Eco-Innovations Unleashed: How BackMarket, Vestiaire Collective and Vinterior Are Shaping the Future of Circular Economy

The transition toward a circular economy is as urgently important as ever, and for many, time spent waiting for regulatory action is a luxury that we don’t have. As public awareness of the climate crisis grows, digital platforms are leading the way in unleashing eco-innovations and driving circularity forward. By enabling consumers to reuse, repair, resell or recycle products – especially in resource-intensive and highly disposable categories like smartphones, furniture and clothing – platforms are making major strides toward minimising resource consumption and waste. 

Jennifer Schenker, Founder and Editor-In-Chief of The Innovator, has been a Tech Pioneers Judge at the World Economic Forum in Davos for 20 years and knows how vital this impact is. “Although more than a hundred billion tonnes of materials are extracted from the planet annually, only 7.2% are cycled back into the global economy, according to the 2023 Circularity Gap Report”, she explains. “The world used more virgin resources in the last 10 years than in the previous century. More than 90% of materials are either wasted, lost or remain unavailable for reuse for years, as they are locked into long-lasting stock such as buildings and machinery. 

“To limit global warming to a two-degree increase, we need a holistic shift towards circularity”

 

Jennifer Schenker, Founder And Editor-in-Chief, The Innovator

“The energy transition is already well underway, but the other 50% of factors leading to climate change have to do with materials – and we’re just scratching the surface there”, continues Jennifer. There’s a business opportunity to combine good economic models with addressing big environmental problems, and not surprisingly, startups are leading the way.”

As digital platforms expand, so does their potential to make significant, lasting and positive change on the environment by reducing demand for brand new products and encouraging circularity – all while maintaining a healthy business.

Circular economy startups with a mission to unleash eco-innovations

Many digital platforms in the circular economy space share a vision: taking a different approach to purchasing and using physical products, particularly in product categories that generate the most waste. Luxury fashion resale platform Vestiaire Collective began in 2009 with this ambition in mind, says Julie LeJeune, the company’s Head of Germany/Austria & the UK. “What we wanted to do was fight overconsumption and overproduction”, she tells us. “We’re mainly focusing on luxury goods and luxury products – offering timeless pieces that, from a quality perspective, can have a second life.” At Vestiaire Collective, more is not always better when it comes to the size of one’s wardrobe. The platform now operates in more than 80 countries worldwide, offering a catalogue of over five million products. 

Katy Medlock is the UK General Manager at Back Market, a leading marketplace for refurbished electronics, boasting 10 million customers worldwide. “We want to make sure there’s no reason why you would choose to buy a new electronic [device] anymore”, says Katy, pointing out that many technology companies are rolling out fewer features with each new product release. “There’s absolutely no reason why your iPhone 11 or iPhone 13 won’t last you for a good three, four years longer. We’re fighting planned obsolescence in the tech and device space.”

According to Sandrine Zhang Ferron, the Co-Founder and CEO of Vinterior, 10 million pieces of furniture are thrown away in the UK each year. “The majority is new furniture, because fast furniture is just not meant to be long lasting and it can’t be repaired.” Sandrine left her career in finance back in 2015 to start Vinterior, a marketplace for quality vintage and pre-owned furniture. “[The furniture] industry, unfortunately, is very wasteful: the cost of manufacturing, the materials, the emissions, everything that lands on the landfill”, she says. Her company works with 2,000 dealers across 30 countries in Europe, helping these small businesses access an audience – primarily in the UK – that values pre-owned design.

In Sandrine’s view, the fast furniture segment is particularly to blame for the proliferation of waste. “It’s great to give people access to affordable design, but if one piece is broken, you can’t repair it”, she says. “It wasn’t designed to last.” Vinterior offers consumers an alternative, Sandrine adds: “For us, it’s really [about helping] people think differently when it comes to furniture. You don’t need to sacrifice quality or affordability to get something which is durable quality and also better for the planet.”

