Why Resale and Rental Might Be Retail’s Next Growth Channel, with The Volte #602

Bernadette Olivier has spent the last six years building one of the most interesting fashion marketplaces in Australia. As the co-founder of The Volte, a peer-to-peer fashion rental platform, she’s helped create a thriving ecosystem where thousands of women are renting out designer wardrobes and building businesses around them. Alongside that, she’s now building Seamlist, infrastructure that allows retailers to track, authenticate and even earn royalties when their products are resold or rented across the secondary market.

Today, we're discussing:

• How The Volte built a peer-to-peer fashion rental marketplace with over 5,000 lenders
• Why resale and rental don’t cannibalise retail; they expand it
• The surprising scale of the secondary market for high-street brands like Cotton On
• How Seamlist enables retailers to earn royalties when products are resold or rented
• Why digital product passports could transform authentication, resale and compliance
• How AI could finally unlock scale for the rental economy
• Why Bernadette believes your product is actually a marketing channel

Connect with Bernadette
Explore The Volte

Transcript

Setting The Circular Fashion Stage

SPEAKER_01 0:00

A lot of our Australian brands fetch more on secondary markets than they retail for. But we've had dresses that have been rented 72 times. And I think it has been an error to ignore the power of your product and not to see your product as a marketing channel. I'm Bernadette Olivier and I am the CEO of Steamlist and the Vault. And in this episode of At Descartes, we talk about how retailers can promote the circular economy to drive commercial app.

SPEAKER_00 0:32

What if your customers could buy your product and then earn money from that product after they buy it? What if you could earn money from that same product when your customers sell it again and again and again? That's a pretty wild concept, right? That's what we're going to dive into today. My name is Nathan Bush or Bushy, joining you from the land of the terrible people here in Brisbane, Australia. Today I am joined by Bernadette Olivier, CEO and co-founder of The Vault, Australia's leading peer-to-peer designer rental marketplace. The Vault has built a community of more than 5,000 super lenders. They're women running real micro businesses by monetizing their wardrobes. But what's really interesting now is Seamless, their other product. And it's the infrastructure layer that's connecting retail, rental, and resale. And they're already working with brands like Cottonon, David Jones, eBay, and a growing list of retail partners who are integrating Seamless at checkout. They're using blockchain to help track products post-purchase, especially in the fashion space, authenticate items with digital passports, and earn royalties every time that an item resells or rents. In this episode, we unpack, and there is so much to unpack here, why peer-to-peer rental models work when traditional rental models have struggled a little bit recently. We talk about how resale can become a customer acquisition channel even when you're not getting the sale direct, why circularity isn't cannibalization, it's actually distribution, and how AI and blockchain are actually becoming retail and circularity infrastructure. A big thank you as always to Shopify and Clavio for supporting Ad Descartes and helping bring these conversations to the e-commerce community. Here's my conversation with Bernadette Olivier from The Vault and Seamless. Bernadette, welcome to Ad Descart.

SPEAKER_01 2:33

Thank you. Thanks for having me.

SPEAKER_00 2:35

Oh, it is great to have you here. I am looking at my questions. I've got a thousand questions for you today because you've got such an interesting business and idea. But first, let's start with The Vault. So The Vault is a rental platform. Tell me how you had the idea for the Vault.

SPEAKER_01 2:52

So I was actually a lawyer and a hedge fund in UK and New York when Rent the Runway exploded. Also Airbnb and Uber. And so it was the really rise of this sort of sharing economy. And what I didn't understand because Rent the Runway actually emerged at the same time was why that was a B2C model as opposed to peer-to-peer. Because I always thought the B2C model was going to have limitations in terms of supply. And just we all want the same thing at the same time. And you know, that's even escalated even more now with the rise of like TikTok and micro trends and things. And plus, you know, even though I was, you know, a poor lawyer at Air Hundred.

SPEAKER_00 3:36

No one's ever said that. Come on.

SPEAKER_01 3:37

I know everyone cries about lawyers all the time. I probably just wanted to wear fancier stuff than I could afford. Plus, I might, if I buy it, I'd like to be able to earn from it. And so that was really the beginning of the idea. And then when I moved back to Australia, I also saw this exploding cottage industry of dress hire small businesses. And so we now have over 5,000 women building businesses on the vault. And why that's important is that's really allowed us to deliver a B to C level of service to borrowers, despite being peer-to-peer, because peer-to-peer is a difficult beast to steer.

SPEAKER_00 4:16

So is that the big differentiation from the rent the one runways and even Glam Corner, who we've had Dean on the show before, is that yours more is peer-to-peer. So enabling people to create their own marketplaces, essentially, their own wardrobes to be able to rent out and manage themselves.

SPEAKER_01 4:31

Exactly. So I think Dean is a fantastic Australian founder. I'm the Glam Corner team is really impressive. Ours is just slightly different because the unit economics are different. So when you're a company and you're buying the inventory, the unit economics are far more aggressive. You need it to like re deliver, you know, a 10x return. Whereas if I buy a Zimmerman dress and rent it out as an individual, anytime it rents out, I'm winning because I'm just trying to recruit some of the money I spent.

SPEAKER_00 4:59

So all of a sudden your wardrobe's an asset. I've heard that before, but I've never believed it.

Peer-To-Peer VS B2C

SPEAKER_01 5:04

Oh no, I could tell you probably five brands. If you bought a I mean, I'm sure a cocktail dress would look beautiful on you naked. Thank you. But if there were five brands, if you buy those, they will pay themselves off within six months if you lift it on lift it on the bowl.

