The fashion industry is catching on to the importance of the circular economy, but one key piece of the puzzle is getting consumers to change their behavior.
MonoChain, a London-based startup, is taking aim at textile waste with a blockchain-powered platform that provides authentication for products after purchase. If consumers connect the clothing they buy to MonoChain’s Wallet, they can quantify the value of their items, encouraging them to sell or donate instead of trashing unwanted items.
“You don’t see anyone throwing away money,” said Geri Cupi, CEO and co-founder of MonoChain. “But they throw away items because they don’t understand their value.”
Today, only one out of six post-consumer apparel items gets resold, but MonoChain aims to double that to one-third. If an item’s lifespan is extended by just nine months through resale, it reduces the carbon, water and waste footprint for that garment by 20 percent to 30 percent.
As a B2B2C platform, MonoChain keeps the consumer experience in mind, but its main goal revolves around changing how brands derive economic value from what they produce by leveraging the secondary market.
According to a ThredUp report, the secondhand fashion market is currently valued at $28 billion, and is expected to grow to $64 billion by 2024. Additionally, research from the Ellen MacArthur Foundation estimates that more than $500 billion worth of value is lost in the fashion industry each year because clothing is not worn and is not often recycled.
By capturing some of the resale value of an item, Cupi estimates that a brand can double or even triple the profit on that garment. This mindset shift could deliver higher margins and allow companies to pull back on the volumes they produce without sacrificing profit. It will also prompt labels to make garments that are more durable and resale friendly.
“We want brands to produce less items but at the same time, to be done in a way that their bottom line doesn’t get impacted negatively,” said Cupi. “Our ethos is that capitalism and sustainability can coexist.”
Since launching, MonoChain has worked with six brands. In 2019, the company began a pilot program with Levi’s at one of the denim brand’s brick-and-mortar stores. An unexpected impact of offering the blockchain certificate was a 16 percent uptick in basket size. Shoppers felt that merchandise was more affordable since they knew they could later sell the items they bought. The pilot also showed consumer interest in the technology, as four out of 10 customers who were introduced to the concept during the Levi’s pilot acquired a certificate and then later sold an item.
According to Cupi, one of the hurdles of using blockchain for authentication can be connecting physical assets to a digital record. As a solution to that, MonoChain has consumers scan items to create a verified link. The startup has differing levels of certificates ranging from a standard proof of purchase to solutions that require more verification, ideal for goods that are a bigger target for counterfeits.
While there have been traceability initiatives aimed at proving the provenance or sustainability credentials of a product to the end consumer, MonoChain is looking beyond the point of purchase. “What we’re going to do is end-to-end traceability of the item from the moment it’s being produced to the moment that the item itself, or the materials used to produce the item, don’t have a need in the market anymore,” said Cupi. MonoChain is eyeing the potential to close the loop by powering recycling programs in which brands could take back goods once they can no longer be used in their current state and turn them into new products.
Recently, MonoChain launched two new services for brands to further its mission of keeping fashion in use for longer.
MC Index is a dashboard that leverages the company’s data on the resale market, enabling brands to see what is happening in secondhand sales of their own goods.
Earlier this year, as retailers were hit with an influx of inventory due to store closures, the company debuted an overstock monetization solution. Dubbed MC Excess, the platform enables brands to send extra product to resale marketplaces, upcyclers, their own direct-operated secondhand channel or donation.
“We have one enemy, which is the landfill,” said Cupi. “So if things go to landfill, we lose as a business.”
What’s the most important issue the fashion industry has yet to address?
“I think for sure it’s overproduction. Currently there’s more items than is required to be produced. I think fashion needs to start thinking and to reduce the amount of items being produced. Overproduction is a big issue, and also trying to keep items for as long as possible in the ecosystem. In the old model, brands were not incentivized to do that, but we believe, what we are trying to do and with other companies in the market trying to make it easier for brands to be a bit more circular, I think we will see that change.”
For more on Sustaining Voices, which celebrates the efforts the apparel industry is making toward securing a more environmentally responsible future through creative innovations, scalable solutions and forward-thinking initiatives that are spinning intent into action, visit sustainingvoices.com.