Is resale ‘cooked’? Or just heating up?

Croissant, fast fashion, and a future business model for sustainable style

An attention-grabbing headline from one of our favourite Substacks this month asked, 'Is resale cooked?'

We're here to assure you that resale's demise has been greatly exaggerated, and the field remains wide open for innovators with competitive alternatives to fast fashion. Yes, early signs of resale putting a meaningful dint in the fashion industry's 8-10% contribution to global carbon emissions (UN Environment Programme, 2023) may still be unclear, but it's not yet time to abandon hope.

Why are we optimistic? It’s about price transparency and competition - two things high on the political agenda in the US election narrative this week.

So firstly, why ‘cooked’?

Cooked, like when your favourite restaurant gets a big review and is suddenly mobbed.

Fashion junkies love the uniqueness and hustle of the secondhand marketplace, both as buyers and sellers. So, it was worrying to see Blackbird Spyplane - an arbiter of fashion culture - proclaim resale’s premature death.

Their beef stems from a withering analysis of fashion commerce startup Croissant, which promises to provide shoppers with a ‘guaranteed resale price’ when they’re browsing partner brands. As a concept, Croissant is a (too?) logical manifestation of a trend we’ve called ‘Fashion Appreciation’. That is, the desirability of well-made, limited pieces making them collectable such that, in some cases, they hold or even increase their value. A stark contrast to the usual depreciation of mass fashion.

In a press release, Croissant rather stiffly describes its rational benefit as “when we consider the ongoing ‘asset value’ of a given purchase (and not just the headline price), we are able to buy smarter and better - in every sense of the term.” And for our purposes we can read ‘longer product lifecycles’ and therefore overall reductions in production here.

Using their browser plugins allows you to reference the resale value of items as you browse brand and retailer websites, provided they are one of the 100+ partner brands (coverage is pretty good). If you want to sell an item, it makes the payment and you ship to Croissant, leaving the faff of finding a buyer all out of your hands.

Uniqueness and hustle might be the resale motivation for extreme fashion junkies but Croissant, quite reasonably, seems to operate on the assumption that a broader base wants to buy better stuff without the hustle. In other words, they’re scaling up to give everybody a taste.

We like to know the provenance behind the ingredients in our meal.

Back in June we discussed the growing complexity for consumers of navigating pricing, where algorithms can hide differing prices for the same goods based on what a retailer knows about each customer - their vulnerability to paying more for a Big Mac, for example, dependent on time of day or how close to payday it is. And we can’t make a purchase these days without discovering some yawning gap opening up between the ticket price and the cost once a litany of junk fees have been applied at the checkout.

So, while Croissant's pricing proposition seems rather complex, it's not as if we don't already live amidst a high degree of price complexity.

(As a side note, ‘price gouging’ is shaping up to be a significant election issue in the US as Harris seeks to defend the Biden administration’s controversial promotion of anti-trust laws, challenging monopoly power with an appeal to mainstream voters that better competition will translate less inflation. Trump - and most mainstream economists - call this ‘communism’, naturally.)

Rather than burying opaque costs that have no tangible relation to value, Croissant instead enables us to release residual value. As their press release puts it, this shifts the terms of premium fashion from “credit-fuelled mass consumption to… premium asset ownership.”

So, what’s the problem?

We don’t really want our favourite chef to come off like an asset manager.

Let’s bring Blackbird Spyplane back in here. They say, “[T]he idea of relating to the things I ostensibly cop for pleasure as assets feels grim…”

Fair enough, the language and brand is woefully Fintech at Croissant. It hasn’t yet settled into a credible positioning for the fashion category. Like a lot of startups at its stage of life, it’s in an awkward position between communicating with potential investors and developing a credible consumer identity.

Then, they build out an argument that despite big fashion’s dismal lack of transparency on production volumes, we can likely infer that fashion production is still on the rise in 2024 despite the growth of resale. In fact, they say, the rapacious truth of the sector is that any model that discourages high-turnover consumption is bad for the category. They reference an article in the Harvard Business Review that recommends resale be seen simply as a means of bringing younger consumers into the ‘ladder’ of premium brand product portfolios.