SPEAKER_00 5:18

Give me a hint, who are those?

SPEAKER_01 5:19

I mean, Zimmer. So, Ala Mae, we've got amazing, it's Camilla and Mark, we've got amazing Australian designers, and they rent incredibly well, they're made really well. And what I love is that it allows people who are never in the market, most people do not have$1,000 numerous times a year to buy a Zimmerman dress,$600,$500, depending on the price point. But they're able to rent a dress, they're able to learn the difference between a product you buy on Sheen and Teen Moo and one of these beautiful products our Australian designers wear. And rather than it cannibalizing retail, it actually becomes this huge customer acquisition stream. A lot of our users, our data, because we've been going around, you know, like forever, six years, is that someone will rent, say, Rebecca Valance, they'll love it, and so then they'll buy workwear or they'll buy favors or something. Because, you know, we also think rental is quite niche. It's occasion wear, well-made garments. We don't think people are going to be renting Lululemon.

SPEAKER_00 6:27

Yeah.

SPEAKER_01 6:27

We're not for that.

SPEAKER_00 6:28

So please don't. Let's not get into renting activewear.

SPEAKER_01 6:31

I mean, yeah, a lot of people are like suggesting that's the thing. I think rental, it's a special occasion thing. And I think what's amazing is that I think with the rise of Sheen and Timu, it's never been more important to communicate with consumers that when you buy this Camilla dress, you're going to be able to earn from it. And also it's going to have value on the resale economy. Whereas if you buy a dress from Sheen or Timu, that's disposable and it has no value.

SPEAKER_00 6:59

Yeah. And tell me about some of your sellers. Like you said, some people have made some really great businesses out of the world.

SPEAKER_01 7:04

Oh my gosh. There was a time for about COVID where we really looked at our data because we were kind of going gret guns and then COVID. That was not great for dress rental.

SPEAKER_00 7:13

I can imagine. There's not too many events when during COVID, was there?

SPEAKER_01 7:17

No, I think it was my first interview with the film review, and they said, well, are people dressing up for Zooms? I was like, no.

unknown 7:24

No.

Empowering Super Lenders: Building a Cottage Industry

SPEAKER_01 7:24

Absolutely not. Like no one is doing that. But we've really had so many of our, we call them super lenders. A lot of them have been with us since the beginning. They've built really amazing businesses. They are savvy entrepreneurs. Like if a dress they love, but it doesn't rent, or maybe it's too delicate because our dresses are utilized so much more than if it's just in my cupboard as an individual. They are so savvy. They know how to sell. So they're really impressive women. And it's this huge cottage industry. There's also a lot of students. But I think like the the belief is that everybody who's a superlender is like an influencer when they come from all walks of life. Like we have grandmothers who like are making an enormous amount of money. But no, they're really impressive women. And it's something that I'm incredibly proud of to be a part of.

SPEAKER_00 8:11

And how do you empower them to sell? Like they sound like they're their own marketing machines. How do you empower them to build their own cottage industry storefront?

SPEAKER_01 8:23

Well, it was already sort of existing before the vault. We just saw it, and most of them were bricks and mortar, and they didn't have a lot of online rich. That sort of changed with the rise of like Instagram and you know the commoditization of websites. But at the same time, what hasn't changed? It's never been easier to have a website. It's never been harder to get traffic. So we're really a sales channel for them. So just like, you know, we have a lot of small businesses on, say, Airbnb, they're very similar. But they were our white hot center. We quickly realized they were the most important users that we have on the vault. And we build a lot around what is good for them, what's important to them, how do they scale their business? Because the growth of their business grows us. So I think we've got something like a 90% retention rate of super lenders. And part of that is making sure that we're always trying to deliver them value.

SPEAKER_00 9:16

And so from your marketing perspective, as you're building out the vault, is most of your marketing effort on getting more super lenders into the system? Like, how do you manage the supply and demand when you've got a two-sided marketplace? Like you've got Yeah.

SPEAKER_01 9:29

Super lenders were our initially the real way that we got a lot of supplies. Almost 100% of our paid marketing has been for borrowers, has been that demand. But we also have Superlender acquisition, but it's definitely more like a B2B kind of sales channel. And now is we're lucky enough that we're now getting word of mouth. So super lenders just continue to grow. But we also we have things that we look for, and if someone's beginning to kind of ramp up their earnings, we then put them in part of our Superlender program and things like that. But definitely our paid marketing is predominantly focused on borrowers. I don't want to kind of jump ahead, but the other way we're now getting more and more lenders is through our other business, which is Seamlist, which, yeah, I'm not sure we can talk about.

SPEAKER_00 10:17

Yeah, let's get into it. Like tell us about Seamless because it sounds like Seamlist is kind of the thing empowering everything. Like it seems to be the rails.

