The Way To Operate: The New Income Point Of The Original Bird Brand In The Retailer.

Recently, Fast Company released the latest list of the 50 innovative companies in the world, based on the Trove list of technology start-ups in the Gulf of San Francisco.

In September 26, 2019, Trove completed a $20 million C round of financing, which has raised a total of $34 million 900 thousand so far. Investors include: Three Cairns Group, The Westly Group, Prologis, Prelude Ventures, Prologis, and so on.

　　 Starting from personal idle goods exchange platform

Andy Ruben has more than 20 years of experience in retail, consumer goods, strategy and sustainability. He was the first sustainable development officer of WAL-MART Walmart (WAL-MART) before he resigned. He was responsible for WAL-MART's e-commerce strategy, its own brand and multi-channel retail activities.

Adam Werbach is an environmental protector and a continuous entrepreneur. He sold the marketing communications company he founded to British advertising company Saatchi & Saatchi, and together with Andy Ruben founded Trove predecessor Yerdle.

At the beginning of its founding, Trove is a California for Benefit Corporation in California. It is a P2P platform. Specifically, the business model at that time was similar to the "eBay and Facebook combination". It was a online idle product exchange platform based on human relations, and its platform covered everything including ski shoes, fitness equipment, baby clothes, kitchen utensils, etc.

(*Benefit Corporation:B Corp refers specifically to the third party certification of profit sharing enterprises awarded by B Lab of the US non-profit organizations. These enterprises have reached the highest standards in terms of social and environmental benefits, transparency and legal responsibilities.

Under such a business mode, Trove has fixed fans and customers, but it has never been able to make profits. On the one hand, it is very difficult to change consumer shopping habits. On the other hand, there are still problems such as warehousing and logistics.

So the two founders began to explore new business models, but soon Adam Werbach left the company and started other businesses.

　　 Transforming B2B, becoming a supporter behind the brand

In 2016, Trove began to transform into the B2B platform, providing white label services to apparel retailers to help them develop and operate second-hand goods resale projects, and provide technical and logistics support. Its specific cooperation with the brand is: Trove for brand development, resale market channel, deepen interaction with customers, increase profit income, and ultimately aim to protect the earth through circular economy.

Andy Ruben pointed out that the switch between the two business models is actually natural development. The initial P2P exchange platform helped him understand that second-hand trading is growing, especially with regard to high-end brands. "People have vision for some products and brands, and they can't afford it for many consumers, especially young people. Buying second-hand is a good solution."

Trading second-hand goods is not simple. "There are always big and small problems. Are there any guarantees? What is the return policy? Do you want to go to the store to see the real thing? These are problems faced by online retailers, especially with regard to second-hand goods trading, "Andy Ruben said.

Ultimately, the strategy of Trove is to help brand development and establish resale websites without creating new websites and warehouses. The second-hand goods of brand repurchase and resale are all processed in Trove warehouse. Trove will conduct purchases, processing, valuations and photo processing of second-hand goods before a cooperative brand sells products on the resale website. In addition, Trove is also responsible for the relevant return and after-sales service. All processes are carried out in the name of brand, and end customers will not know the existence of Trove.

According to the amount of business handled, Trove can be drawn from sales in a certain proportion, and the content of each brand cooperation will be different.

Trove also invented the patented cash register software, through collecting and analyzing "how long a product will be in the shopping cart", so as to better grasp the management stock circulation, and also use the "artificial + machine learning tool" to detect the quality of goods, and based on this, determine the selling price of the resale products.

In addition, Trove is also aware of the younger generation of consumers, providing not only detailed information about goods they want, but also services such as two days of service and comments. "Consumers who buy second-hand goods are younger. They do not mind wearing patches or other used items, and even feel a sense of story. And because living in the Internet age, these young consumers want to know everything, "Andy Ruben said.

In today's highly competitive secondary market, Trove's competitors include: The RealReal, Rent The Runway, thredUP and so on, but unlike them, Trove only works with a few brands.

　 Brand / retailer's new revenue point

In mid 2017, Trove's transformation business was formally launched. In an interview in 2018, Andy Ruben revealed that by the end of 2017, the company's revenue was "millions of dollars, and its revenue in 2018 would be 5~6 times that". At that time, Yerdle had only three cooperative brands: Patagonia, REI and Eileen Fisher.

In the release of the list, "fast company" pointed out that Trove is a strong supporter behind the Worn Wear, a well-known outdoor equipment brand Patagonia (Patagonia). With the support of Trove, a logistics start-up company, Patagonia repurchases goods from customers, repairs it and sells it again at a discount price. This may seem to be a brand disadvantage, but Andy Ruben points out that the introduction of second-hand resale market will enable the clothing brand to "create new sources of revenue, acquire new customers and share the right market share from the secondary market".

Because Trove is not a retailer, brand partners need not worry that their cooperation will affect their sales.

In addition, restricted by the standard Privacy Ordinance, The Real Real can only share the overall data of high consumption customers with the brand, and it is illegal to share personal data. But Trove's cooperative brands have their own customer data systems. The Eileen Fisher brand points out that these data are as valuable as sales data. "Who wants to buy you? There are real opportunities hidden here. "

Trove's current business model also avoids the problem of counterfeit and inferior commodities that second-hand retailers have to solve. Andy Ruben points out that counterfeit products are not a problem because the brand is directly involved, and there are few counterfeit products in existing cooperative brands. "But if we start contacting luxury brands in the future, we also need to be able to identify."

In the six months since the launch of the project in 2017, the Worn Wear website has contributed $1 million in sales to Patagonia, and the project has been profitable since its establishment.

Worn Wear Project Manager Nellie Cohen pointed out that cooperation with Trove "brought many new customers to the brand. Price is the reason why many people do not choose our brand, they will buy affordable Patagonia, but not through us, but some old stores or discount stores, but now they can buy directly from us (cheap second-hand goods).

Worn Wear director Alex Kremer pointed out that in the future, sales of Worn Wear account for two figures of total brand sales.

In fact, cooperation between Trove and Patagonia can be traced back to 2013. At that time, Trove held a swap event at the door of Patagonia flagship store in San Francisco, and Patagonia was also an equity investor of Trove.

Outside of Patagonia, Trove also attracted REI and Eileen Fisher. Sales through cooperative resale websites Renew, Eileen Fisher have exceeded $4 million (by June 2018).

Eileen Fisher's Renew project director Cynthia Power pointed out that the Eileen Fisher team is mainly focused on the repair of high value commodities, such as coats and sweaters, but there are many basic products such as T-shirts in the Renew warehouse, which are often not sold in the secondary market, so the brand and Trove "We think it's a story telling opportunity. We need a clearer way to help customers understand the value of their products," he said.

In 2019, Trove successively worked with Arc 'teryx (Taylor) and Stitch.