or digital teams are all involved as well, because it’s not just like slap on something and one team goes and does it. It’s really a rethinking of the way you position your brand. That also changes who we talk to and how we talk to them.

[00:02:56.320] – Garr Punnett

Yeah. And makes for some massive rollouts. Well, we’ve jumped into a great conversation here and I do think I need to take a step back to reintroduce re curate to the audience. Could you please talk about Re curate and what you all are providing as a solution to your clients?

[00:03:15.530] – Karin Dillie

Yeah. So recurring started about two and a half years ago at the beginning of 2020. So we are a fully digital company. We are work from home, everybody, which is pretty cool to see and that’s also shaped who we are as a company. So recurring integrates directly with brands ecommerce so that they can own resale. So taking the behavior of what customers are really doing at a very good and very fast pace. Which is selling on ebay. Thread up the real real Poshmarks. PayPal. Kind of all of these. What we call third party marketplaces. Taking that behavior. Integrating it directly into the brand’s website and that allows them. I was talking about earlier to really change the narrative with their customer so they get all the data on when a customer wants to sell. How much it sells for. How long customers keep their items for. Historically, if you think about it, brands and retailers have only known all the information up until that sale point and then it’s kind of like Poof, you’re gone forever. And what brands really want to do is develop that loyalty. And so this is a huge way to do that.

[00:04:27.910] – Karin Dillie

We’re helping them. So we are the technology. We’re really a resale operating system. So within that, for each brand, it’s going to be a little bit different how they want to engage with resale. Some want to do peer to peer that’s directly going from one customer to another. Some are going to want to do some version of take back where in stores or online their customers ship them in and we work with operational partners to be able to list and fulfill those items. Some are going to want to do recycling or upcycling, things like that. So we basically created optionality and what they can do to create their resale program.

[00:05:06.410] – Garr Punnett

How long did it take for you all to hone into those options? Because I’m sure it didn’t start with hey, here’s your suite of options. I’m sure it was hey, we have the solution. And then the market was like, great, we actually want a different one. How long did it take for you, the guys to really figure that out?

[00:05:21.420] – Karin Dillie

Yeah, it’s ever evolving and we have great brand partners who give us a lot of great feedback, as you can imagine. But we started as peer to peer because we really see that as the most scalable of the resale options. It’s the least resource intensive from a brand perspective. So you don’t need to set up a warehouse, you don’t need to create photography stations and conditioning and all that. And it’s also what customers really want to do.

[00:05:48.450] – Garr Punnett

This is the time where I need to unpack something. You said you said photography stations and something else.

[00:05:54.930] – Karin Dillie

Yeah, warehousing in general. So we can also unpack this a little bit. But I have been resell my whole career, which is kind of maybe the most millennial thing about me. I don’t know. I also watch TikTok often, so maybe that’s the most millennial thing about me.

[00:06:10.820] – Karin Dillie

It might be a little pushy, Gen Z, but yeah, okay, great young millennials. So I started at Sotheby’s, and there it’s a pretty labor intensive process to sell anything. There’s photography station, you have to shift the item in, you have to store it. Then when it’s sold, you have to ship the item out. And then I worked at the Real World, which is pretty similar. They’ve used technology to really scale that. But it still is a labor intensive process. It comes in, you have to sort the items, grade them, condition them, store them until they sell. And so what I have seen is technology has allowed resale or allowed consumers to engage with resale in a different way and essentially lower the price point at which people could sell. So throughout my career, I like to keep lowering in price point, which is interesting, but to me that means that resales become more accessible.

[00:07:03.970] – Garr Punnett

Yeah, I think lowering in price point, but probably broadening and scale. I so rudely interrupted to detour there. We were talking about how you isolated the peer to peer model and that’s where you all were starting and then where you all were expanding as according to other client needs.

[00:07:21.220] – Karin Dillie

Yeah, so it’s been pretty interesting for us because we wanted brands to be able to spin up resale fairly quickly. So a lot of our brands can spin up a resale site integrated into their ecommerce site in less than eight weeks. And that’s because peer to peer makes it really easy. We actually just launched a resale report about circularity and really examining how customers feel about brands and the role they play in resale. And one of the things that excited me was that we isolated this group when we called circulars. So there are people who buy and sell. A lot of people say like, oh, I either I just sell, or oh, I just buy. And what we saw is this growing group, particularly under 30. So a lot of Gen Z, they want to do both buy and sell. And they actually prefer peer to peer because they want to get as much value for the items that they’re selling. They want to keep the value, and so they don’t want to pay for all that warehousing and shipping and all the extra costs.