Introducing Seamless: Resale Infrastructure

SPEAKER_01 10:26

We really see it as the infrastructure for resale and rental, but predominantly resale because resale was just so much bigger. Because what we've done is we've really embedded resale in the existing consumer behavior. And why this is important is even though we have these amazing resale platforms like Depop and eBay and Vinted, only 20% of consumers have ever resold anything. And the main reason for that isn't that they don't trust these platforms, it isn't that it's too expensive, it's because it takes too long. And the other issue that a lot of the resale platforms have is counterfeit issue goods. We did was we have captured products and customers before that resale intent exists. So when you're shopping on one of our brand partners, say David Jones, you can save your purchase from checker, and we're beginning to roll out also order history, and you can then list it when you're ready to sell, and you don't have to do anything. So the photo or the attributes, that listing's ready to go, and you can list it on eBay to sell or the vault to lend. And why it's important for retailers is there's been a lot of discussion about supply chains and a lot of work going into that. But I think the biggest black hole for retail is that most retailers don't know what happens to their product post-purchase. And what this is really doing is really showing them, well, this is where your product is, this is how it's being interacted with on a secondary market. And in addition, every time that item is rented or resold on eBay or the Bulb, the retailer gets a royalty. So they begin to earn from the whole life cycle of that garment. And why that's important is A, like, you know, eBay is getting something in the sense that that garment is authenticated. So they don't have to worry is this a real Zimmerman dress or a real Alame dress? And then Alame and Zimmerman are being rewarded for making items that are durable, that are beautiful, and that are capable of having more than one owner, which is what we need.

SPEAKER_00 12:30

Okay. So do they get a cut on the resale and the rental or just the resale?

SPEAKER_01 12:34

Every time. Every single time that item transacts.

SPEAKER_00 12:38

And this is only if the seller is bought via Seamlist?

SPEAKER_01 12:42

Currently.

SPEAKER_00 12:43

Okay.

Blockchain and Digital Passports: The Future of Fashion

SPEAKER_01 12:44

We have, you know, plans for other things. Like we have a digital passport, but I can see that the royalty will live in that. We've built it on the blockchain, we'll live in that digital passport. But at the moment, the royalties only exist if you opt into Seam List at one of our brand packages.

SPEAKER_00 12:59

Okay. So the brand partners go in there and they say, actually, we'll add Seamlist into our product page checkout to say that, hey, if you buy this, register your item, it'll always be attached to you. So when you rent it or you resell it, you'll be the authorized owner of this and we can certify that it's the real deal. And then you can make money off it, essentially. But then does the customer also know that the designer will make money off it through that chain as well?

SPEAKER_01 13:26

I don't think it's important to the customer. So the real value proposition for the customer is save your item and in one click you can list it on eBay, shortly, other platforms. You'll be able to cross these to multiple resale platforms. And when it's sold, it will automatically delist it on the other platforms. So for the customer, it's really about not having to create the listing, not having to create an account, not having to create, get a photo, and being able to really easily sell their item. A lot of the things in our roadmap this year is also about triggers. So letting you know, oh, you've bought this Camilla dress. There's huge demand for that on eBay right now. So being able to really incentivize people to say, oh, actually, I don't really wear that. And what is actually amazing, a lot of our Australian brands fetch more on secondary markets than they retail for.

SPEAKER_00 14:19

Yeah, yeah, yeah. It's amazing. It's like, I know my wife does a little bit of getting rid of old items through Facebook and groups and things like that, but it doesn't have the authenticity, doesn't have the trust that you've got. I was interested there that you mentioned blockchain. It was obviously the word of the year, probably three or four years ago. I'm interested from a technology perspective. Is that still the fundamental of that digital ID or that tracking from the user to the product? And then how are you layering AI on top of this?

SPEAKER_01 14:51

So, yes, blockchain was, I got really excited when I heard first saw digital passports because I realized it was already what we built. And so we're really excited about it just because it's going to allow us to know where all of the stuff is. And 80% of retailers' footprint is actually in the manufacturing of the things. So being able to make sure the business model and retailers are being compensated, I think is really important. I think also being able to track authenticity, I think with the rise of AI, it's never been more important to have a verified structure of data for products. This is off the topic, I also think for people, because the rise of dupes and pretend products and AI slot is just everywhere. I think we've first seen it on social media, but it's going to be quite challenging everywhere. So I think that verified layer of truth is really important. And then I think with the rise of the climate responsibilities, there's climate reporting in Australia. Every item of textiles needs a digital passport next year in the EU and the UK, and even in the US, despite Trump's best efforts. There's a tsunami of legislation coming through. So I really see the digital passport as a commercial tool, but also a compliance tool. So if you sell your item in California, you'll be able to make sure that you're complying with your end-of-life responsibilities. If you're selling in the EU or the UK, you're matching that digital passport requirement. And in Australia, what's really key for retailers is your scope three emissions can be reduced with circularity data, but it's got to be auditable data. It can't be anecdotal. And so this is a really good way of you being able to present that, which I think in the end is going to hit businesses' bottom line. That said, even though I'm an ex-lawyer, I think that that's interesting for the compliance regulatory people. What I am really excited about over the last six months is we've really been able to prove the commerciality of what resale can be and what pushing circularity can be to drive primary sales and commercial outcomes for our retail partners.

SPEAKER_00 17:00

Does it take a lot for the retail partners to get their head around it? Because on the surface, rental and resale isn't good for selling new items. But then as you explain it, it's that trial of the brand. It's being able to have that cut throughout the life cycle of that product. But then also that brand experience through rental will lead to future sales. Is that difficult for a lot of retailers to get their head around?

