NEW YORK – Climate tech company Queen of Raw recently secured fresh funding which it will use to help companies turn waste into a revenue source via its software solution, Materia Mx. Queen of Raw’s inventory management technology was released over a year ago as growing supply chain inefficiencies, rising prices, and excess inventory escalated amidst the global pandemic. All are depleting company profits as well as potentially having negative environmental impacts.
Materia MX allows companies to digitally manage, resell, and recycle excess inventory from a centralised location, with end-to-end automation and reporting in the cloud.
The fashion space, notorious for its inefficiencies and excess inventory issues, is prime for such a solution. With this in mind, Apparel Insider spoke to Stephanie Benedetto, CEO of Queen of Raw, and co-founder, Phil Derasmo to find out more.
The pandemic has shone further light on inventory inefficiencies which have plagued the fashion sector for decades.
“The pandemic closed stores, orders were cancelled, seasons were missed and all of this meant supply chains were broken,” Benedetto says. Other factors have added to the problem, including the huge backlog in the Suez canal after a freight container became trapped. Then there is the huge rates of product returns and lockdowns in China which have fuelled further bottlenecks.
Benedetto estimates that prior to the pandemic, there were annually US$120bn worth of used textiles sat in warehouses “gathering dust.” This figure, she suggests, has now more than doubled, with huge quantities of stock distributed at various stages along supply chains.
Benedetto says businesses know they have a problem, but the sheer volumes involved make it almost impossible to manage.
Reusing stock internally is the best case scenario but this is not always possible and other channels needs to be explored. Growing regulation in this area relating to how fashion deals with end of life issues around stock means pressure is being ramped up on brands to find an effective solution.
Queen of Raw’s technology can be integrated into the inventory system of large enterprises. “We find all their unused produce, from their raw materials to finished goods,” she says. “We pull this data into an engine so that clients can take action globally at the click button, whether it is to re-use, recycle or donate it.”
Using Materia MX, one leading fashion brand saved US$10m in otherwise unsellable inventory and US$4m in holding costs through resale and recycling initiatives in Asia, diverting 95 per cent of its 10 metric tons of liabilities from landfill and combustion.
Benedetto suggests excess inventory is a major blind spot for many large enterprises. It’s the classic “unknown unknown,” the dark data which often represents a huge liability on the books of multi-nationals.
“We help to aggregate, clean up and centralise this dark data,” she says. “We have a global network of partners which means we can become the backend engine for fashion to help facilitate their resale movement.”
Benedetto points out that resale platforms are a hot topic right now and many fashion brands are exploring this avenue. However, she suggests, “a lot of brands want their own resale channel but who is on the back end managing operational and logistical issues around this?”
This is a pertinent question and our own take is that in their eagerness to enter resale and not get left behind by rivals, some brands might have bitten off more than they can chew. Outsourcing the logistics of this work makes sense, if this is not happening already.
Benedetto and her colleagues are already working with retailers in the fashion space, and further announcements on this front will come in 2023.
She believes the issue of inventory management is evolving and the pandemic may prove a watershed moment. “When I first started looking at this issue pre-pandemic, I was just talking to sustainability departments,” she says. “With the push towards the circular economy, this is becoming a top priority for every C Suite. The sustainability team is talking to the design team about designing for recyclability. The finance and legal teams are also involved, with CFOs keen to get inventory off the books from a reporting point of view. This space is evolving fast.”
For more about Queen of Raw visit: www.queenofraw.com