26. Nina Ahuja on re-commerce in retail and fashion

Audio Transcript:

[00:00:07.060] – Garr Punnett
Welcome back masters of the Multiusiverse. My name is Garr Punnett, Chief Impact Officer here at Rheaply. Yes, it’s been a while I know, but we’ve had a lot of cool things going on here at Rheaply and lots of cool projects in order that we’ll be announcing more of. One of the big announcements was actually our recent acquisition of the Materials Marketplace. If you’d like to learn more, please check out our website because we have a lot of cool things probably coming to a city near you within the next year. Otherwise that’s not what today’s podcast is about. We actually get to talk to Nina from Trove. We have a great conversation about the e-commerce market and the growth that Trove has seen thanks in part to really her leadership in the retail and fashion industry. You’re really going to love this one. I had a great time and she makes my job very easy because she’s so knowledgeable and engaging. So enjoy. With that we get to hop right into our conversation with Nina. Nina, could you introduce yourself and explain again who you are, where you are and which organization coming from and what you’ve been working on?

[00:01:13.570] – Nina Ahuja
Yeah, absolutely. My name is Nina Ahuja, I’m the Head of Business Development at Trove. We are an E-commerce company and what we do is enable the brands that you know and love to be able to have a fully scalable and profitable e-commerce channel. So we call it our operating system. So we provide both the technology and operations to retail companies to be able to have this fully functioning third channel.

[00:01:39.990] – Garr Punnett
So what I love about this podcast again is I understand all of the language juice in there but we get to start with what does it mean? Which favorite brands do we get to picture as we talk about these systems?

[00:01:50.920] – Nina Ahuja
Yeah, that’s a great question. So Trove is not consumer facing, we’re a DT company. So the way that you as a consumer are interacting with us is every time you shop Patagonia, Warn, Wear or REI resupply or Onward by On Running which just launched or All Birds Rerun or Lululemon like new, we are actually shopping the technology operating system provided by Trove to these brands to be able to power their circular economy.

[00:02:18.690] – Garr Punnett
And so that’s a big differentiation in the market because what you’re saying is you’ve got technology that helps enable those brands to connect that e-commerce element to their consumers but then the operations behind that is also huge. Can you talk a little bit about what the operations mean to that total picture?

[00:02:36.640] – Nina Ahuja
Yeah, absolutely. So brands are in the business right now of selling items once, not necessarily getting those items back into their ecosystem and we see retail profitability in the economic model today as brands make stuff and then they make money off of that stuff. What we’re really trying to understand is how can we have economic growth without producing new items, because that’s really where the climate change effects are happening, is actually in production of new items. So the way we think about it is to say, okay, we’re going to actually retrofit this model to include a circular component where we’re bringing items back into their ecosystem. So what that actually means on a tactical level, from an operations perspective, is saying, all right, we’re going to scale your resale strategy by creating this new profit center. We’re going to help you get items back that are already out there in the world that you’ve made once, and then we’re going to actually identify that item greatest condition and merchandise it in a way that your consumers who shop your e-commerce experience are going to shop your e-commerce experience. And it feels exactly the same.

[00:03:47.700] – Garr Punnett
I love that. So then you’ve also gone. You all have sort of been strategically placing yourselves along with brands where they get to now offer take back in retail, which is huge. Can you talk a little bit about, like, how important that is for someone to bring something back to that brand that they love and say, hey, I no longer want this, and establish sort of that take back relationship?

[00:04:10.160] – Nina Ahuja
Yeah, absolutely. So we call it trade in. And I think if we take a step back in retail, we talk a lot about omnichannel. The last 15 years, the buzzword has been around omnichannel, right, meeting consumers where they are. And I think finally, retailers are coming to the table and saying, okay, consumers are actually shopping pre-loved items at a scale that they’ve never been able to shop for before. Right? And a lot of that comes from economic volatility, demand, etc. And so without the ability to leverage the entire Omni channel, a retail channel at scale can’t be achieved. So we need to actually tap into all of these different touch points retailers already have with their consumers. And so when we’re thinking about trade in, what we’re used to seeing in resale, going back to pre-currency right, bartering and shopping for these items is something that humans have always done. So when we think about trade-in in today’s actual interactions with retailers, we often think about it as a seller. When you want to go sell a pair of shoes that you’re no longer wearing, you go to a marketplace like Ebay or to Craigslist, you list your item, someone buys it, and then you make money.

