It’s always in the media – disheartening news about what happens to the massive send-backs of inventory from wasteful shipping giants. Brand new goods that are destroyed because it is too costly to repack, store, and put them back into an inventory management system. For example, about half of Zalando’s sales are sent back.
The Situation
Anyone who takes a close look at fashion production will probably end up having a guilty conscience. For the production of a single T-shirt, about 1,400 liters of water are needed. With that, you can fill 10 bathtubs. For a single person’s clothing production, the amount of water consumed is equivalent to that of a three-person household. The clothing industry emits more greenhouse gases worldwide than airplanes and ships. More than 100 million tons of textiles are produced annually, and the trend keeps rising: a growth of 30 percent is expected by 2030. And to make matters worse, each of us throws away up to 37 kg/ 81 pounds of clothing per year¹.
The Problem
Vegard Kristiansen, co-founder of “The Green Deal”, observed during his work in the full-service freight forwarding company Prime Cargo that large quantities of returns were left lying around for a long time. “The fashion labels seemed to have little interest in the goods,” he explains. “But the storage and transportation costs were enormous.” And his business partner, Filip Elverhøy, who has years of experience in eCommerce, adds another perspective to these observations: “Many providers simply lack a comprehensive digital solution for returns. The processing is expensive, and so most of them concentrate on new sales. They’re simply much more profitable.”
The Idea
What if online retailers were offered logistics and a commerce solution to manage their huge number of returns? The founders of The Green Deal were asking around – and getting amazing feedback. “After asking a Norwegian fashion retailer about their needs and how many returns we could handle for them, they counter-questioned whether there was a quantity limit,” says Filip Elverhøy. It quickly became clear that the need for logistical and digital support was huge. Together with Edmond Yang, Vegard Kristiansen and Kjell Fjeldheim, he developed The Green Deal.
The Solution
So, how does The Green Deal handle the return process? The consumer hardly notices anything. He clicks on “Returns” on the page where he made a purchase, selects the product he wants to return, and stamps the package with the return label. The goods go directly to The Green Deal and are checked there. If everything is in order, this is reported back to the partner so that he can refund the purchase amount to his customers. The product is then stored and uploaded to TheGreenDeal.com to be resold. The products will then go into a second round of sales. Every step of the process is automated, only the quality check of the return is manual.
For part II of our blog series on The Green Deal, we asked co-founder Filip Elverhøy about his motives, the concept, and their relationship with commercetools.
¹ Bloomberg: Germans love shopping online. They love returning things even more. (Source)
i.a. Canada: Recycling council of Ontario
or Australia: Every 10 minutes, 6 tonnes of clothing goes to Aussie landfills (Source)