Meanwhile, Back Market is focused on reducing two specific types of environmental impact: e-waste and carbon emissions. “Of all the waste that’s in landfills, about 75% of what’s toxic is coming from electronics”, explains Katy. Back Market aims not only to prolong the life of electronics and encourage repairing items instead of replacing them, but also to guide consumers toward refurbished items when they do need to buy electronics. In turn, Katy says, this contributes to a reduction in carbon footprint: “It is so carbon intensive to produce something [like a phone] – the amount of raw materials, the amount of water, the amount of power to produce this tiny little device.” 

“From a carbon footprint perspective, buying refurbished is a really easy, logical and affordable choice that you can make.”

 

Katy Medlock, General Manager UK, Back Market

According to Katy, many of the resource-usage metrics are 90% lower for refurbished electronics.

Generating a better purchase experience with AI

To make the choice even easier for consumers, digital platforms are looking to new technologies like generative AI. Back Market has leveraged AI to improve the purchasing experience for users, making it more akin to buying new. Katy illustrates: “You walk into an Apple store and you have tech geniuses coming to help you make the right choice. What size of storage do you really need? What screen do you actually need? Why is this model better than this model? That’s something that Back Market is trying to introduce to make our purchase experience just like [it is to buy] new.” However, Back Market has to contend with the lower purchase prices and profit margins of refurbished electronics. They’ve turned to AI to provide higher touch customer support without increasing their overhead costs. As part of their brand and creative campaigns, Back Market has created an AI-powered character – described by Katy as a “monster ambassador” – that customers can consult to find devices with the right specifications. “The reason is to provide the support that you would get if you were buying new”, she adds, “not just from the online purchasing experience, but the customer care returns, warranties, guarantees, split payments. We’re making it so there’s no logical reason to purchase something new.”

Sandrine and her team at Vinterior are employing AI for three major purposes: productivity gains, streamlined customer support and improved product discovery for users. Engineers might use AI to write code more quickly, freeing up their time for creative problem-solving and product ideation. In customer support, AI is helping to craft answers or automatically detect sensitive customer inquiries. And Sandrine believes that AI-powered product discovery might even be the most important pillar for Vinterior, explaining: “We have 400,000 [products] on the platform. Each one is unique. There is no standardisation, there is no ISO code and some items don’t even have a brand. So, how do you help customers – who have very different tastes, needs and budgets – to find the perfect piece and not be overwhelmed?” This is where AI comes in. “The idea is to use AI to help with all our data, product classification, taxonomy and search”, Sandrine says. Looking ahead, she hopes that Vinterior will soon provide customers with AI-generated product recommendations, as well.

At Vestiaire, Julie’s experience echoes those of Katy and Sandrine. “Our platform is highly scalable, but we also wanted to use technology at every stage […] for example, using a price recommendation algorithm in order to make sure that we’re showing the correct price to the user and helping the community to [choose] secondhand”, she tells us.

“The idea is really: how can you buy a secondhand product with the same ease that you buy a firsthand product?”

 

Julie Lejeune, Head of Germany/Austria & UK Vestiaire Collective

Vestiaire also takes location into consideration in its matching and search functions, since shipping items around the world has an additional – often unnecessary – environmental impact.

Market expansion as a circular economy platform

For Katy, Sandrine and Julie, operating in an international context comes with its own unique challenges of governance, regulation and cross-cultural expectations.

Marketplace platforms connect users and allow them to transact, but the degree of platform governance can vary significantly. For platforms with minimal governance, this can come with complications, as Katy observes: “There’s a challenge of being a marketplace and not owning your entire customer journey.” This is particularly the case for platforms like Back Market that operate in countries with differing languages, purchase methods and user expectations. In 2022, the company launched an optional service for its sellers to source their customer support through Back Market’s internal team. “It was so successful in solving that consistency problem, that cross language, cross-cultural problem that we’ve actually made it a mandatory part now of doing business on Back Market”, Katy tells us. “It’s a bold move”, she admits, but one that has paid off. “Our customer service [ratings] shot through the roof. Since doing this, it means that everybody’s getting consistent service.” This consistency has allowed Back Market to overcome the cultural and language barriers that might have otherwise hampered their growth across markets.