Consumer Behaviour: The Shift Towards Resale

SPEAKER_01 17:22

I think it has been. I mean, I think we can see now that the biggest threats to retail in this country is Sheen and Timu and cheap manufacturers. What I think that has taken some time to penetrate is by promoting things like resale and through Seamlist, as if you're actually allowing your customers to monetize your item. It's also what gives your item value. If your item has no resale value, if it cannot earn anybody income, it is valueless. We also know from the data now that just because you promote resale, it's not cannibalizing. Because most of the people who purchase in the secondary market were never going to purchase from you in the primary market. So there's kind of two ways, commercial outcomes that Seamlist really pushes. And one that's a bit of like an anecdotal story, but I think it explains it, is um my uncle is actually in the hoodagurus. So a lot of what we've built is based on music royalties. So that's sort of where the idea originally came from. But I always kind of laugh because the hoodagurus are really big in Australia. And strangely, Brazil. And I was always confused because, you know, even now my uncle's, you know, 70 and he's like, I just played for a million people in Rio. And like a little closing was like, I love your music, but why? And it turned out that in the 90s, the Brazilian population could get a few counterfeit CDs. And one of them was the Houda Gurus. And if you think back to the 90s, getting a counterfeit CD was like it's theft, it's terrible. There was like CD burnings, like it was all, but now looking back, that was distribution. That was the way all these Brazilians now love the hoodie gurus. Bringing it back to retail is I do think it's the biggest untapped opportunity because most people fall in love with a product through using it or buying it on the secondary market, and they may never ever have bought, say, you know, a Vickham Woods or H dress. And then they buy it on the secondary market and they love it. And then you all of a sudden you start getting these ambassadors. And I think it has been an error to ignore the power of your product and not to see your product as a marketing channel.

SPEAKER_00 19:38

And is that almost an experiential thing? So the audience or the consumers who are renting for an occasion, they're doing it often because they might not be able to afford the off-the-shelf price or see the value in it, especially if you've got a special occasion coming up. But the idea being that, like your Hudo Gurus, is that these brands will be able to cash in in five, 10, 15 years as that consumer goes through their life and can afford the more designer brands and it becomes part of their staple. Is that is that kind of the mindset?

SPEAKER_01 20:09

Yes. I mean, it's even faster than that. We now target everybody who rents an item who's a brand partner. We target them with them with a voucher to turn them into a primary purchaser. And the same on the secondary market, that's something we're rolling out this year. So this is the first time retailers have actually been able to reach these consumers who may need that's their first interaction with your brand. Smart. So that's turning your product into an acquisition channel.

SPEAKER_00 20:35

Yeah. And how many rentals would you get out of a product?

SPEAKER_01 20:38

I mean, we're lucky in Australia. Our designers make amazing products. Like they're capable of lots of rentals. Like we've had dresses that have been rented 72 times. Wow. But then I think about it, like, it's kind of odd that we think that that's surprising because, you know, vintage clothing, like, how often was that worn? And you know, these are beautifully made occasion wear pieces. They're not jeans. Like people aren't, you know, going to the shops and then I think the other really strong commercial KPI that we've proven in the last six months that I'm so excited about is when our retail partners, and we're about to do a third pilot, when they push resale to their existing audience. Some of this isn't publicly, so I'm just not going to name the names. They say, you're not wearing our brand. Any items that you're not wearing, we encourage you to resell and we reward you with a voucher. And so what that does is it's pushing some a sustainable outcome because you're keeping more goods in circulation for longer. You're unlocking latent consumer spending rather than say after pay, which is leveraging future earnings. You're actually leveraging latent assets that people sell, and then you're incentivizing them to come back and spend that capital with you by purchasing something new. And we've done three pilots now, and the results are pretty phenomenal.

SPEAKER_00 22:00

That's awesome because I know that's one of the big challenges for brands at the moment is new customer acquisition, especially outside of the traditional channels like Meta. And I can imagine from a designer perspective, if you can target that that segment of customer natively, then that's a really great acquisition channel for them.

SPEAKER_01 22:20

And I think we also say that quite a lot of our brand partners join for the royalties but stay for the data. I think we haven't even fully explored the power of that data for our retailers and our brands because I think, as you mentioned, things like meta and things like that are becoming increasingly challenging, really expensive. I also think we only have, I think the data that they make their assumptions on is really small. So it's the tip of the iceberg. You know, only 20% of transactions in Australia actually happen online. And we're kind of using that 20% and saying and extrapolating that for all retail, which I think has been a real error because most people actually want to see things. We're also really unpredictable as people. Like I might really love, like, you know, it's high heels, but also really love work boots. Like, I just don't think we fit into a box like we've been led to the lead. But I also think that retailers have really powerful data. And as you kind of mentioned with AI, I think that's always going to, that's going to be increasingly an asset they can leverage financially because it's a verified user and it's verified intent. So it's not just this person lives in Sydney, this age, you're actually going to have the history of their purchases. And I think that's really important.

SPEAKER_00 23:41

Well, it's also a mindset thing, isn't it, when we talk about shifting from demographics to psychographics. It's about wanting access to those customers who value quality, who are going to events and occasions regularly, who want to be seen, who you know what I mean? Like you're not trying to convince people to buy quality designer wear. That's what their values are anyway.

SPEAKER_01 24:02

No, and I think because of my hedge fund background, I always look at macro trends. And the speed at which resale was growing is just kind of undeniable now. So pre-loved, I think something like 75% of Americans bought one piece of pre-loved clothing last year. It's growing seven times faster than traditional apparel. And so also it's a really rising thing that consumers are deciding when they purchase. Like, what is the resale value of this? Like, you know, I might wear it to this, that on it or whatever. Does it hold its value? And if you think about the way we purchase things like cars or electronics or furniture, it kind of makes sense that we start applying this to other consumer products.

SPEAKER_00 24:42

And from a fashion perspective, that's a that's an amazing stat from the US, around 75% having purchased. And we've obviously seen the rise of marketplaces like Depop recently. Are you seeing that that is happening? Is it because of economic factors? They're looking for something that's a little bit cheaper. Are they looking for individuality in terms of being able to find something that's expresses them better? Or is it an environmental concern? It's obviously going to be a mix of all of them, but are you seeing any one factor driving this growth?