[00:08:23.510] – Garr Punnett

Very cool. So then I’m curious if you went deep into the demographics I’ve seen historically, personally, anecdotally this be female dominated, is that still continue to be the trend or are we starting to see a sort of a gender equality there in terms of being the circulars.

[00:08:43.650] – Karin Dillie

So I’ll just note the headline that we lead with, because I think this is super important, is that up to eleven geographies we surveyed, which included US Canada, and a lot of Western Europe, 74% of people engaged in some sort of resale. 74%. So do you think about it like that? I mean, yes, it’s predominantly female, but more and more men are doing it. And that’s across all demographics too.

[00:09:13.400] – Garr Punnett

And that probably works out because even typically female audiences, viewerships, demographics being on a cutting edge when it comes to sustainability, that it’s only going to be men that might be lagging behind and then starting to use that solution just as it gains more traction and more scalability.

[00:09:29.910] – Karin Dillie

Yeah, and we have a couple of great brands that are focused on men specifically like Ministry of Supply. They focus on close for men. They’re doing a great job of selling their items. They’re selling quickly. Peak Design creates fantastic camera bags for outdoor adventures and they’re doing really well. And a lot of their customers buy because the items have such strong resale value. So they’ll buy new, can look at like the PDP and it will say for the everyday backpack, you can buy it for $269 or you can buy it secondhand for $160. And so when they go to buy new, they can see really the value of what the item is secondhand. And we pulled some stats on that too. In our survey we asked and about, I think like 54% of respondents wanted to get at least half the value in resale as what they paid for it new. So now customers are thinking this through and it’s a consideration when they buy.

[00:10:29.300] – Garr Punnett

Something new that is so applicable to what Rheaply has going on on our end, where I think we’re generally fighting against a stigma of used and what we see on our end primarily being our furniture, our fixtures and our equipment that we focus so intently on. But there’s still a stigma even in the business world where again, people want the brand new shiny thing. We’re starting to see it change a little bit, but clearly you all are starting to see it change sort of monumentally in terms of consumer preference and in terms of consumer impact.

[00:11:02.490] – Karin Dillie

Yeah. And 63% respondents said that they thought brands could do more, which I thought was like this huge call to action for brands and retailers. And I will say I’ve seen a change in the past year and a half. So I’ve been a retailer for a year and a half now, been talking to brands about a year and a half ago we were like, this is why you should do resale and now it’s less, this is why you should do it, and it’s just when they’re going to do it and how. So those options that we talked about, where there’s peer to peer, there’s takepack, there’s recycling and upcycling, they’re just figuring out what makes the best sense for their brand. But it is soon in the way that sustainability has become table stakes. I believe resale will become table stakes as well.

[00:11:48.020] – Garr Punnett

Absolutely. What else were you all pulling from in terms of the report here? I know it was just launched this week, so anybody else can look it up. I’m sure you’ll have it posted on Re Curate, but what else did you all find the most interesting out of that report?

[00:12:04.770] – Karin Dillie

There were so many fascinating things. I think one thing is that a lot of brands we talked to think that the motivation is always sustainability and we talked about it, about this earlier. Brands are like, oh, maybe the sustainability person should be the one running this and that’s definitely a motivator and it’s something that interests them, but it’s really value. So customers are willing to try a new brand if they can try second hand first and they want to try from the brand. So there’s a huge customer acquisition play as well. And they’re willing to do that because they don’t have to pay the full price, they can pay a lower price and be able to get the same quality, understand the brand, know it, most likely love it, and then they come back and buy full price or buy more second hand.

[00:12:50.690] – Garr Punnett

I love that because that so speaks to who I am as a consumer of now I’m in a phase, I don’t know, at least in terms of how my spending patterns of investing in the things that I want. So typically it is that exact sort of process of, all right, I need to figure out if this is a quality and stands almost up to the rigors of my life and my use and then investing in that brand. So it’s really cool to hear that that’s in general what’s happening when people care about the brands that they’re investing in.

[00:13:19.960] – Karin Dillie

Absolutely. And what’s interesting, I think different side of the same coin, is that circulars actually rotate their closet out much more than non resell shoppers or even fully buyers or solely sellers. And at first you can be like, oh, they just love to flip stuff, they just love, you know, they love clothes and materialistic. But really what it is, is that they’re buying with the intention to use it and then sell it. So they’re living up to that name of circularity and they become really great customers for brands because they come back and shop much more frequently, almost twice as often. So now you have these customers that want to be your most low customers because they want to wear it, take an Instagram picture with it, enjoy it, and then they sell it. And to me, that is the antidote to fast fashion that everyone gets, rightfully so, is doing so much damage. So rather than buying it, throwing away, why not buy quality piece as a resale value wear it. Take your Instagram picture or your b-roll. I just downloaded that. Take your b-roll picture. I know, I’m telling you.