Post-Brexit, differing regulation between the UK and the EU has proven a challenge for Vinterior, as have the various VAT regimes across European countries. Moving a product from one country to another can incur added costs of 20%, which may come as an unwelcome surprise to buyers. “That’s really something we want to avoid for our customer and that we are still working through”, Sandrine says.

In the pre-owned fashion segment, platforms need to adapt to drastically different cultural perceptions across markets, says Julie. “In Germany, [pre-owned fashion] is more seen as thrift shop and quite low quality – you go to these shops when you really want something cheap. Whereas here in London and in the UK, [buying vintage] has more this notion of creativity and expression. […] We see completely different perceptions throughout the European market.” While branding and market positioning are important, Julie points out that there are also opportunities for creative localisation and customer education. “In Germany and the UK, it’s [about] facts; France needs a bit more storytelling”, she explains. “[And] we’re using AI in order to localise our product catalogue.” This allows Vestiaire to further customise the user experience and better cater to market variations in preference and taste. It’s a vital balancing act, because, as Julie notes: “We need to get the supply and the demand within the same population.”

Trading fast fashion for ecodesign principles

If we are to achieve a large-scale shift to a circular economy in time to make a meaningful difference for the climate, no one platform can power the change alone. “We are at a crucial moment with today’s circular economy”, Julie believes. “We need to change the regulation, […] because we’re still very much on the previous model and there is a lot of definition that needs to be done.” For example, she brings up Vestiaire’s recently introduced policy of removing fast fashion brands from their platform. This prompted important discussions between Vestiaire, fashion industry specialists and government representatives about which criteria define fast fashion. Without shared definitions and concepts, she thinks, it’s difficult to accelerate change – but decisive action can have real impact. After Vestiaire’s policy on fast fashion brands came into effect, the team conducted a comparative analysis and found that 70% of fast fashion buyers moved to purchasing higher quality products. “It takes time and is mostly an educational element that our industry needs to work on, but people are changing their behaviour if we give them the opportunity to do so”, says Julie.

Circular economy startups are also advocating at the regulatory level for legislative changes that will encourage shifts in consumer behaviour. A series of proposals have progressed through the European Commission in the past several years, including a set of ecodesign principles that will govern the manufacture of electronics.

“From 2025, new OEMs [original equipment manufacturers] for phones or electronics made in Europe will have to follow these ecodesign principles”, says Katy. The regulation applies to products throughout their lifespan, including making sure that replacement parts and repair instructions are easily available. “It’s very linked to the right-to-repair movement”, Katy continues. “It’s absolutely game changing for us and for our refurbishers – and for the environment as well – because it’s really enabling the work that [refurbishers] do. I think if we weren’t to see regulation like this change, you would see OEMs continuing the cycle of planned obsolescence and making this really difficult for companies like us.” Sandrine echoes Katy’s opinions on design principles that centre sustainability from the beginning of a product’s life. “Is it designed to last to be repairable, reusable, recyclable? Often, it’s not”, she says. “I think that [regulation] could also do more to encourage transparency for brands.”

VAT: one thing that shouldn’t be reused?

For the circular economy to truly scale, there’s another place where regulation could have a positive impact: consumers’ wallets. In Sandrine’s view, value-added tax (VAT) is an obvious deterrent to buying pre-owned goods – and one that could be removed. “Why tax the same item every time it’s resold?” she asks rhetorically. “It’s already been taxed at the beginning.”

“If you want to encourage people to reuse and resell, […] just cut the VAT.”