SPEAKER_01 25:12

It's definitely not environmental. That's like a bonus. Everyone's like, oh yeah, and it's sustainable. I think shopping has become less exciting. You know, I think I'm a little older than you, but you know, there was a scarcity in Australia, particularly. Like, you know, when I got Doc Martin's, my uncle bought them for me from the US. I think those endorphins lasted me a year. It's now been proven that the endorphins we're getting from buying new. It's really, it's up and down. Mainly because I think if I see you in something, quite a lot of the time, I can just go get it. So there's no, there's the hunt isn't there in the same way. And so I think I think people will always buy new. Like this is the other thing is I think we've got to stop thinking everything is black and white. I think people will rent for a black tie event. I think they will buy new and they will also buy pre-loved. I think it will be a combination of all of them. I think the rise of pre-loved is mainly driven around the fact that you do feel like you've won something when you find like the hidden gem and people just can't wait to say, oh, I got it on Deepop or I found it in a thrift shop. So I think there's the thrilled of that hunt. I think there's the love of it's unique. Not everybody is gonna be in this. And so I think also because of the rise of algorithmic shopping, a lot, particularly high street brands, there's a sameness. And so I do think consumers are looking for uniqueness.

SPEAKER_00 26:34

I think you're absolutely right. There's that story that goes along with it, isn't it? It's either I discovered it, you know, we used to do as I discovered this little shop on this street, blah, blah, blah, blah, blah, or I discovered it in an op shop, whatever it is. It's pretty hard to get excited or to say that out loud if you've found it on Shein or Timu. It's like, I made this great discovery on Timu. It's like you're gonna keep it for yourself.

SPEAKER_01 26:55

And we're we're actually, despite wanting all the stuff, we still want to have meaning. And if you think about, you know, the there is a rise of people wanting experiences over products. People still love products, and products still mean things to people. And it sometimes it's not necessarily they were the most expensive, it's because I wore that to my 21st or I wore that to my best friend's wedding. Or that's actually a really funny story about that. So I think pre-loved and the rise of thrifting is really giving that meaning back to products. But I don't think that needs to exclude primary retailers because what's hilarious is the products being thrifted are their products. We just need to connect it back to retail.

The Impact of AI on Rental and Resale

SPEAKER_00 27:39

Underwear brand Nala celebrates difference. Different bodies, different lifestyles, different personalities. That's exactly why they offer more than 80 products across a huge range of sizes, shapes, fabrics, and fits. But celebrating difference creates a challenge because you can't talk to everyone the same way and expect it to land. Personalization isn't optional at Nala. It is core to their mission. From day one, Nala built their growth engine on Flavio. By using rich customer data from their online fit library, purchase history, and loyalty program, Nala can segment properly, launch products to the right people, and notify high-intent customers the moment something comes back in stock. The results, they speak for themselves. Six consecutive quarters of revenue growth, 109 times ROI from Clavio, and in Q1 last year, 24% of total revenue was attributed to Clavio. When your brand celebrates difference, your marketing should too. If you want to turn personalization into a serious growth lever, head to Clavio.com forward slash AU and see how brands like Nala are scaling smart. You mentioned before the algorithmic changes that are happening, and in your latest Substack, I saw it was a really good article and you talked about being stuck in CAC Purgatory from a Vault perspective because it's actually really hard when people are searching for new things if we just use traditional Google search to say to put forward a rental option if people are searching for a formal dress, for example. Tell me about how you see that changing as AI search and LLM search becoming more of a thing. How will that help rental and resale?

SPEAKER_01 29:28

So I don't think resale has been as affected as rental, but rental just globally has proven quite hard to scale. I think that's initially because of the BSE model and its costs around that. Peer-to-peer, we don't have those costs, but it's still been more capital to scale than anticipated. And that's because we have to do so much top of funnel work. Because I need to trigger person A to type in black tie rental. I need to do so much work top of funnel, which is incredibly expensive for a startup like us. I mean, like if we have more money, I welcome more money. Because we do know what we're how to do it. It's just expensive because if we stop doing that, the search volumes for rental dryer. And because of the way Google has done that, we haven't been able to, if you just type in Zimmerman, rental, and I understand the thing, rental isn't purchasing, right? It's a service, really, compared to a product. So I understand why this happened, but it has been a huge challenge for rental. I think LLMs could really change that because people are more and more talking, I think, particularly in the US, and we're a little behind in Australia, but I suspect it will move there. People will say to Claude, I'm going to a black tie function, what should I wear? And Claude doesn't work exactly like Google. It will say, Well, if you're only wearing it once, have you thought about rental? So I actually think some scale for the rental industry as a whole could be unlocked by the rise of AI.

SPEAKER_00 30:58

Yeah, that makes sense. Do you think that will make retailers nervous?

SPEAKER_01 31:01

If it does, it really shouldn't. Because rental is quite niche. I think that's the other thing is rental isn't you're not going to be renting, you know, your casual wear. It is like Mecca being nervous of makeup artists. Like it is not something to be worried about. Everyone should be worried about Sheet and Timu counterfeiting their products and selling them for literally$2. Rental, I think, should be seen as a way to reach the younger generation, a way of doing that customer acquisition piece. I think it's going to be really powerful. I just know myself of how many brands I've discovered through rental because people are so much more experimental with rental. Like people rent like feathers and sequins and, you know, something that they probably wouldn't wear normally because a bit of fun. Yeah, it's fun. So I don't think brands should be nervous about it. Well, particularly if they work with us on Seamless, because then every time someone does buy something or rent something, you're getting the data, but you're also getting the royalty. I also think that it would be really powerful for a lot of retailers. We have so many of our users, as I said, whose dresses paid for themselves. And so somebody who used to buy Sheen and Timu might now buy some of our amazing Australian retailers because the unit economics just make more sense.

