How Fashion Can Turn Waste Into BILLIONS

Hi everyone. Very excited to be here today. Thanks for joining us. We are gonna talk about unlocking scalable circularity and how are we gonna do it? Data automation, and of course our intelligent PLMs. And why do we do it? And I think this is so important. It's because it's gonna drive consumer engagement and sales. And I find that a lot of times when we talk about scalable circularity, sustainability, all those buzzwords, we talk about the circle, the people and the planet, but we forget to talk about the profit. And if we don't talk about the profit, why is any for-profit business gonna adopt your solution? So hopefully today, if you walk away, the 3 things I wanna think about and have you remember is that when it comes to the circular economy, it does not automatically have to cost you more money to participate, that it truly can be autonomous and scalable, and that yes, it touches every single business in the world with a supply chain. Okay, so let's talk about the problem, right? And then we'll get into the fun stuff, the solution. Every business in the world with a supply chain has excess inventory. We all have it. It's just a fact of doing business. Unused raw materials, excess finished goods that unfortunately traditionally sits in a warehouse collecting dust or being burned or sent to landfill. And when I first started looking at this problem with our team, We quantified it at approximately $250 billion a year worth of excess inventory. Well, with everything going on in the world— pandemics, trade wars, recessions, closed canals— it has grown to over $2 trillion a year worth of excess inventory. And for businesses with a supply chain, we've actually gone out and done surveys. To thousands of Tier 1 to Tier 14 suppliers around the world. And what we learned is that approximately 15% of every single step of every production run ends up as waste. Some can be as low as we— when we polled as 8 to 10%, some were as high as 30%, but on average, far and away, 15%. And so when you look at that problem, of course, it feels huge. It feels overwhelming. $2 trillion. What does that even mean? But what I like to say is that means that fashion, textiles, your supply chain literally has the power to solve the world's water crisis and drive over $2 trillion in discovered revenue just by looking at this issue. And how do I know about this issue? So here's a picture of me with my great-grandfather Pappy in 1896. He came over on a ship from Austria. He landed Ellis Island, and he settled into the Lower East Side of New York, the original garment district. He was an immigrant chasing the American dream. He came with nothing, and he had to do something for his family. So what did he do? He would find old materials and supplies nearby, old fabrics and furs and things that immigrants had brought over on the ships with them, but they weren't using anymore. And he would repurpose them by hand into beautiful fashion garments, and he sold to local customers, and it was an incredibly profitable, successful business. He lived to a beautiful age of 105, so I got to grow up hearing the stories of the old-school ways of doing business. Of course, he didn't talk about it as circularity or sustainability, but at the end of the day, that's very much what it was. It was a business that made sense for people, for planet, and also for profit. Of course, today's supply chains are a little more complicated than my great-grandfather's day. Hundreds of steps across the globe, metric tons of water, chemicals, crops, and oil are being used in the process. But our vision with our company, Elokia, is how can we use technology Get back to the way my great-grandfather did business because it made business sense. Why do we have all this excess inventory? This is a real file from a major brand who we work with, who shall remain nameless, of their excess inventory. And it does go on for over 31 seconds, and I'm not showing it to shame anyone or embarrass anyone, But just to let people know that when you're running your supply chains this way, this beautiful information is all dark data, can't be actioned on. And that is a big piece of why we have all of this excess. It sits on spreadsheets in departments around the world. We don't know about it. We don't know what to do with it. So what would it look like if we could get off those Excel spreadsheets get the data into the cloud and start to make it actionable and meaningful. And so that's what we really wanted to do. We wanted to take this for our companies and give them one place where for the first time you can actually see what do you have, what is it made of, where does it come from, who's it going to go to, and figure out what to do with it. And everything gets controlled from one dashboard, one system in the cloud. And then once you figure out what you got, how do you take action on it? And a lot of companies out there, I find, are starting to do great initiatives with resale, recycling, donation, which is really important to keep these materials in circulation longer. But a lot of times they end up doing little pilot projects, little collections in one region of the world. And don't get me wrong, that is also very important. Every SKU, every unit matters. But for the biggest companies in the world, doing it that way can be a little bit challenging. You need a way to do it automated. And at scale. And you need to do it because it makes business sense. So let's break this down a little bit. Reusing stuff. This, I think, is the biggest underlooked opportunity in your supply chain right now. If you knew that you had that inventory, what would it look like to be able to reuse it internally, either in your own group in other departments or divisions or brands around the world or your own supply chain. Why do you want to reuse it? Because when you do that, you get to keep 100% of the value. 