[00:05:22.020] – Nina Ahuja
What we’re trying to redefine is to say your consumers as a brand are your consumers, no matter what kind of touch point they’re coming to you for, it’s just an additional interaction. And so in these additional interactions, rather than a circle, we think about it more as an infinity loop because you’re creating these new types of conversations with your customer, and so they’re coming in to trade in that item, but they don’t need to be a seller to you. They’re still a consumer. So they’re getting a gift card right away because that instant gratification is them being your consumer first. And so they’re able to trade in their item either digitally or in store using our technology, and then we’re able to assign that gift card in under three minutes. So if you go to Lululemon’s store right now, you can do this in all 420 of their locations across the country. And it’s really exciting to be able to see because it’s bringing people back into stores, but more importantly, it’s giving them the ability to trade in and trade up and interact with the brand in a way that they’ve never done before.

[00:06:22.090] – Garr Punnett
Now, as you’re talking about omnichannel, that’s all about establishing multiple connection and touch points with a consumer. Why is that so important when well, frankly, when a consumer’s closet is changing, what does that meant for e-commerce? Why is it so important for Trove is sort of establishing, again, as consumer trends are changing, it’s important to be right there with that consumer.

[00:06:46.910] – Nina Ahuja
Yeah, so I think there’s a couple of different dynamics that we’re talking about here. Right. One thing that you mentioned is that consumers closets are changing. And actually what we know is that on average, Americans are purchasing over 64 items a year, which is huge compared to years prior. So this idea of consumption is at a height that we’ve never quite seen before. But that means there’s a lot more stuff sitting in people’s closets. So the way that we’re thinking about it from a brand perspective is, you know what, especially during COVID, this came up a lot. Supply chains are very volatile right now, given the last couple of years and the unpredictability of the future. And so when we’re thinking about this, how do we start shifting our mindset to say all of these closets are part of the supply chain? That is millions of SKUs that have been untapped. The real challenge for retailers is to say not just how do we get it back, it’s how do we identify the item? So I’ll give you an example. We manage catalogs for over 2200 brands because of our multi-brand retailers. That means that there’s tens of millions of unique identities assigned to each item that’s in circulation.

[00:07:58.170] – Nina Ahuja
And each of those unique identities are based on sources and conditions that determines its price. So we use machine learning algorithms for that. But one of the hardest things in re-commerce is really knowing what something is, right? If you have that many pieces in your closet and you’re going back to your retailer, how am I supposed to tell what it is if it’s missing tags, if there’s not an exact catalog match? And then how am I supposed to understand what to do with this item? So we’re trying to build, and we have built the technology that makes it possible to identify those items and sell all this previously unsellable goods. In retail, and this, I think, is an unknown fact if you’re not in the industry. But skew catalogs only go back so far, right? Because if you think about a brand like Nike, how many thousands of items over the last few decades do they have, right? So managing an active catalog that encompasses every single style, color, and size is incredibly difficult. That’s a huge amount of data. And so they often don’t maintain 40 years worth of scala data. They only maintain two to five years on average for a retail company that size.

[00:09:03.270] – Nina Ahuja
And so when you’re looking at these options online and you’re shopping re-commerce and you see, oh, this company is only accepting things in their SKU catalog, they’re only really talking about 10% of their total inventory, only the stuff from the last two to five years. But we know there’s so much more there. So how do you take all of that stuff and make it sellable again is really the challenge.

[00:09:23.020] – Garr Punnett
And then culturally, again, the importance of almost the deep grails that are available in those items that are maybe 30 years old, there’s so much value locked in those items now for those that care about diversifying their closet, creating more reuse opportunities in their closet, but then also really embracing, again, that antique almost at this point, that item that was created 30 years ago.

[00:09:52.530] – Nina Ahuja
Oh 100%. And I think as we see different verticals of retail industry participating in this. It really started with the outdoor, sustainably minded brands like Patagonia and REI, who really blazed the trail for other retailers. But we’re now seeing finally, luxury getting on board. They have the highest customer adoption in the world and the lowest brand participation. There’s a huge opportunity for luxury brands here because why? It’s the Hermes theory, right? Birkins are way more valuable on the second hand market. And so, you know, when we think about these vintage collections coming back and all these really special items that are in really high demand and really low supply, you would much rather buy that from Gucci itself than go to a secondhand retailer or a marketplace, because you trust that brand. You trust that they are authenticating it, right? It’s the same reason you’d rather go buy a Mercedes Benz pre-authorized from a dealer rather than somebody’s driveway. You might pay a little bit of a premium, but you’re getting all the bells and whistles and you know that thing is going to drive you home.