Retail Partnership and Consumer Engagement

SPEAKER_00 32:19

So if I'm a retailer listening to this, I'm like, oh, you know, Seamless sounds great. And it's a revenue and also customer channel that we haven't considered before. What are typically the steps? What are the qualifications that you look for in terms of a great retail partner for Seamless?

SPEAKER_01 32:36

In the end, it's actually been amazing because we probably initially thought it was going to be more of those higher-end designers. But what it's I can't tell if we didn't know or if it's also shifted. But for instance, Cotton On, the amount of interest and the amount of transactions happening for Cotton On on the secondary market is truly mind-blowing. And you know, Vintage, who is a really big European resale platform that just launched in the US, they're phenomenal. 90% of their products are what we call fast fashion or high street. And that's because people with fashion still want variety. And so people are buying from Topshop or Zara and they're selling it, and the price point is quite low, but it's still transaction after transaction and getting those garments worn more and more. So that's been a real learning over the last couple of years is that yes, we have this amazing kind of luxury designer pre-loved economy, but there's a lot happening in that high street level. And what is also amazing is the rise of collectibles and what people are collecting. And so there's a lot of people collecting every Camilla Caftan, which also people really, and I think, you know, I can only speak to, say, for instance, Cottonon, they do an exceptional job with things like Oasis t-shirts and I'm not a sport person, but US sport brands, and they sell out and then they sell for more on the secondary market. So I also think that there is this amazing way of leveraging the secondary market and driving scarcity in primary sales to turn it from just a product to a collectible, which generates this amazing consumer interest in the brand. So I think we saw it with LaBoo Boo's is an exceptional example of that. But it's actually happening across all categories.

SPEAKER_00 34:33

That's phenomenal. I love that cotton on example, isn't it? Because it's about tapping into those almost micro trends that are happening and obviously amplified now through social and the rise of content creators. The ability then to go, actually, what we're creating will be worth more down the track. But you'll want to stay connected with us from a primary retail perspective to be able to get your hands on it first to open up those opportunities to the secondary market.

SPEAKER_01 34:58

Yeah, and it just drives this like, because then when next time you drop, it will sell out faster and faster. So I have to say, I have been, I don't know if Cotton on has been on the podcast, but they are the most phenomenal team. Like we have just loved working with them. We've learned so much from them. They are excellent, like a world-class team of recently.

SPEAKER_00 35:17

Amazing. I love it. I love it. They haven't been on the podcast.

SPEAKER_01 35:19

Oh, we'll get them on there. Michelle.

SPEAKER_00 35:22

Michelle, we're coming for you. And tell me about from a technical perspective, if we've got retailers going, actually, how would I even put this on my site, for example? Is it intensive? Is it easy? Is it how do we go about it?

SPEAKER_01 35:37

Yeah, it's zero lift from the retailer's perspective. We get most people up and running within a day. It's all on our end. The only reason that sometimes it takes a day or two is because we have to go back. For if you're doing order history, you have to kind of make sure that we know all of your previous catalogues, but it's very low lift. If you're on Shopify, it takes about three minutes.

unknown 35:58

Okay. Yeah.

SPEAKER_00 35:59

And commercially, is there any cost up front for your retail partners?

SPEAKER_01 36:03

We've got a tiered subscription fees just because we have so much data, and for us to kind of house that data to track all these items in the lifespan. So it is a three to five grand per month. But that also means that you get a large amount of digital passports included in that for freight.

SPEAKER_00 36:23

And in that, do the digital passports give you access to customer data and the ability to contact new customers?

SPEAKER_01 36:31

So yes, we built in voucher functionality. So every time someone say buys cotton on or lists cotton on, I think usually for the lister, the retailer will decide, okay, for the month of March, anybody who lists a cotton on item is going to be given a voucher, for instance. But an always on would be anybody who buys that or who rents that garment will get a voucher to become a primary purchaser. And that's all just part of the service.

SPEAKER_00 36:59

And I guess from a retailer perspective, really nice too, because that's all trackable too. So in terms of if that's what you're measuring your ROI on, there's no attribution problems.

SPEAKER_01 37:08

Well, I think what's really interesting is that particularly if you promote, okay, in March, it might be, you know, David Jones. If you sell a David Jones item through Seamlist, we'll incentivize you. It hasn't really, it's not like, you know, discounting or that's being your margin. And it you can actually accurately see, well, this drove$500,000 of sales. So it again becomes another strategy you can use to kind of like free shipping or discounting. And I think in retail, we're all beginning the last few years to really understand that consumers are bloody savvy these days and they're just waiting for what I can do to get the best deal. And whether that's you know your honey kind of discounting codes, but people are getting incredibly savvy. So I think having more and more things in your toolkit to drive sales is going to be important.

Achieving Profitability

SPEAKER_00 37:56

Yeah, absolutely. Now, one of the things that I was most impressed about you your latest Substack. So I'm a little bit obsessed.

SPEAKER_01 38:03

I feel like I'm bad at it with my Substack.

