We had the opportunity to interview Arie Katz, Co-Founder of RoundRack. The company that aims to further the circular fashion ecosystem by closing the resale loop.
 

Q: Can you tell us a bit about yourself and RoundRack?

A: I'm a product designer, fashion reseller, and circular economy advocate. About 6 months ago I got together with a friend and former colleague, Alex Kogan, who was looking for a way to devote himself to the cause of sustainability as well. Together we started developing a white-label solution for fashion brands to become more sustainable and take part in the circular economy. We enable them to leverage existing services, and offer their customers post-purchase care and resale automation. 

RoundRack is a B2B2C startup. The customers are retailers, while the users are their consumers. We want to enable retailers to offer their consumers product care and money back via resale. We would facilitate that product care and resale by connecting the consumer to a vetted, local service provider, and streamline the resale (if consumer wishes of course) by listing on the most relevant marketplaces (It doesn't necessarily entail partnerships, but more us as users simply listing and selling them).

This all happens on the retailer’s site, in the 'previous orders' area, so as far as the consumer is concerned, this is all facilitated by the retailer. We would just provide and customize the technology (so in that case, retailers and marketplaces are potential partners. Our competitors are other tech companies like Trove and Reflaunt that provide tech solutions to enable resale).

Q: Can you please explain the "circular fashion economy/ecosystem" 

A: The circular economy is the practice of eliminating waste and continual use of a resource. In fashion, that would be garment care such as cleaning and mending, rental, resale (second hand), and eventually recycle (aiming for a material that can be recycled). The circular fashion ecosystem would be the service providers and marketplaces that enable the circularity.

Q: Can you give us an example of how this would work in the real world?

A: Imagine this scenario. A jacket I bought from Ralph Lauren (RL) just got a little tear. Usually, I'd probably toss it in the bottom of my closet, too lazy to figure how and where to fix it. In this case, I log onto the Ralph Lauren site, to the 'previous order' section, and can see where in my vicinity are vetted tailors that can mend this type of garment and material. A bot would then facilitate the communication and handoff.

Say I wanted to sell the coat and get a new one. From that same section I can see the estimated resale value. I click resell, and that's basically it. The bot communicates with me if anything additional is needed on my part. When sale is made, I am notified, simply print the shipping label prepared by Ralph Lauren and send off to the next happy owner. I then either get the cash, or an equivalent voucher for my next Ralph Lauren purchase.

Q: How did you get the idea for RoundRack?

A: After being wounded in a terror attack, I went soul-searching in Japan, where I became aware of the circular fashion concept. I then became very involved in the resale market, but understood that in order to create real change, brands and manufacturers needed to get involved. It just so happened to be that resale market was growing 21X faster than retail, and 9 in 10 retail executives were looking for a way in. From there it was (and still is) a matter of finding an offering that would be beneficial both for brands and their customers. It also just so happened to be that Alex and I had the experience of being on the founding team of a successful B2B2C startup, so we knew how to approach this challenge.

Q: What makes your company different from others in your space?

A: Brands who want to enable resale are faced with either the option of developing their own platform (expensive), or partnering with an existing platform (limited). We offer a simple, customizable way to leverage a mass of existing services and platforms, maximizing the value for brands and consumers alike.

(Click on image to enlarge)

Q: How does your company generate revenue?

A: We're still working on it, but currently our business model entails charging a licensing fee, and a small fee for facilitating the product care and resale of a given product.

Q: Did you hit any roadblocks that almost caused you to throw in the towel?

A: The Coronavirus sure makes things challenging! But interestingly enough, the preowned market tends to spike during a recession, so it can be an opportunity to onboard new customers.

Q: How will RoundRack improve the lives of its users? 

A: Ultimately our goal is for people to buy less, and invest more in better quality clothing. By lengthening the life of a garment and enabling them to gain back part of its value via resale, we believe consumers will ditch the harmful fast-fashion trend, minimizing pollution. This should also lead to a quality improvement in manufacturing, and increase in factory worker wages, and help small businesses such as tailors, dressmakers, garment restoration, etc. 

(Click on image to enlarge)

Q: Who was the greatest help in creating your company?

A: Being accepted to Google Campus for Startups (GOOG, GOOGL) was a big boost in confidence, and their mentorship program helped us tweak the business model and product. Being chosen as Startup of the Month was great too!

Q: Where do you see the company in 5 years and how do you plan to get there?

A: We want to be the #1 facilitator of garment care and resale, and a given step for brands who want to enter that space. It's a tedious process of tailoring a solution for each customer and vetting service providers, but if it was easy, then anyone would do it.

Q: Are you currently raising money?

A: We are currently looking for design partners and strategic partners. An investor who knows the retail market is relevant.

Q: Is there any advice you'd give to other aspiring entrepreneurs?

A: I've been talking about this concept for 5 years; I have a screenshot of a comment I've gotten on Reddit when I posted it there for feedback. It reads: 'This is the dumbest idea I've ever heard'. So don't give up on an idea too fast, though don't fall in love with it completely either - learn how to tweak it until it's right.

Q:  Is there anything else you want to share with our audience?

A: Give second hand a first chance!