Sustainable fashion is still positioned as a subset of fashion overall. Often priced higher and marketed in a different way, sustainability is steadily working its way into mass market products – now that it occupies a more prominent position in the collective consumer consciousness – but creating and buying environmentally and ethically responsible products is still a different, and more difficult, task than the alternative.
One company that’s working to level the playing field is Cerqular, an online marketplace and technology company that’s aiming to centralize the discovery, verification, and sale of sustainable products in a way that equals the convenience and scale of other online retail giants – but without compromising on sustainability.
In the wake of the COP26 conference, The Interline sat down with David Friedrichs, Cerqular’s Co-Founder and CEO, to talk about what the future has in store for brands and consumers whose values align, and how the waterline is going to keep rising for sustainable fashion industry-wide.
The Interline: How do you define sustainability and circularity? These are two of the hottest and the most hotly-contested terms in fashion, but it can seem as though everyone has their own definition of what they mean. Some apply the label to renewable and reclaimed materials; others use it to refer to ethical production. In your opinion, what constitutes a sustainable product and sustainable processes to bring that product to market?
David Friedrichs: I think it comes down to: giving us more with a lot less. And the important thing to consider there is that this kind of rebalancing takes work – it’s not something that a brand can just stumble into, but something they have to actively seek out.
So what separates sustainably made fashion from conventional and fast fashion is usually innovation – innovative fibers, processes, assembly, packaging, and end of life solutions such as upcycling, recycling, repairing, and reusing. The fact we now have an abundance of exciting, innovative materials and manufacturing processes readily available just highlights the huge divide between brands that listen to their customers and invest in their garments (which is what it takes to deliver that “more” I mentioned) and those that are content to carry on offering the same value proposition at a time when consumers’ desires and expectations are changing so dramatically.
Crucially, it should be clear by now that the industry overall is moving in a more sustainable direction, which means that brands that settle for delivering more of the same will steadily fall behind and become recognised for delivering less.
On Cerqular, for example, we have brands using vegan leathers made from apple, cactus, pineapple, and mushroom right through to interesting fibers like kapok, upcycled rubber from tires and leather from old airplane seats. These are the kinds of innovations that inventive brands are embracing, and that are quickly becoming available to other brands as a result of that initial uptake. I fully expect that some of these non-traditional materials will someday – sooner rather than later – become common choices for a wide range of products that are sold to everyday consumers beyond the demographic of shoppers for whom sustainability is currently the top priority.
The Interline: Tell us about how you arrived at the idea for Cerqular, and what you’re working on right now.
David Friedrichs: In our past lives, I and the other co-founders of Cerqular have all experienced what it’s like to be a sustainable consumer brand. We’ve come across the difficulties in sourcing innovative fabrics, and we’ve struggled with discoverability and the challenges of promoting the value of sustainability when other brands are selling a very different proposition.
At the same time, we’ve also been value-driven shoppers, and we’ve come away frustrated by the lack of information that’s available to empower consumers to make informed choices.
How can a sustainable brand that pays their workers fair wages compete against inexpensive products, let alone generics, on conventional platforms that target price conscious consumers and that prioritize products with the lowest price in any category? Through existing channels, it just was not going to happen. By the same logic, the time it takes to find, qualify and actually buy from sustainable brands is reason enough for most shoppers to give up and revert to whatever is quickest, easiest, and most accessible.
On both ends of the spectrum, it was simply harder than it needed to be to create and sell sustainable products. This is why Cerqular was born: to make everything that is genuinely, verifiably sustainable also easily accessible – all in one place – with the ‘stickiness’ and convenience that consumers associate with leading eCommerce platforms and marketplaces that trade primarily on price and convenience. At Cerqular, we qualify the sustainability claims of all vendors, vet every brand on the marketplace, and have a truly net-zero supply chain (from click-to-purchase to door delivery). We’re practicing what we refer to as Sustainability As A Service, and we believe it’s vital that the industry follows a similar model, since there are a fixed number of raw material harvests left to make change happen on the scale the fashion industry – and the world as a whole – needs.
We also know that some demographics, right now, are more prepared to embrace that change than others. So our current mission is to use our marketplace platform to drive an industry-wide supply chain shift to sustainable and circular models, by targeting the next generation of shoppers: millennials & Gen Z.
The Interline: Sustainable and ethical fashion is a fast-growing segment, but it’s still only a subset of the overall fashion market. Like you mentioned, this means that sustainable brands are still fighting uphill – needing to compete not just against one another, but against a much larger market that’s banking on shoppers either remaining indifferent to the sustainability profile of their products, or choosing to prioritise price instead. How do you see this problem being overcome? Is it a matter of consumer sentiment evolving even further and faster, or do sustainable brands need to find a different way to reach the shoppers who already care and to market to those who are on the fence?