SPEAKER_00 38:05

I know. I well, I love it. I I really enjoyed it. I went deep. You were really clear around one of the things you're proud of is that you're now profitable, and I'm assuming that's for the vault.

SPEAKER_02 38:16

Yes.

SPEAKER_00 38:16

And it's not an easy model to be profitable on. We've seen players come and go, obviously, not with the exact same model, but around similar spaces. What has been your secret to getting this model to a profitable form?

SPEAKER_01 38:30

We call ourselves cockroach. Yeah, just do it.

SPEAKER_00 38:34

We just don't go away.

SPEAKER_01 38:35

Look, I think it's been a real challenge. Like the biggest challenge by far. We know how to make most things work. I think there's always things in the marketplace you want to improve. The biggest challenge has been marketing. And we've got this most amazing head of marketing. She's fractional. Alicia McCall, she runs Ultimate Edge Marketing. She changed marketing for us in so many ways. And a lot of that means that over 50% of our sales come from existing customers. And that has been a game changer. And that's how we were able to get to profitability. In addition, taking a million dollars of cost out of our business over the last year through AI efficiencies. So, you know, I am across AI, I'm have concerns about AI. But from a cost, if as a business owner, the efficiency gains have been massive.

SPEAKER_00 39:22

Where did you find the biggest efficiencies?

SPEAKER_01 39:24

Using claw code, just me personally, I would say I'm 10 times more effective.

SPEAKER_00 39:29

Yeah.

SPEAKER_01 39:30

So just the velocity plus, you know, I think if we think about the rise of the internet, anything that could be digitalized, music, you know, content was. I think with AI, we should think anything that can be automated should be. So if there is any degree of repetition, automate.

SPEAKER_00 39:48

So you're claud coding your way to efficiency.

SPEAKER_01 39:51

Uh I'm not a coder that well, I'm a hobby coder.

SPEAKER_00 39:55

Aren't we all now?

SPEAKER_01 39:56

CGO hates that. But I would say the tools in the last few months have become incredibly powerful for non-technical people. So I really encourage everybody, and I don't want to preach to people, it's just because I'm in this and I feel like not everybody is across it. The free tools and the paid tools are really different. So Claude Co-work has changed my life. Like it's just you can do like you give it like, can you do a competitor analysis? Can you look at this, look at dashboard? Can you do this? And it's all doing that simultaneously, which is just insane. And I also think that busy work that we all have become really accustomed to with updating trackers and you know, tracking the tracker, all of that is gone. But I think also things like customer service, you're able to do automation, but you're also able to do personalization at a scale that wasn't possible before.

SPEAKER_00 40:45

You think you'd enjoy your legal career more now or less?

SPEAKER_01 40:48

I'm not sure there's gonna be many lawyers. I'm pretty glad to be out of that. I've Claude's an excellent lawyer. I'd be a bit worried being a lawyer. I'm sure I'm I'm hopefully don't tell my lawyer friends.

SPEAKER_00 40:59

No, they won't hear it. Don't worry.

SPEAKER_01 41:01

You're gonna need lawyers in the accountability chain, but I don't think we're gonna have these pyramids systems.

The Role of Expertise in Fashion Retail

SPEAKER_00 41:06

Yeah, yeah, yeah. I love it. Expanding into new markets isn't just about selling more. It's about selling smarter. Every region has its own rules, currencies, and customer preferences. But with Shopify, global expansion is simple. Localize storefronts, tailor experiences, and build trust, all from one unified platform. Shopify removes complexity so that you can focus on growth and deliver tailored shopping experiences for every market. In store and online. Accept over 100 currencies with Shopify payments for fast, familiar checkouts, and use built-in analytics to identify your most profitable markets. One platform built for global adaptability so you can scale without growing pain. Visit Shopify for Enterprise to learn more and start selling worldwide. Question for you've I saw that you've got Kelly Hush on board, and Kelly was one of our first podcasts, actually. She would have been in the first.

SPEAKER_01 42:05

She's horrible, isn't she?

SPEAKER_00 42:07

Horrible. Just doesn't know what she's talking about with fashion, has no clue about anything to do with fashion. No, incredible to have someone of Kelly's expertise and stature in working with you. What have you learned from Kelly?

SPEAKER_01 42:18

Oh, mainly dirty jokes and stuff.

SPEAKER_00 42:22

Worth every penny.

SPEAKER_01 42:23

No, she is just phenomenal. She's really lovely, but she's commercial. She's so energetic because, you know, I learned quickly, wow, you really need someone who knows about fashion if you're gonna try and work with fashion people. And so I actually researched in COVID and just cold called Kelly. And it has been the most amazing relationship. We really kind of yin and yang, and um, our third co-founder, Genevieve, if you you saw me yell at before, well, we just get along and we all are quite different. But no, Kelly is just phenomenal. I think that's how, because you know, everything, the values that like I'm telling you, talking to you about, about the fact that seamless promotes commercial outcomes. I was saying that in 2021. And that's just because things take time to build, they take time to scale. But one of the reasons that we've hardly ever lost a retail partner is because Kelly's in-depth knowledge of retail means we've been able to deliver value, even if the royalties have been relatively long tail. We've been able to deliver them value in terms of how we work with them, the data we have. And I think that expertise just is so important. And I do actually have started calling Kelly like our moat, because you know, with AI, a lot of like you know, we're saying everything that can be automated will be automated. What you can't automate is reputation and experience. You can't spin out an AI version of Kelly. We can try. Yeah, exactly.

SPEAKER_00 43:52

You're gonna try, aren't you?

SPEAKER_01 43:54

But you know, you trust people when especially people you've worked with before.