“[R]esale is getting twisted into just another corporate greenwashing tool,”  they conclude.

But aren’t we throwing our hands in the air and abandoning hope before we even get started here??

Croissant may not be hip, it may never achieve that holy grail of fashion credibility. But within this model isn’t there a genuine competitive alternative to fast fashion? Doesn’t the ‘asset price’ of a garment immediately reveal all sorts of truths about quality and longevity - both construction and aesthetic - which lays bare the relationship to disposable goods?

This isn’t cooked. In fact, we might be looking at a whole new recipe.

When we conducted interviews for our ‘Windows on Net Zero’ research last year, we talked to Sasha (name changed) who told us:

“I buy quite expensive items but they either maintain their value or go up in price. Because they’re good quality they’ll last longer but equally if I don't want them I can pass them on to someone else and they’re going to last them a long time. So, I don’t lose out on any money. I don’t buy things from ASOS or whatever… because it doesn’t maintain its value and it’s not really my style.”

A streetwear fanatic, he bought and sold in Facebook groups that coalesced around brand Facebook pages, used Instagram stories to merchandise and sell with friends in pursuit of rarity, variety, price advantage and the kick of trading around his passion.

Sasha will never use Croissant. But that doesn’t mean others who are less immersed in style marketplaces can’t enjoy some of the same consumer benefits with lower barriers to entry because of Croissant or others like it.

Fashion production may well be increasing despite the rising tide of resale but that is because we don’t yet have a credible alternative model to fast fashion that provides for the needs of a mainstream market that can’t afford the fetishised pricing of luxury and rarefied streetwear. (Depop hasn’t killed fast fashion, in fact, fast fashion re-circling on its marketplace could pose an existential threat to Depop. At least to its present brand image.)

But a model that opens up the resale value of a quality item totally reframes value perception from short-term cost to long-term worth. Arguably, it has the potential of an endowment effect encouraging a higher value to be placed on the things we own. It changes what Richard Thaler calls the ‘mental accounting’ of the transaction in a way that is potentially Kryptonite to fast fashion.

As Kamala Harris and the US anti-trust department will tell you, the problem with uncompetitive markets is they don’t provide consumers with alternative choices. Croissant has big barriers to cross and the true impact of models like this will depend on whether platforms like it can gain cultural credibility and scale to meaningfully compete with fast fashion. But thank god we have competition.

This is a juicy brand challenge, for sure, but not a hard stop. Calling time on resale’s potential to change the terms of a broken industry is way too hasty. Let’s give it time to cook.

(And one final brand thought. ‘Croissant’… really?!)

Is resale cooked? - Blackbird Spyplane
Croissant
Croissant Launches Google Chrome Extension, Providing Shoppers with Guaranteed Buybacks™ of up to 75% - Businesswire
A New Start-Up Wants to Take the Guessing Out of Resale. Can It Work? - Business of Fashion
The Resale Revolution - Harvard Business Review
The Price Is Right? Algorithmic Pricing - 33_Zero
Democrats on defensive after Kamala Harris’s economic plans poorly received - FT.com
Harris makes a big mistake by embracing price controls - Noahpinion
‘A Window on Net Zero Culture’ - 33_Zero original research

About 33_Zero

33_Zero offers low commitment strategic workshops designed to help contextualise your brand against the backdrop of ‘net zero culture’. Uncover the opportunities that will emerge in your category as these forces shape new ideas about value, change shopping behaviours and as whole new sub-categories emerge in the growing sustainable economy. We work with both the new brands redefining categories - like cultivated meat startup Ivy Farm - and established brands like Nike, who are raising awareness of their initiatives in this space.

Workshops are led by our Strategy Partner, James Poletti, who has years of experience steering brand strategy projects in technology, finance, fashion, automotive and other categories for clients like Hyundai, Samsung and Adobe.

Email jamesp@33seconds.co to find out more.