100%. That's it. Cut down on the cost of net new materials that you need to purchase. So it makes total business sense. So when we look at what to do with your stuff, that is the first order of priority. What can you reuse internally? But let's be real, when it's $2 trillion worth of stuff, we cannot reuse everything, especially because we know designers like new things too, right? Okay, so what are my other options? If you can't reuse those materials or finished goods internally, Can you resell it? And with some of the data that we've been collecting, by reselling materials, you can actually recoup up to 75% of the value of what you paid for that goods. So this is not about the old school ways of doing business with jobbers or middlemen and getting paid pennies. This is about in the secondary markets finding true value where you can recoup. Up to 75%. Who doesn't want to do that today more than ever? But we know— I am an attorney, and although I cannot give legal advice, we do know that lawyers, business teams, finance may not let you resell things. It's proprietary, it's past the shelf life, right? So of course, we do offer and think about what does it look like to recycle or donate? And there is still some money to be recouped by doing that. Sometimes up to 10% or more. So definitely an option, just something that we look at as the last order of priority when we think about what to do this at scale. So let's talk about a few real case studies, 'cause I think it's always helpful to know who's doing this, how are they doing it, and how does it drive an impact. So here is Victoria's Secret. We work with them to help them resell their excess in 5 key markets in Asia. They actually started with 3, and we've since grown to 5, and now going beyond. And by reselling, they were able to increase their margins by over 60%. We find what you have and make the most in economic value out of it, and doing it in a way that is quick and easy and cost-effective. They didn't need to hire. Anyone knew to do it, and they can get up and running very quickly. But not only resell what you got today, because one of the things I also always think about— every resale program out there is incredibly important. But if you think about it, reselling excess, it's kind of like slapping a Band-Aid on the problem. Here, you have excess inventory, go sell it, make some money. How do you get to the root of the problem and figure out Why did I have all this excess in the first place? How do I take that information and intelligently minimize that excess tomorrow while also powering design to have this data that was dark on spreadsheets before and do really cool, interesting things with it? And so a big piece of what we've built is also giving industry-wide anonymized data so you can see to see what's going on with supply and demand, what's the true price and value of these goods in the secondary markets, and what's on trend. How can design use this creatively internally or externally? So, really important because waste, excess inventory, it's expensive, it's inefficient, it makes zero business sense. Sense to have excess inventory. So that's how we start to get to the root of the problem and solve it. But as I mentioned, not everything can be resold. So here is a public use case that we have with Ralph Lauren for recycling. With them, they wanted to take action in Asia across a handful of locations where they had to start over 12.7 metric tons of excess materials. Wasn't just textiles— paper, plastic, packaging, metal. These are all commodities of value that are sitting in supply chains right now. And so by working with us, we were able to, in our platform, very quickly and easily identify what they had in those locations and then figure out what could be recycled. And we ended up at a 90% 92% diversion rate. Obviously, the dream will be 100% when we can recycle everything, but realistically, we got to divert 92% from landfill and incineration while saving and making them money. And this statistic, um, because it was in our software, audited by their auditors, their CEO was able to share it in their financial and legal reports because it's backed by a record and proof. And that's so important too because so many companies out there are doing such great work. They deserve to be celebrated for it because it makes business sense. But they get afraid. What if I misstate something? What if I make a mistake, right? They don't want to put it out there. But if you have auditable books and records that prove what you did, photographs, videos, weight of what went there— where, all in one place, you can feel confident articulating it publicly. And that's really where we want the industry to go, so everybody can collaborate and power it across stakeholders, across industries, and around the world. So we talked about reuse, reselling, and recycling, but let's talk about the flip side, because when I first started looking with our team at this issue of excess inventory, debt stock and waste. So many people understood, "Yeah, I get why people would want to resell it, recycle it or donate it, but who in the world is going to want to buy this stuff?" And we just believed that people would want to source out of it, yes, because there is a sustainable benefit, but also because it makes business sense. Because with everything going on in the world, with supply chains disrupted, you need what you need when you need it. You need it at a discount. And most importantly, today, readily available in the location where you need it, cutting down on costs and carbon emissions of shipping. And obviously all these areas of the world that are disrupted. And so by building out our sourcing functionality with some of the biggest brands who we'll talk about, they've been able to save up to 80% on their material costs just by sourcing out of what they have internally in their own supply chains available out of deadstock, and also what they could procure from other brands. And I think that's really interesting too, because a lot of people may be thinking, well, why would one brand be willing to buy from another? It happens now. All the time. And I think that stigma and that feeling that you're not gonna buy— everybody is buying from the same factories and mills in the world. Why wouldn't you want something high quality, vetted and verified, readily available? Just makes business sense. So, you know, this stuff can end up on celebrities like Anita wearing full collections made out of deadstock. It doesn't even need to be treated as some separate thing. It just can live in the world just like everything else you're making. Here's an example of what we did with Cotopaxi, who is sourcing from us. We have integrated into their project management and production workflows, so now they can procure the way they're used to doing business, deadstock powered by our platform. And because of their work— and obviously they're an incredible brand who has made it part as part of their mission and dedication to deadstock sourcing. They are now committed to over 60% of their entire collections in the world will be made out of deadstock. And even today, they put out a 10-year business plan, and their number one business priority is using deadstock to make things. And of course, they do it because they are such a powerful, sustainable, and circular brand. But they're also doing it because it makes pure business sense. So, you know, we talked a little bit about obviously sourcing what this could look like and