 

Sandrine Zhang Ferron, Founder and CEO, Vinterior

Julie agrees that this is a major area of opportunity. “Our top management and our chief sustainability and impact officer [at Vestiaire] are working very closely with the European Commission in order to change VAT on secondhand products”, she tells us. “This is a way that we could accelerate on those categories – if customers really receive an incentive. […] Affordability is still the first driver to buy secondhand.”

Good for the planet and good for business

The full scope of future opportunities may be difficult to estimate, but in Katy’s view, all signs point toward a paradigm shift in consumer behaviour. “[Back Market has] 10 million customers. We’re one of France’s most highly valuable and fastest growing unicorn [startups]. We’ve raised a billion [dollars in funding] in our history, and I think that all stands as testament to the fact that consumers are ready for this now”, Katy says. She sees the circularity movement picking up speed: “This is not an academic’s dream anymore. This is a very realistic growing segment.”

For her part, Sandrine left the world of finance to start Vinterior, and she’s still convinced of the size of the business opportunity. “When you think about the overall furniture market, excluding fast furniture, there is 40 billion [worth] of new, premium-quality furniture entering the market every year. Each new piece is a candidate for resale. So, that’s just the beginning”, she thinks.

And whereas resale platforms may once have been perceived as direct competition to new retailers, brands are increasingly shifting their strategy to include resale options as a business driver. After announcing collaborations with Chloe and Gucci earlier this year, Vestiaire has recently announced their partnership with Burberry, the iconic British luxury retailer. “We are becoming their official secondhand retail platform partner”, explains Julie. “Burberry customers who have a trench or a bag that they’re not using anymore can go through the platform and [offer] it for resale.” She sees this strategy as a win-win. “[Luxury houses] are bringing us on as their partner to encourage circularity, encourage loyalty and also to bring value to the company”, she says. “This is creating a longer customer lifecycle [and increasing] re-engagement.”

Conscious consumption, starting now

To achieve real planetary impact, platforms need participation from governments and consumers alike. Katy wants to see policymakers taking circularity seriously: “[Governments need to] jump on this right to repair [movement] and provide some good, robust regulation that will stop this e-waste problem, because it is growing and it is terrible for consumers.” She explains further: “We ran a consumer study that showed that the average Brit had something like £4,000 [worth] of tech and devices sitting in their top drawer. In a cost-of-living crisis, that’s quite a lot of cash sitting there doing nothing. And in an environmental crisis, it’s a lot of valuable raw materials that you could literally be trading in.”

There are plenty of opportunities to make changes at many different levels, in Sandrine’s opinion, and she has another challenge for governments and businesses: “Talk the talk and walk the walk. I would be very curious to know how many government buildings have secondhand furniture.” 

In terms of practical action as a consumer, all three of these platform leaders are unanimous. The best thing, they believe, is to simply start. “Explore, discover, make your first purchase – for you, for friends, for Christmas – and see how it goes”, says Julie. “Once you enter into this movement, you really stick to it.”

Katy shares a personal anecdote from her household, which welcomed a new baby not long ago. After two months of making many necessary new purchases, her family tried out a policy of not purchasing any new items for 30 days. The result was a success, she says. “Every now and again I see the place for [buying new], but I would say that [this experiment] made me a much more conscious consumer.”

For Sandrine, the motivation is twofold, but simple: “Resale is good for your wallet, and it’s good for the planet.”

To go further

This panel with Jennifer Schenker, Julie LeJeune, Katy Medlock and Sandrine Zhang Ferron was part of the Platform Leaders event organised by Launchworks & Co on the 9th of November 2023 at the Science Museum. Attended in person and online by hundreds of experts from all over the world, Platform Leaders provides an opportunity for entrepreneurs, academics, practitioners and policymakers to understand the issues and shape the debate. Stay tuned for more valuable insights from the latest conference, check out the full list of speakers and agenda, as well as videos and articles, and join the community to learn about upcoming events and more.