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Fashion isn’t necessarily the first business that comes to mind when one considers the deleterious effects of industry on the environment, but making new clothes is not often an environmentally sustainable practice. On the latest episode of the Pivot podcast, Kara Swisher and Scott Galloway respond to a listener’s question about making fashion greener — and the burgeoning resale market’s role in a possible solution.
Kara Swisher: All right, we’re going to a listener-mail question. For context, Scott, this question was inspired by Chipotle. Your favorite company has started a sustainable fashion brand made from recycled materials — it’s what you’re getting for Christmas. Let’s listen to the tape.
Listener: Hey, Scott and Kara, this is Marley Finnegan from Chicago. How can we as consumers push the fashion industry to better their practices to support environmental sustainability, like Chipotle has been doing? As Scott has mentioned previously, resale fashion is on pace to outsell fast fashion in the coming years, and we can only hope that the pandemic has continued to accelerate this trend. Gen Z’s biggest fear surrounds climate change, and they also make up over 40 percent of purchasing power. When do you think big tech like Amazon will recognize the need to address socially conscious consumerism in order to continue sustained growth with this important group of consumers? Thanks so much.
Scott Galloway: Wow, I did not know about Chipotle forming a fashion brand. Did you know about that?
Swisher: No, I had not, but now we do. So here’s the deal. This is a really interesting question because, as you have pointed out, clothing is really one of the biggest problems environmentally in terms of greenhouse gases. I’ve been wearing the same clothes since high school, so I feel good about my environmental fashion choices. But what do you think about this idea of making sustainability a brand thing? Or is this a trend?
Galloway: So there’s a lot here. The reality is when you buy a little black dress for $9.99, if you were to do any real scrutiny around the supply chain, there’d probably be things you’re uncomfortable with. And I always felt that corporate social responsibility is a tiebreaker that the majority of the market isn’t willing to pay for. We always place greater expectations around the morality of the upcoming generation, but I find that, for the most part, every generation wants a Rolex and a house and an Audi. Young people do care more about the environment, but I don’t even think of it as being socially conscious. They just realize that when they go outside in San Francisco and it’s orange out, something’s wrong. They are probably going to be around to incur the negative externalities of arguably one of the world’s greatest arbitrages in history, and that is pulling shit out of the ground and putting externalities in the air, such that we could create economic wealth.
They are kind of saying, okay, what are the negative externalities of all this arbitrage the baby boomers have gotten wealthy on, and how do we address them? In the fashion community, corporate social responsibility is still an attribute that is sort of cool or en vogue, but I’ve always believed that the only way you really address this is through regulation. Because the moment a company really makes tangible changes around supply chains and materials and energy use and carbon footprint — it’s very expensive. It puts them in a less competitive position than someone who’s willing to come along and not do those very expensive things and will invest the money in marketing or making cooler-looking stores.
You can’t ask these companies to disarm unilaterally. The government has to step in. The question was “How do we make fashion more sustainable?” I generally find there’s consumer dissonance here, in that people talk a big game and then they mostly vote with their pocketbooks by getting the cutest dress for the lowest price. So this requires thoughtful government regulation, and the problem is we’ve emasculated the EPA, the FDA; we’ve decided the government is no longer worthy of investment. It all comes back to the same problem in America, and that is we have become such short-term thinkers. We don’t say, well, okay, if you don’t invest in sustainable technologies, if you don’t invest in the EPA and regulations and tax companies right now and make it more difficult for them to spew shit in the air, we’re going to pay for it eventually. So anyway — long-winded answer.
Swisher: Is this something that companies just use as a branding exercise? Fashion companies used to be collecting clothes and sending them to the Third World, if you recall …
Galloway: Yeah. Toms and LRV. It’s mostly just branding. And Toms has kind of come and gone — because their shoes sucked. I remember being on the phone with someone at Toms, and they said, “We’re a culture of innovation.” I’m like, “Your shoes suck. What’s innovative?” It’s this flash-in-the-pan corporate social-responsibility thing, and if you don’t come up with interesting products and distribution, it’s not going to work.
Swisher: What do you use that’s sustainable? I really don’t buy clothes at all, but that’s just ’cause I’m weird.
Galloway: I don’t think of myself as a socially conscious consumer. I can’t claim that. I would like to be. I’d like to be more thoughtful about it. I had someone come over, and I offered him a Nespresso and he said no and he seemed kind of taken aback by it. And I guess those pods are — I know a lot of people have known this for a long time —are not very environmentally friendly. I started reading about them, and I’m like, “Oh no. There’s another thing that I love that I can’t use.” Look, the resale market is really exciting. By 2028, it’s supposed to be a bigger market than fast fashion. And if you look at the second-wealthiest family in Europe, it’s the family that owns Inditex or Zara. So the amount of wealth that’s going to be created by resale is dramatic. The free gift with purchase here is that it’s obviously good for the environment, but the thing that’s driving it is that, for the first time, this new generation doesn’t have as much money as their parents did at their age. So they’re fine, or they’re more open, to the notion of saying, “Okay, I will wear previously worn. I will wear this really cute top from Free People that’s been worn more than three times that I can buy for 40 percent of the price.” Whereas before, people seemed sketched out by it.
Swisher: Companies like the RealReal had some troubles at the beginning of the pandemic. That had been a growing business. Do you see that continuing, those kinds of things?
Galloway: You mean resale?
Swisher: Resale, yeah.
Galloway: Oh, resale is going to be good. I like the RealReal — one of the things I love about it is Julie Wainwright, who was CEO of one of the biggest dot-bombs, Pets.com, and has reinvented herself and is sitting on top of an interesting company. So I like her story. I think the RealReal is interesting. I think it’s a really neat service. I like the fact that it combines technology platforms and humans. I’ve had someone from the RealReal come over to our house and it’s generally — it’s like the nice part of the gig economy. It’s generally women. It’s generally women who need flexibility. I think they get paid a decent wage.
Swisher: They do. My mom’s made $10,000 from selling her clothes.
Galloway: Yeah, and it’s an opportunity to monetize your closet. I think that the gig workers are paid actually fairly well. I think they make a lot more than minimum wage. So I like the company; I’m betting on them. I think, unfortunately, what ends up happening is this is playtime. The RealReal needs to get acquired because the moment — I mean, for example, and I’m on the board of this company, full disclosure, but Urban Outfitters, with their brands, with their infrastructure, with their consumer base, when they get into resale, as we are, I think there’s just huge advantages there. And then Amazon or eBay —
Swisher: Amazon would be an interesting buyer for the RealReal. Did an interview with her. Were you there recently? She’s a pistol.
Galloway: Would you call a man a pistol? I feel triggered! I feel triggered!
Swisher: Did you just say “I feel triggered”?
Galloway: I feel triggered.
Swisher: She is an actual pistol. She’s a really interesting entrepreneur and has been through a lot. Anyway, it’s an interesting area. Thank you for that great question. And, Scott, the Chipotle clothes are on their way to you, right?
Pivot is produced by Rebecca Sananes. Erica Anderson is the executive producer.
This transcript has been edited for length and clarity.