[00:14:28.350] – Garr Punnett

Oh, I think I have heard of this, yes. Okay. Is this the one where you’re in the moment you get prompted? Yes.

[00:14:34.830] – Karin Dillie

You have two minutes. I’m in like ten meetings a day.

[00:14:38.800] – Garr Punnett

Better take a picture of that laptop.

[00:14:42.630] – Karin Dillie

Me and you.

[00:14:43.570] – Garr Punnett

Yeah, exactly. That prompts, really the next question of I can hear the critics right now. Right? I can hear the critics say, is that circular? And it’s like, yeah. Even though there is impact I think I would almost prefer that. Even though there’s impact in the logistics and moving things from here to there, is that offsetting? And in my opinion, probably, yes. The other habit of buying something in order to wear it once or twice or three times and then getting rid of it. And Goodwill. Although a great organization and in a lot of ways an awesome secondary market option. There’s still so much that they have to address in terms of that volume that there’s still so much that ends up in landfill or ends up in landfill in other countries when those options are also exhausted in other nations. And so I think this is the growth of obviously an opportunity for them to have that market liquidity, to be able to sell so quickly and maybe across such equals their peers that they can maintain a value without, again, some sort of high depreciation right. Where it’s not like they’re spending $100 and then they see a $25 return on that item.

[00:16:02.670] – Garr Punnett

They might spend $100 and see $80, see that discount play out and then they get but they still get their use out of it and they see that being worth $20.

[00:16:11.680] – Karin Dillie

Exactly. And the other side of that so that’s the consumer side of things. We also look at it from the brand side of things, which is right now they have no insights or information or data about the secondary market. So they don’t know that customer that you’re talking about, they don’t know how long they have it for. They don’t even know what the items are selling for. So when we talk to brands, we often pull the numbers from Poshmark and Ebay and Depot. We’re like, this is how many items are transacting, this is how much on average they’re selling for, and really show them how big the market is right now without them being involved. And once they get involved, what we are doing is feeding them back that information so that they can make better decisions about production. So for the critics, as you can rightly here, start talking and as they.

[00:17:00.780] – Garr Punnett

Should, we should all be in operating in a place of feedback. Yeah, exactly.

[00:17:05.710] – Karin Dillie

And what we’re really trying to do is help them better understand how to predict demand. Because at the end of the day, that’s where a lot of the waste comes from, a lot of brands want to overproduce just in case demand is high. When you have a resale marketplace, you can compensate the demand for new products with secondhand products. And there are tons of your products out there in the world and so tapping into your customers closets or their garages or wherever it may be is a great way to supplement that.

[00:17:37.530] – Garr Punnett

Absolutely. Have you all seen any or is there any been any feedback from clients around the potential to get more design related feedback? Has that been a part of the conversation where there might be something that either wears too quickly or they want to try to emulate the success of something in a cycle?

[00:17:55.110] – Karin Dillie

Totally. Peak Design was one of our first time, so they’re one of our best and their catalog doesn’t change a whole ton. But what they do is keep improving the item and a lot of that is based on how the product is in the second hand market. So like, oh, that strap is like starting to tear before anything else tears, we need to fix it. And so that is also to bring full circle to beginning a conversation that change in the way you interact with your customers. Being able to say like, we are actually creating a high value product and it’s quality and lasts a long time. And one way to stand behind saying that is to show that there’s a resell market for it and that those items do last.

[00:18:35.530] – Garr Punnett

Incredible. What’s sort of on the horizon for Recurate it’s obviously getting some clients, getting some big logos. But what can you share with the audience here on what they can expect next? Maybe a consumer of the products that you all are offering to clients.

[00:18:53.130] – Karin Dillie

Yeah, I love it. So we have over 50 brands signed, about 25 live, so expect another about 25 to launch in the next couple of months.

[00:19:05.370] – Garr Punnett

Any big names that you can say client wise? You said peak, you said who did you say earlier?