[00:10:54.700] – Garr Punnett
Yeah, I love that example again, because we’re seeing actually some similarities in Rheaply’s industry where we are working more on the actual fixtures and furniture that we see on the B2B end. And again, the idea of pre-authorized, pre-certified, certified circular could even be really powerful for some of these brands that we’re working with on our end.

[00:11:17.380] – Nina Ahuja
Tell me a little bit, and I’m going to ask you a question. Tell me a little bit about certified circular. What does that mean in your space?

[00:11:23.860] – Garr Punnett
Yeah, I mean, for us, this is coming down to significant manufacturers who their whole business models have been built around linear production. So not too different than what we’ve got on the consumer model, but what we have is an entire industry and industries plural, built on really finding success in those secondary markets, but largely secondary markets that have left the original manufacturers out of the game. And so how do we actually start thinking about incorporating those manufacturers? Because that’s the only way that we’re going to get reuse. And a lot of that re-commerce on our end to actually take at scale is if we involve those manufacturers. So thank you.

[00:12:05.290] – Nina Ahuja
The move from linear, I think, is a really important thing.

[00:12:09.510] – Garr Punnett
Exactly. And so thank you for being one of the, I think, the first people to ask me a question on this podcast. I so appreciate that. To speak about the industry that we find ourselves in re-commerce, reuse, resale, however we want to define it, but again, focused on moving sustainability metrics, moving consumption metrics to the path of circular economy. How did you find yourself in this industry? You don’t have the same path as many.

[00:12:38.110] – Nina Ahuja
Yeah, I think that’s a great question. I mean, I would certainly say it’s not linear for me either, with that theme. I actually got into retail because while I was studying my undergrad and economics at Columbia, I was lucky enough to be in New York. And so I had a lot of retailers down the street from me, and I was writing my senior thesis on the economic power of spending and how it’s really divided by gender. And so when you look at GDP spend across women and men in the United States over the past couple of decades, you realize there is this massive split in the kinds of spend at what stage in life, etcetera. So when you dig a little bit deeper, retail plays a huge psychological component to that. And I found this fascinating because, especially in luxury goods, specifically, there are certain indicators that people really attach to what is this hold that a Chanel CC logo has on us, and why do we create so much psychological importance around that? And so in digging deeper, actually in writing my thesis, interviewed a bunch of executives at Chanel at the end of my thesis and actually defending it and graduating.

[00:13:53.740] – Nina Ahuja
One of them offered to hire me. And I said, you know what? I thought I was going to go to Wall Street, but I just look so much cooler in these books. Strategy and financial planning. So that’s how I started in my career, was at Chanel in the New York office. I quickly moved into a strategy role at Sex with Avenue. So I’ve always been in this world of luxury goods trying to understand the economics and the financial impact that, you know, it really has and what does the model look like from there? I spent about eight years as an associate partner at Kurt Solomon, which is a boutique retail consulting firm. So that really means, again, a lot of buzzwords. But what I really did on a regular basis was talk to global CEOs around transforming their operating models. And so transforming a $40 billion brand is not easy, and it takes a very long time. And so when consumption is changing so rapidly in the world, how retailers are changing their internal models to meet those needs very quickly is a complicated structure. And so I would spend a lot of time thinking around how do we problemsolve that and then actually implement it and bring it to life in short time frames.

[00:15:01.540] – Nina Ahuja
One of the pieces of work that I really got into during COVID was around ESG models. How do companies really think about their diversity, equity and inclusion strategy, their sustainability strategies or circular strategies? And all these things are related. And so we’re really thinking about how are you supposed to define ESG? What measures of success really exist in the world? It’s a very complicated notion, and a lot of times I think the problem is companies think about it as a cost center, but it doesn’t have to be. We always think about this as a pain to the bottom line. But ultimately, I really wanted to think about this as a way of adding to your brand, how do we have a margin, a creative, brand accretive solution to this? And I was getting really frustrated because I didn’t find the right solution for the companies I was working with. And I often think of I don’t know if you’ve ever heard of Bryan Stevenson. He’s the famed lawyer who’s the Equal Justice Initiative highly recommend. Watching his Stanford commencement speech from a couple of years ago changed my life.

