Extending Profitability Beyond Checkout: Recirculating Products Using No-Code AI Platform

Avvale’s 2023 SAP Hackathon winning solution, Reclaim, is an AI solution built on SAP Business Technology Platform that empowers companies to increase prosperity while reducing dependency of materials and energy. While this form of exponential technology is presented here as a fashion solution, the truth is – it can be iterated across industries to weave together profitability and sustainability. Discover the driving challenges, the opportunity, the Reclaim approach, and the profound impact this technology can have on the future of business.

The Challenge

The environmental implications embedded into the fast consumption-fed linear economy are simply not sustainable. Every second, the equivalent of a garbage truck’s load of clothing is burnt or buried in a landfill. The fashion industry emits about the same quantity of greenhouse gasses per year as the entire economies of France, Germany, and the United Kingdom combined. It takes 10,000 liters of water to make a single pair of jeans.

Consumers are deeply aware of the environmental implications, and their loyalty to brands reflects this growing knowledge. 84% of global respondents to a consumer survey said they are more inclined to buy from a brand whose values align with their own; and more than 90% of global Gen Z respondents based their brand loyalty on shared values.

The Opportunity

Technology enables new, circular business models that encourage reuse and reduce consumption, generating new value across all industries in the pursuit of a more sustainable future. This year, the global second-hand apparel market is estimated at US$ 72 billion. It is projected to expand at a prolific compound annual growth rate of 14.8% from 2022 to 2032, reaching a valuation of US$ 283 billion by 2032. 33% of Gen Z’s and millennials did some type of resale purchase or rental in the past 12 months. Participation in the Gen Z and millennial re-commerce market is growing 40% year over year.

The Approach

Avvale created the Reclaim app to capitalize upon this emerging market, increasing profit without increasing inventory. When products reach end-of-life, consumers take pictures of the items and upload them to the company’s loyalty app, equipped with Reclaim technology. AI determines what the products are and the condition, comparing the used products to available stock from the retailer’s S4 system and determining if the products can be sold on the secondary market. The products are shipped back to the retailer in eco-friendly packaging through partnerships with local shipping companies. Consumers are awarded with loyalty points for sending in worn items that can be used within a peer-to-peer marketplace or towards a new purchase.

Developed on SAP Build Apps (formerly AppGyver), the Reclaim application front-end was built using zero lines of code. This allows citizen developers to build professional applications using an intuitive, visual drag-and-drop experience. SAP Build Apps are designed for anyone to quickly build applications regardless of their role or skill level– opening up opportunities for businesses of all industries and headcounts. Using an AI core, the application handles the execution and operations of AI assets in a standard, scalable, and hyperscaler-agnostic way.

The Impact

In a recent trends report, Gartner concluded that “applying the circular economy could unlock trillions of dollars in the global economy, create hundreds of thousands of jobs and lead to millions of tons of avoided emissions.” Avvale created Reclaim intentionally, knowing regenerative systems leveraging AI will be the “True North” for an accelerated path towards circularity. Digitizing fashion can enable circular business models such as rentals, resale, and repair– driving shared values that foster longer lasting, emotional loyalty with consumers.

Using Reclaim, second-hand products become a new business model, transforming insights into consumer demand, product usage, and trends. Targeted sales and incentives reduce inventory, while sustainable and circular models strengthen brand loyalty and boost customer base.

Ready to reclaim your products and extend profitability? Contact us to discuss how we can create a purpose-built customized solution for your business to embrace the circular economy.

by Avvale