SPEAKER_00 43:58

Yeah. Incredible. Sounds like you've got All the pieces there, and I love that you know it's six years, it must feel like forever four years like gaining real traction and making a huge impact there. What's the next 12 months look like for you and the team? What are your big goals?

SPEAKER_01 44:13

We're really excited to scale here. We're doing multiple platforms that we were just with eBay. We're now working with multiple retail platforms, and we're really scaling both our retail partners. We're really finally because everyone talks in tech about the flywheel. Sometimes the flywheel takes such a feature. Whereas now five wheels. So we had a retail partner, it brings more consumers. So that's been really exciting because it just did take a little bit of time. The consumer reduction is and I feel really excited that it is delivering value. Like we kind of see it as a three-time value. So we deliver the value to your eBay because they really need authenticated products, they need more people to go on the supply side and deliver value to our retail partners, and then we're also making it easier for consumers to monetize it from their asset. So I think we're in that scalar stage, which is exciting because the scalar stage we kind of lost to the year of the grind, and then this is the year of momentum. But I think what is exciting is that some of the things that we talked about is beginning to retain is the beginning to really understand. And I think also there's an understanding because it's I think it has been trying to tremendous a lot of things that are happening in this space. And that just isn't scalable, which is why you've seen a lot of companies where we're connecting retail to retail through the consumers and through an existing behavior. So there's not that behavior change. So I'm really excited that that is happening, and it just means that we can scale so much faster. And then we are also scaling internationally.

SPEAKER_00 46:01

Just to throw that on the end.

SPEAKER_01 46:05

I don't want to say it in the next year. I'm like, now we're scaling internationally. Brazil.

SPEAKER_00 46:09

Brazil, apparently, really good markets.

SPEAKER_01 46:11

I hear they love the hootagos.

SPEAKER_00 46:14

I love it. I love the vision that you've stuck with it for six years and that it is profitable now. The flywheel is going, but what I love most is that you're actually making shopping exciting again. So whether that be the that discovery that you talked about and being able to find something that's unique, that has a story, or whether it's about people taking ownership of their wardrobe and actually going, actually, I can get more value out of my investments here. I think it actually becomes a bit for people who love fashion and love design aware, is that it becomes exciting again, that it doesn't just become a commodity. So I think that's that's a brilliant story, and and I'll be fascinated where you are another six years from now. So thank you for sharing everything, the vault and seamless today.

SPEAKER_01 46:57

Oh, I really appreciate it. Loved it. Thanks, Nathan.

SPEAKER_00 47:02

I'll be honest with you, there is so much going on in the world of circularity, resale, rental, and we've had a few conversations around in the past. They're always fascinating. And I feel we're going through a bit of a flux at the moment. Post the sustainability peak, I think you would call it, where it's actually tougher to get those messages across as people are looking for bargains and probably reverting to old ways of shopping. There is that risk that all of this falls away, but I was so happy to hear Bernadette's journey over six years, but also the growth momentum that they're on, both with the vault and with Seamless, from both a tech play and a business model perspective. There are three things that I want to pull out for you from this episode that I think you can bring into your own business to have a think about. Number one, have a think about whether your product's job ends at the checkout. Because Bernadette made it pretty clear, most retailers don't know what happens to their product post-purchase. Even if they set up all the Facebook groups and help facilitate some resale, most of the time they actually lose track of that product after that first purchase. But through resale integrations like Seamless, you can actually see where your product is being resold. You can reward resale with vouchers, you can earn royalties on every secondary transaction, and you can even turn your product into a recurring commercial asset. So that is pretty powerful, especially if you're a designer, a brand, or a retailer who is investing in quality products, not cheap and nasty products. If that is you, then this could be a really great secondary revenue model and a way to engage your community and your customers long term. Secondly, I think this helps reposition how we talk about value at the point of purchase. Some dresses on the vault have been rented more than 50 times. And as we heard from Bernadette, some dresses from some brands actually pay for themselves in six months. When customers know that an item has resale or rental value, and there are avenues like the vault to help them realize that opportunity, they're more likely to trade up in quality to justify that higher price point, to view that purchase as an asset and not necessarily as a cost. This sounds like all kind of information that's gonna come back and buy me in my personal life. But it's a story that you need to be telling at that point of purchase to re-emphasize the value in the price point rather than pushing towards discounts. And the third thing I picked up is even though it was a bit of a downer around talking about sustainability isn't a huge selling point anymore, from a business perspective, we need to be really clear whether circularity is compliance or growth. Resale is growing significantly faster than traditional apparel. We're seeing that through all the numbers. It's disjointed, but it's growing. Most customers buying secondary were never going to buy primary at full price. It wasn't an option. Bernadette's pilots showed that resale promotions unlock latent spending, vouchers reactivate LAPS customers, and the whole thing is measurable. Circularity doesn't always have to sit in sustainability. It can sit in acquisition and retention too. So think about whether you are positioning circularity as a business opportunity right in your business. It's not a tick-the-box exercise, it's actually a lever for growth. Now, if this episode has got you thinking about rental, resale, lifecycle revenue, or turning your product into a marketing channel, that's the kind of conversations we love happening in the Add to Cart community. Come over and ask your questions about that. I am very, very confident that we have retailers in there who are currently running resale and rental programs. Ask your questions in there, get first hand advice. You can join us over on addocart.com.au. It's free to join. We'd love to see you in there. Thanks again for spending your time with me. I hope you picked up something that you can take into your business. I'll see you next time on Ad To Card.