how retailers turn used goods into cash | Wender Mind Kids

Drapers - The kidswear revolution: how retailers are monetising hand-me-downs

Until last week, Dotte was a largely unknown name in the industry. Founded in 2020 by Louise Weiss, a former neuroscientist, and Samantha Valentine, a former retail manager, the children’s clothing resale platform stocks 17 brands including Turtledove London and Tobias & The Bear. However, it was catapulted into the limelight when Marks & Spencer announced a partnership with Dotte – marking Dotte’s first foray into resale.

The collaboration comes after childrenswear rental platform The Little Loop – also launched in 2020 – secured £140,000 from BBC The Dragon’s Lair in an episode that aired to more than 4 million viewers in January. The investment will be used to scale and expand The Little Loop into the resale market in 2022. The company is also exploring possible partnerships with two “big retailers” to help them get started in rentals.

The children’s clothing resale market is having a moment. Awareness is growing rapidly, spurred by the demand for more sustainable options for consuming children’s clothing – which has been rapidly outgrowing – along with the desire to find affordable yet high quality items. And as behavior changes, retailers want to capitalize on it.

M&S children’s fashion SS22

Alice Duggan, Head of M&S Kidswear, says: “Preloved Selling is a growing market and we look forward to learning more from an agile start-up and supporting the circular economy by joining the Dotte reseller collective.”

However, the model faces challenges. Parents are unlikely to resell stained clothes, while in the rental market barriers lie in the cost of washing items to be loaned to others. The mechanics of renting and reselling can also complicate adoption in terms of sourcing, authentication, and pricing.

An estimated 183 million pieces of outgrown children’s clothing end up in landfill in the UK each year, according to a study by Dotte in collaboration with market research firm Opinium. Environmental organization Hubbub estimates that a third of parents have thrown baby clothes in the bin because they needed space or didn’t know what else to do with them.

M&S has invested in Dotte through its joint venture with start-up accelerator Founders Factory, which is working towards a circular economy. Founded in 2015 by Brent Hoberman and Henry Lane Fox, the global network has funded more than 200 technology start-ups.

Dotte is offering a £5 voucher towards their next £25 online shop for customers selling M&S adult children’s clothing.

Co-founder Weiss tells Drapers that the partnership “marks a big step in the industry.” She and Valentine – both mothers – founded Dotte out of “parental frustration” at the mountains of clothes their children had outgrown – clothes with a long lifespan but comparatively short useful lives.

“More and more parents are thinking about sustainability. Our entire community is passionate about this mission,” says Weiss.

“Affordability is another key factor. We appreciate that parents will eventually buy new ones, but when people buy new ones, they buy well. By reselling your clothes, you have more capital to invest in clothes that last longer. Partnering with M&S is really important because we can reach so many more families and extend the life of children’s clothing and prevent it from going to landfill.”

Jane Kellock, creative director at fashion trend forecasting service Unique Style Platform, says both parties will benefit from the collaboration: “Dotte will expand its customer base and M&S can take cautious steps into the resale market and expand its consumer reach.

“It has always been a lucrative market as children outgrow their clothes so quickly and used clothes are part of the lives of both parents and children. Local stores for used children’s clothing have always been popular, and online shopping has just made it more accessible for everyone.

“The market has huge potential, but to me the future of any second hand or rental clothing market has to be linked to curation. Just as consumers want to unlock an aesthetic with new clothing or aspire to a specific look, they want to do the same with rental/thrift. Online platforms that are good at curating and editing will be the most successful.

“Investors are also keen to get involved in anything associated with the word resale or rental when it comes to clothing. The interesting thing is that the resale market is growing so fast that it’s stealing share from traditional companies, not other reseller marketplaces. Consumer curation, edited selections, peer-to-peer recommendations and mumfluencers are critical in this market.”

close the circle

Charlotte Morley, founder of The Little Loop, has the same goal as Dotte to promote a circular approach to children’s fashion. The mother-of-two “saw a problem that needed fixing” and set up her rental platform. The Little Loop is suitable for children aged 12 months to 10 years. It works with a membership scheme that ranges from an average of £18 a month for five to six items, to £36 a month for around 12 or 13 items. A membership includes unlimited swaps, stain insurance and laundry. Items are cleaned and disinfected between rentals.

It offers ethical brands like Polarn O Pyret, Jackals, Little Green Radicals, JuJuni, Kite, Wilder Ones and Frugi. The Little Loop also talks to shoe brands about renting on the site.

“The best way to reduce environmental impact [of clothing] is to wear it longer, but kids grow so fast,” explains Morley.

“The only way to negate this is for more people to rent clothes so that each garment is used to its maximum potential. The technology that underpins our business allows us to share our rental income with brands that we stock. While most brands offer wholesale, “we can track each item. We can calculate the sales made. We don’t have to invest in lots of stock up front – we share the risk with the brands.”

The Little Loop aims to rent items for four or five rental cycles. Each rental cycle lasts about three months, so it is worn “intensively” for 12 months. When the clothes reach the end of their life cycle, they are resold or recycled. The company washes the clothes between rentals.

“We get most of the stains out,” says Morley. “It’s a challenge in terms of cost, but we’re removing stains that parents think they can’t remove.

“From an operational perspective, leasing is challenging – we need to be able to process and wash the clothes, which means operations need to be streamlined. Everything has to be done in-house to be profitable.”

Sales have increased by 500% since The Little Loop came out The Dragon’s Lairalthough Morley will not disclose numbers.

“We’re seeing behavioral changes where people want to move away from ownership and access things when they need them so you don’t waste anything,” she says. “A lot of brands see the world growing in this way. Businesses want to be more sustainable and circular.”

Some are predicting that demand for luxury resale items for children will rise as parents come under pressure from the cost-of-living crisis.

PR manager Shoshana Kazab co-founded the popular online shop Kidswear Collective in 2018 for designer fashion for children, which now has a permanent location in Selfridges on Oxford Street. Kazab saw an opportunity in resale, having worked with high profile influencers and celebrity parents to whom she would gift designer children’s clothing.

Kidswear Collective at Selfridges

“Many of these items have hardly been worn – often just for a photoshoot or a party. I knew there was a way to get these clothes back into circulation, but also to make it possible for people who couldn’t normally afford luxury children’s clothing. Customers who follow influencers on Instagram might not have the budget to buy these designer pieces , but they still strive for it.

“In recent years we have seen the cost of goods continue to rise and children outgrowing their clothes at an alarming rate [up to seven sizes in the first two years]. Parents are looking for ways to be a little smarter when buying and selling their kids’ clothes.”

While there are some operational challenges as attitudes shift towards more sustainable ways of consuming clothing, representatives of the children’s clothing resale and rental sector argue that it will grow rapidly as investment and new technology enable successful companies to to expand.

“Any brand that has quality clothing has a huge opportunity to share in the resale revenue,” concludes The Little Loop’s Morley.