[00:16:02.880] – Garr Punnett
That will be the next thing I watch after this.

[00:16:04.990] – Nina Ahuja
Please do. This is like an ad for Brian Stevenson, but he’s really not only amazing lawyer, but a civil rights activist. And one of the things, and I’ll do a terrible job of paraphrasing, but he talks a lot about how changing systems is very difficult because humans are imperfect. And there are two ways of going about changing massive systems that are in existence. One is doing the hard work of changing hearts and minds, convincing people to think differently, which takes decades. That is the John Lewis theory, right? It’s a huge, long arc to be able to do that. And the second is to create solutions that force people based on their own incentives to change their behavior without necessarily them knowing, because they’re meeting their own incentives. And this is the kind of loop on the outside that I was really interested in getting involved with. And when I started talking to Andy, who’s our founder at Trove, I realized, okay, I think this is it, because what we’re doing is trying to create a profitable way for companies to be incented on circularity. Ultimately, going back to that economic model, producing more shit means I can sell more shit means I get more revenue.

[00:17:17.050] – Nina Ahuja
And that’s what we’ve been existing in retail for as long as I can remember. And so changing that model to say, wait a second, I can actually just reacquire the high quality items that I made at one point and then I can gain economic revenue from that. It aligns to a lot of financial incentives for retailers right now and it actually gains their sustainability goals as well. So I think there is this nexus point that we can find in retail where you can do this at scale in a profitable way.

[00:17:46.350] – Garr Punnett
What’s that original hesitation? Is it cannibalization of net new sales? Is it complication just changing their systems or changing the status quo? What have you all heard the most often? Or is it just all the above?

[00:17:59.340] – Nina Ahuja
It’s really fucking hard.

[00:18:00.700] – Garr Punnett
Yeah, okay, yeah, that checks out. We know a little bit about that on our end.

[00:18:07.760] – Nina Ahuja
But yeah, you know this better than anybody. Taking a lot of stuff and figuring out what it is is impossible. And you know, it’s really hard to do yourself. I mean, any retail company will tell you this, but even getting returns back from their own brand is such a pain in the butt. And so being able to do that for years worth of inventory they know is going to take so much operational space in their warehouse, labor, actual technology, and to build that entire system yourself is incredibly difficult. It’s why we’re doing this for brands, because we know that those who try it themselves. There are great examples of this. Coach Reloved is one of my favorite examples. Actually did a really great job. You go to that site and you’re like, wow, they really took the time to think about the recycling aspect, the upcycling aspect, the reuse of some of these items. But having a team to actually do that means that they can only sell 500 items a month or whatever it may be. You’re not able to do it in millions of items. Last year we processed over a million items for rei alone.

[00:19:13.630] – Nina Ahuja
And so when you’re thinking about doing this at scale, that is a completely different ballgame. And you need help because you need to understand what that operating system looks like from both the tech and physical operations perspective. And it’s really hard to build that from scratch.

[00:19:29.440] – Garr Punnett
What are we not seeing in the industry a little bit? I mean, this is a growing topic. It’s getting really hot, or actually has been over the last two years. So anybody catching up? I mean, really look into Ecommerce, look into Trove, see all the success that has come. There are lots of different systems popping up. Some might be stronger than others. What do you all see in terms of hopefully no green washing out there. But where do we find the strength? What do we find in terms of what’s actually being done or what’s being just talked about?

[00:20:08.440] – Nina Ahuja
Yeah, I think that’s a great question. I will split that up into two different answers because I think that there is an industry perspective on this and there’s a consumer perspective. So I’m going to start with consumers because ultimately that’s what we all are. That’s why we’re all interested in this space. From a consumer perspective, we’re seeing a lot of rhetoric being thrown, marketing materials, words recombular. And so I think it’s really confusing. Like even as a consumer and I work in this industry, I’m like, wait, what the heck is this eco friendly green material? Is it recycled thread? Is it like, where is this coming from? I don’t understand what’s going on. When I’m shopping, there’s like a million tags on everything and so actually caring I love this that they came out and they actually are pushing their brands to take out a lot of that verbiage from their advertisements because they’re like, we’re going to be upfront about what we’re doing. Super transparent around sustainability. No more green anything, no more using the words ecofriendly. They’re just being very transparent around where their stuff comes from, where it’s going. And I love that direction.