why it makes business sense, but I did want to touch on what does it mean when it comes to marketing and communicating this to your consumers? Because I think that's a huge opportunity. So here's just one example. If you scan it, you can see an example of what we did with SHEIN. So now when you purchase products from SHEIN, on the hang tag will be a QR code, and it goes to landing pages based on the collection of what it is. And that landing page will show you data like this. How much water, chemicals, carbon emissions, waste, and dollars are saved By the actions you took buying this piece of clothing that was made out of rescued materials. And that's really important because, you know, people, especially now more than ever, the next generation in the Great Wealth Transfer and who's going to have the purchasing power, they do care. But we also know that data shows people aren't willing to spend more for circular and sustainable. Well, what if they didn't have to? What if buying that new amp that made out of rescued and repurposed materials actually could cost the same or even less, and they still get to be a part of an impact like that and feel good about it? We spend a lot of time on the— our algorithms when it comes to measuring and reporting. So just to note, this is fully audited methodology by Deloitte, so it can go into public companies' financial and legal reporting, and it is backed by data scientists at MIT who we worked with for years to build that. So that was really important to us. Um, we know that there are misstatements going on out there and there are challenges around how do we measure and report. We don't expect every company to be able to figure out how to do it. They should be able to log into a platform, see it at their fingertips, generate that QR code, and trust with transparency that it's backed by something real. Very important. Well, with hot topic of the day, I had to touch just a little bit on AI. We won't spend too much time on it end of the day, but I did want to talk about it less for AI's sake and more what it means for your business. So here's just a few examples of some of the agents that we've developed. But the good news is you don't even need to worry about this. These are working in the background to help deliver the solutions that you need so you can see the results in your dashboard. What I'm really excited about AI and where it's going and what I find particularly powerful for supply supply chains is not just the application of AI, but how we can move from a world that is human-initiated actions in your supply chain to AI-initiated actions. What do I mean by that? A lot of people are talking about AI-centric things, but when AI can actually start a process for you in your supply chain while you're asleep, and it works 24/7, but it's following business rules that you have set for your business and your supply chain, that I think is when we really see autonomous supply chains running. The mistake I think people make is when we assume it's going to do everything for us and that it always gets it right, right? But the good news is when you set business rules, and it starts to learn your behaviors, not just the behaviors of everyone out there in the world, but your behaviors, it can start to do things for you while you sleep. Never second-guessing and just take the action. And then of course, when and as human intervention is needed, you're there. So that is my little piece on AI, which we can dive into a little bit deeper. We've talked about this, but I just wanted to highlight one more time because I think it's So important with any solution, circularity or beyond, that you're doing, that you can speak to the ROI. And so we spend a lot of time building out a model so that when a company wants to start working with our solution, we can articulate for them the time, the money, and the resources that are saved by the actions that you take, because you deserve to get credit for it. And this is something in a report because of all these factors of time, money, resources that you're saving that you can give to your stakeholders, to your C-suite, to your bosses to show them the value that you have unlocked. And also today, more than ever, as we're all being asked to do more with less, I believe combining AI, leveraging platforms that are out there and being able to show the ROI It's how you do that while still building for a powerful future. Just briefly to touch on, you know, a lot of people when they think of circularity, sustainability, and these awesome initiatives that are going on, you only think about one piece here, the sustainability bucket. And what I just wanted to highlight, and I think is so important, is that when decisions are made just by the sustainability team, it's awesome. They're your brand champions, innovation groups, they're really important. But when you can get the CEOs setting the corporate agenda, the CMOs who have to market and sell more than ever, the CFOs who have to get these financial liabilities off their books and save and make money and do more with less, The CIOs and the COOs who are managing your supply chains day to day, when you can get them at the table and deliver a solution that provides value to them, that's how you make it sticky. And that's how I believe you can grow and scale these initiatives and have that strong competitive edge. Today more than ever, you gotta stand out, you gotta beat out your competitors, and I truly believe that this is the way You're going to do that. Some companies, unfortunately, you know, through this may not be here, but your companies, I hope and believe, can be the fashion-forward ones who really will not just dominate but thrive through all of this. So here's a little video of my why. Life is precious. We need to make every moment matter and go build things that are going to make a difference and change the world. And I'm not stopping till I do. This was a very nice documentary that our integration partner SAP did on us. And the reason I mentioned too is because we talk a lot about tech, we talk a lot about, you know, these supply chains. But how do these supply chains happen and how do we build this tech? It's people. And so my why, and I know you all probably have a why too, I'm doing what I'm doing for my children. As you heard, I want them to have clean water to drink, clothes that aren't toxic to wear, and a planet to live on. I know I'm not stopping till I do. Together, we've already saved over a billion gallons of water, and we're just getting started. So never doubt that the choices of the actions that you take can and will Go change the world. My name is Stephanie Benedetto, and I'm the Queen of Raw. Thank you.