David Friedrichs: Sustainability in isolation isn’t the checkout trigger; it’s also likely not what shoppers are searching for as their primary metric when they surf the web, outside of the small-but-growing demographic of shoppers who put sustainability first. This is something that, in our experience, sustainable brands often struggle with – the understanding that growth is not guaranteed simply because their products and processes are sustainable, and that the value proposition of sustainability is as part of a broader picture.
I believe strongly that consumer attitudes are changing to prioritise sustainability more highly, but for the time being the environmental and ethical credentials of a product will almost always be weighed up alongside other value-added factors, such as quality, feel, fit, design, origin and price. Sustainability functions as a potent converter that gets people to checkout, pay extra and feel happier about spending their hard earned money online, but it’s only rarely the sole decision-making criterion. What it is, though, is the single most useful feature for creating a guilt-free shopping experience.
The Interline: Given that sustainability is likely to remain a differentiator and an important tool for assisting in consumer buying decisions for some time, the question naturally arises of what actually constitutes a sustainable product, and how the shopper can trust that label. Cerqular is positioned as undertaking verification on the brands that it lists, so can you tell us what that verification process looks like, and what it means to you to fill that role of actually assessing the credentials of many different brands?
David Friedrichs: Whenever we shop – especially online – we look for convenience, value and enjoyment, and when it comes to shopping for conventional products we’re faced with an abundance of options, readily available at our fingertips. Few things will negatively impact our shopping experience like losing trust – be that through fake reviews, cheap knockoffs, unbelievable claims or inconvenience. Shopping for sustainable products has added complexities, such as higher prices, claims of sustainability and inconvenience associated with inaccessibility. Despite a person’s willingness to shop sustainably, any one of those factors, let alone all of them, will cause a person to give up.
At Cerqular, we aim to solve all three problems by ensuring only legitimate brands can join. Claims of sustainability are verified, and our goal is to give shoppers the ability to buy everything, across all consumer categories, in one place, with one cart, one payment, one rewards program and one place to manage returns.
To back up that confidence, we verify everything listed on the Cerqular platform at two different levels on top of traditional payment security and marketplace reviews: sellers and products. When a new seller applies to join, we verify their company details and registrations to create a level playing field. At the product level, we accept that we’re by no means 100% perfect, we cross-check the seller’s sustainability claims and certifications manually. That’s a labour-intensive process at the moment, but as our ecosystem grows we’re working on tracking and tracing a product’s complete lifecycle using an automated inventory management process that’s powered by blockchain and AI, to deliver full transparency.
When we first launched, the verification process was far more restrictive than it is today. We initially went all-in on requiring every brand to be completely circular, free of animal-derived ingredients, zero waste, carbon neutral or negative, to have achieved B Corp certification and so on. What we quickly realised, though, was that we were setting a very high bar – to the extent that we were acting as inhibitors rather than enablers. I think that’s a problem that any sustainability-focused marketplace or brand would also encounter, and it was the catalyst for us instead positioning ourselves as supporting brands who want to incrementally add sustainability to their products and their businesses.
Nobody right now is 100% sustainable, and becoming more sustainable isn’t something that happens overnight. So our objective is to support innovation, encourage brands and suppliers to bring new technologies to life, and to connect the dots between the shoppers that want more sustainable products and the companies that are becoming increasingly capable of creating them.
Today we require every product we list to have at least one verifiably sustainable element, but as the sector matures – and we see it maturing rapidly – our listing criteria will evolve.
The Interline: Another key element of sustainable shopping is one you’ve mentioned a few times: price. Sustainable brands are operating at a disadvantage here, too, because other market segments can build on economies of scale to hit more accessible price points because of how supply chains, logistics and other value-chain processes are orchestrated. What do you see happening here? Are consumers going to continue to need to pay more for sustainable options? Is consumer sentiment going to pull even the biggest brands towards sustainability and create price parity that way? Or a combination of factors?
David Friedrichs: While sustainable products generally have higher prices, advancements in manufacturing and fiber technologies are resulting in lower prices and an abundance of innovative, stylish, comfortable, and trendsetting apparel. It’s important to remember, though, that brands and retailers are commercial enterprises, and they produce what consumers tell them they want through their buying behaviours, so the power lies with shoppers to drive change on a mass scale.
There’s also a direct correlation between cost and accessibility. Although the market is rapidly adapting to increased demand for sustainable alternatives, it remains quite fragmented – for brands as well as shoppers. Today, if a brand is happy to take the well-worn path, everything from manufacturing and shipping to selling, marketing, and managing waste is already lined up for them in a fairly accessible way – nobody is having to create these processes from scratch. Compare this to a sustainable ecosystem, where there are fewer manufacturers to choose from, few materials to use, and lots of barriers to entry (such as high minimum order quantities) as we begin to see how the deck is stacked against sustainable brands from the outset.