[00:19:10.630] – Karin Dillie

Yes, our current customers we work with Steve Madden and Dulce Vita, they’re part of the same family of brands. We also work with Clairv, I don’t know if you’ve ever heard of them, but they have a great following, including and they do leather handbags and they actually did something when they started. They did an in store take back. They allowed their customers to come in and drop off any item and then they gave them site credit to spend there at the store. And that’s really well, their customers were like, wait a second, I want to do this, but I don’t live near a store. And they’re like, just hold on a second. So their resale marketplace has done really well. It’s actually beautiful as well. I frequent it too often and then we have outer known so another big men’s clothing, men there as well. So kind of really like all categories. A lot of different price points. We work with more luxury, like Mara Hoffman, so higher price points, items that special occasion things. So it’s really kind of been across the board and then more to come. I will say we just launched with KILLSTAR, which is a golf brand, and they have a great following and their products last for resale.

[00:20:24.150] – Karin Dillie

So what’s I think fascinating is a lot of people think of this small group of products that are super high quality and they’re like, these are the ones for outdoor, but not outdoor, but these are ones for resale because you can go outdoors, you can do whatever for them, when really so many brands.

[00:20:39.910] – Garr Punnett

What I love about that is that I can relate to outerknown So as being a fan of the brand. It seems like, again, what’s been so cool to see for these first companies to join and then more to come is these companies have their followings and their followings are dedicated consumers of the products that they put out. And so I’m looking at being like, oh, out of known. I would love the potential again to pick up some outer known options, but then again, further invest in the brand just as much as I think someone who frequents KILLSTAR did I get that right? Would be loving the products that service exactly the community that they want to be a part of.

[00:21:20.910] – Karin Dillie

Exactly. And so really, when you integrate resell on secondhand, you open up this new way of engaging with your customers in the same way that people were like, oh, ecom is so different 20 years ago, and how are we going to have the same experience in ecommerce that we have in store? Well, now it’s like integrate resale into the experience you have with your customers and it just grows the pie. There’s no other place where you can buy outer known new and second hand together. And so that’s what makes it such a unique experience. You could check out right now on outer Known with a second hand jacket and a new pair of pants. Nowhere else can you do that.

[00:22:00.170] – Garr Punnett

No. In fact, now that I know that and I was looking at that this weekend, I was like, I should have put two and two together. That that was you all well. Excellent. Thank you so much for joining us today, checking in and filling us in on the great work that you’re doing on Recurate. Anything else you would want to leave the listeners with?

[00:22:18.010] – Karin Dillie

No. If they want to look at the retail report, it’s Recurate. Com resale report. So we try to make it pretty easy. But I will just say, having been in recent my whole career, it is so exciting to me that brands are finally on board working at. Sotheby’s we would often have to send Van Gogh or things like that to the Van Gogh Museum in order to get authenticated. So there was this kind of difficult or tenuous relationship between art and the artists of state. And so I had always thought it would be so cool to be able to fix that relationship or bring the original creators back more into the space. And so it’s been fantastic to be a part of that.

[00:23:05.270] – Garr Punnett

Are you all hiring?

[00:23:06.810] – Karin Dillie

Yeah. Come on down. Especially if you’re an engineer. Let us know.

[00:23:10.250] – Garr Punnett

Hey, you and me both. Look at us both here, people. If you’re an engineer, there’s equal opportunity here. Excellent. Take your time.

[00:23:19.300] – Karin Dillie

I promise.

[00:23:19.990] – Garr Punnett

Yeah, exactly. Well, check it out anyway. The careers page recurate. I love hearing all that. That makes so much sense, though, in terms of I love your example with Van Gogh, though, because, again, decreasing the latency of which things can be resold and then increasing the liquidity of those things in the marketplace. Amazing things can happen with a brand.

[00:23:41.120] – Karin Dillie

I’ll just say. My best cocktail story that I’m going to ruin by telling everyone on this podcast, yes, I carried a Van Go to Amsterdam on a plane, so I have first hand experience of having to get the items.

[00:23:55.210] – Garr Punnett

You were in coach and the Van Gogh was in first class. Or how did that work like this.

[00:24:00.590] – Karin Dillie

In business the whole time?

[00:24:01.680] – Garr Punnett

The whole time.

[00:24:02.930] – Karin Dillie

And my Van Gogh, someone was like, Excuse me, why won’t you put that box down? I’m like, Never putting the box down.

[00:24:09.620] – Garr Punnett

The box stays with me. Excellent. Thank you. Kara, thanks for such an awesome time today.

[00:24:15.980] – Karin Dillie

Yeah, it was great chatting with you. Thank you for having me.

[00:24:18.220] – Garr Punnett

Yes, ma’am.

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