[00:21:16.690] – Garr Punnett
If you removed all of that language, it can elevate the whole conversation.

[00:21:22.990] – Nina Ahuja
Just tell people what’s in the cake that they’re eating and I think it would be a better experience for them. And so the other component of that is the actual shopping experience. Everybody has some sort of circular program, but as a consumer, what does that actually mean? When I’m going to your website and if I go right now to, let’s say, for example, made Well X red up and I’m looking at their resale site and I click on denim, all I see are jeans, jeans, jeans and jeans. And it’s really hard for me to shop for 300 pair of items on an ecommerce site that just say jeans. I can’t tell what the difference is, what are the fits, et cetera. And so it’s on a product listing page, right? So when you see those four items and every when you’re scrolling and so for me, the question is how can we actually articulate that ecommerce experience that I’m so used to seeing from the brands I love on their own pages? Which is why we focus so heavily on Merchandising, the ecommerce site, to feel like an ecommerce site. So is it stacked? Can I filter based on my size?

[00:22:26.580] – Nina Ahuja
Am I looking at certain colors? I’m not just shopping for a pair of leggings from the lemon, I’m shopping for the aligned leggings in dove gray in a size eight. Like I know exactly what I want. Can I go into that treasure hunt and sort of find it and not.

[00:22:40.560] – Garr Punnett
Have to be almost the shopping anxiety associated with, oh wait, there’s 16 versions of this that I think I’m looking for. And now it’s like, oh, I’m just going to stop because I’m intimidated by this process of filtering.

[00:22:54.710] – Nina Ahuja
Exactly. It’s the same idea. Like if you’re going to go shopping at a thrift store, you need an hour to actually go because you have no idea what you’re going to find and you have to try stuff on. That’s not the experience that we’re trying to replicate online. We want you to have the same experience as when you are shopping online at your favorite retailers and you know exactly what you want and you want to pick it up.

[00:23:14.860] – Garr Punnett
Yeah. So again, the whole point modeling, what does the consumer want, what do they want? We don’t want to change their experience. We want to give them exactly what they’re looking for, which is they want to change their closet. They want it to be filled with more reused items, pre loved items. However we want to market it. And then we just want to meet them where they’re at and not try to convert them over to a different way of thinking of their shopping experience.

[00:23:39.690] – Nina Ahuja
Yeah. And they want brand authenticity. They want information about their items. All that rich catalog data that you have about the way it’s made, the materials, the care. They want the flashy photography that they’re used to seeing from your site at a really elevated level. And they want the actual US of an Ecommerce site. They want staff PDPs, they want condition grade information. They want filtering and sorting, all of that stuff that you’re just used to natively being there when you shop online.

[00:24:09.790] – Garr Punnett
Yes, absolutely.

[00:24:11.170] – Nina Ahuja
Go back to your question that you first asked me about the interesting stuff that’s happening right now in the market. That’s more of a consumption perspective. As a consumer, I really care about that. But as somebody who is working in this space, I have a lot of opinions about this.

[00:24:28.740] – Garr Punnett
You don’t seem short of opinions. So yes, hot take time. Hot take time.

[00:24:33.940] – Nina Ahuja
Look, last year, and I actually think this is from a study done in conjunction with BCG, but there was a lot of reporting based on how many providers are there out in Ecommerce. And last year I think that it was around 30 ish in the landscape and threat of I know reported on this too. This year it’s over 140 providers. There’s like a boom explosion, which is good because I do think in some senses the rising tide helps all boats. Finally we’re seeing enough VC money, enough investment in this space. This is becoming a real aspect of retail. That’s great. It’s adding a ton of validity and credibility to resale. On the downside of that boom, we have a lot of nonsense, a lot of gray area around brainwashing aspect, the marketing and I always want to play double’s advocate. I do think there’s something to be said for progress, not perfection. Having retailers try it all is better than not trying, and that is 100% true. We need to get people talking about this, about how production is damaging to the environment, about how we can keep items in use. At the same time, we have to look at brands holistically we know Gen Z and Millennial shoppers care about values from the brands that they shop with.