Being so fragmented means that sustainable brands are compelled to spend additional time conventional brands don’t need to on sourcing, manufacturing, shipping and selling – for buyers, it’s a similar story, without a single destination to shop genuinely sustainable products it’s overly time consuming to find products that allow them to purchase with a conscience.
Cerqular’s entire purpose is to consolidate all aspects of the sustainable and ultimately circular ecosystem by centralizing all sustainable trade on one platform that feels native and familiar. Within just a few months, we’ve grown to become a large, sustainable platform with 130+ brands, 45k+ products across all consumer categories, with a presence in 20+ countries. As we scale and continue to raise strategic investment from aligned investors, Cerqular’s growth will convert actual consumer demand into supply that’s more accessible and, ultimately, make sustainable the shopping norm.
In terms of cost and how that’s driving consumer behaviour, in the short term sustainable options will continue to have a premium applied to their retail prices. This won’t be because sustainable brands are greedy, but because of basic economics; these brands are having to reinvent so much in farming, production methods, and other R&D activities that those costs need to be recouped at retail.
On a 5-10 year horizon, though, sustainable products will be priced much more in line with traditional options. But at the same time, conventional products will become far less attractive to produce as governments impose financial penalties on materials and supply chain practices, as natural resources become more scarce and more costly to obtain, and as consumer demand continues to shrink. That two-way trend is already happening, and brands that haven’t already begun transitioning to sustainable practices will be left behind and may not survive the opportunity cost of not being sustainable.
The Interline: From your position as a retailer, how are sustainable brands approaching the question of whether to sell direct to consumer, through wholesale partners, or through marketplaces? Because the issue of whether to prioritise reach or control over the buying experience – and customer loyalty thereafter – is likely to be heightened for mission-driven brands whose sustainability narratives are their differentiators.
David Friedrichs: Multiple factors, including COVID, have put us in a new world where direct to consumer is the new norm for the majority of shoppers. People who already shopped online are more active than ever, and those new to online shopping are finding it more convenient than in-store shopping. There’s no going back from this trend as technology is making online activities more social, accurate, faster and affordable. COVID has made us dependent on technology, for work, entertainment and getting the things we need and want.
Just the other day, we came across a recent Bank of America study on Gen Z, confirming that, thankfully, today’s changemakers are set to be our future leaders. We have a demographic that’s coming of age today during a period of incredible upheaval from COVID, conflict, and the numerous visible and invisible effects of climate change. These are people who will simply not accept the status quo, and who are already hunting for business solutions to the various crises they face.
For all the reasons we’ve already discussed, though, asking each of them to launch their own direct to consumer operations is putting another hurdle in the way of progress, when marketplaces like Cerqular have already done the hard work for them.
It’s important to also note that marketplace platform alternatives to Amazon are on the rise and are gradually taking market share from the conventional goliath platforms, with “43% of Amazon shoppers purchasing something this year from other US marketplaces, which means that more and more marketplaces are starting to grow and catch steam.”
We believe the time for sustainable marketplaces is now. Not only do they provide a way to centralise the discovery of sustainable products for consumers, but they represent major win for brands as they’re capturing a broader audience that was previously unattainable, and at much lower cost than would have been possible through their own direct to consumer channels.
The Interline: Finally, let’s talk technology. Cerqular is pitched as being a platform as well as a retailer, and arguably that first part could prove the most important. But beyond the consumer-facing transactional side of sustainability is also the entire value-chain that leads up to it – what are your thoughts on the role technology has to play in both marketing and selling sustainable products, and in bringing them to market in the first place?
David Friedrichs: Cerqular is a technology company that happens to be focused entirely on solving the climate crisis with a business solution. The biggest advantage we offer buyers and sellers is the ability to save time by making everything easily accessible, all in one place. We connect mission-driven shoppers and innovative, sustainable sellers on a single platform. Plus, we’re now VC funded and primed to scale.
As an example, it can take months to become established as a marketplace seller on traditional platforms, with extensive ongoing maintenance for the brand, whereas we automate as much of that process as we can while still ensuring our sustainability standards are met. And our fulfilment partners use blockchain and AI to run their inventory management with the goal of saving time, cost, and carbon emissions – all with zero minimums.
There’s a lot more we want to do, though, so as we enter our Series A funding round, we’re looking to build new technologies that will allow us to track more interactions, drive more sustainable decision-making, and make sustainable business more profitable by eliminating the barriers that have so far stood in its way.
Cerqular’s ecosystem is actively commercializing sustainability – and ultimately circularity – at scale. Our technology, our understanding of the sustainable consumer product space, and our empathy with sustainable shoppers puts us in a position where we understand our users on a deep and personal level. We’re aiming to fix our largest collective problem: our planet’s survival for the next generations.