[00:25:54.100] – Nina Ahuja
And now that’s bleeding into other generations too. We’re all starting to care a little bit more. And so when we’re actually looking at the values brands represent, I want to see you put your money where your mouth is. How are you actually going in and looking at your carbon emissions from your production, from your supply chain? Are you actually putting enough new items in use? Or is this a marketing campaign because you dropped 15 vintage items? That, to me, is not circular, that’s you bringing back something interesting, and you have a great marketing story around it, which can definitely help your bottom line, but it’s certainly not a sustainability effort. And we talk a lot about recent launches that have happened this week alone. I mean, it’s so interesting to see a brand like Sheen, which is the height of fast fashion in so many ways, you know, get this insane evaluation and then start a circular program. But at the same time, the Cut released an expose this morning or yesterday morning, excuse me around the undercover cams that went in there and discussing all the human rights violations going on. And I just think, wow, should we be shopping for companies that are saying they’re doing great things for the environment, that are not even paying their workers appropriately and have massive issues when we think about the way they’re treating humans in the world?

[00:27:17.910] – Nina Ahuja
So I think there’s certainly a conversation to be had every single time you see one of these launches to actually the onus is really on us to be able to dig in and say, we’re so glad you’re participating as consumers. Let’s figure out exactly what participation means. And I think we’re going to see the market start having opinions and measurements around what good looks like in this space. We need some structure to talk about it and say, okay, from a consumption perspective, how are you merchandising to your consumers? What’s the UX you’re providing? How does your experience actually look and feel? Second part, is it omnichannel? Are you meeting consumers where they are in stores online? Is their trade in? Is there resale? What aspects are you actually pulling on? And then the third is how much waste savings and carbon emissions savings are you actually measuring? Are you measuring on a transaction level? What does that look like compared to your baseline when your shoppers are shopping new and what is that actually doing for the world? So I think it’s important to look at both when we’re actually measuring. The success of these programs.

[00:28:23.050] – Garr Punnett
I love it and I think there’s so many lessons learned in diving deeper into these consumer programs so that when people are noticing, oh my gosh, this brand, I like has this type of program. Well, you can go one level deeper and see how it’s working, see if it’s real. I think that’s huge for anyone that’s listening. Well, thank you for joining us. Any last word on the state of the industry? What you’re excited for for the industry? What’s coming up next for either you personally or a Trove? What can you leave us with?

[00:28:57.990] – Nina Ahuja
Yeah, that’s a huge question with a lot of people. I will say this, I mean, from an industry perspective, I’m so excited to be able to have this conversation. I remember we were at Circularity 22 earlier this year together and just seeing the amount of conversations and retailers showing up is so exciting to me that we’re finally having these conversations. And the thing that I really want to see in the future is more interaction between sustainability and diversity and inclusion on a personal level, especially as a woman of color, I think these two things are inextricably related. When you care about the world, you tend to care about humans as well. And we’ve seen so much progress in both spaces that I’m excited to see all of this come together in a larger ESG umbrella as time goes on. Because I think finally, consumers are pushing companies to really be transparent about their policies with the world and with their workers and with their consumers. And then from a personal level at Trove, I’m super excited to be launching our first luxury brand that’s coming to the market in Q one of next year and to see more luxury participation in this environment.

[00:30:13.780] – Nina Ahuja
Consumers have been participating in it forever. So it’s time for brands to really step up to you.

[00:30:18.450] – Garr Punnett
I like that you left the luxury brand anonymous and for us to be excited for in the future, so excellent. I think you’re exactly right. One of my favorite parts about the industry that we find ourselves with sustainability and circular economy is a lot of women, but there need to be more talented individuals that are coming from blackouts that are not mine. And I think that’s the exciting part about our industry and something that you’ve got to pioneer, which is get out of, don’t go to banking, don’t go to, don’t go to wealth management. Jump into something that’s a little more interesting and something that’s going to be really pioneering and you can be a defining voice like Nina. So thank you. Nina will be seeing you soon, hopefully again at Circularity once again or another conference coming up. Thank you so much for the time today.

[00:31:11.910] – Nina Ahuja
Absolutely. Thank you.

[00:31:13.410] – Garr Punnett
Talk soon.