Patagonia has always behaved as a maverick company, and its concern for sustainability has led it to pursue a new initiative: it’s now actively encouraging consumers to buy less of Patagonia’s new apparel.
The company intends to influence consumer behavior in order to lower the environmental strain from ever-growing consumption levels. But could a message of “buy less” actually lead to growth for the company? If so, could other companies follow a similarly counterintuitive approach to growth? The answers are “yes” and “maybe.”
To put its “buy less” idea into action, Patagonia recently partnered with eBay to enable consumers to resell their used Patagonia apparel via the Common Threads Initiative within eBay. In addition, consumers will now be able to resell their used Patagonia apparel on a new “Used Clothing & Gear” section on Patagonia’s website. The company wants to influence consumer buying behavior as part of its corporate mission. Patagonia (and other sustainability pundits) views individuals’ consumption as a considerable drain on natural resources. And with the global population forecast to swell to over 9 billion by 2050, left unchecked, this drain will become significant.
Patagonia’s campaign appears both genuine and borderline heroic. But could this approach actually lead to increased sales? And if so, should your company pursue a similar strategy? Three tactics are available to companies that focus on high-quality goods. Companies that aren’t known for high quality will have a much more difficult time employing the first tactic, in particular:
1. Increase prices
An undercurrent of Patagonia’s message is that consumers should buy high-quality apparel that will last a very long time. It makes sense that such apparel would command a premium price relative to lower-quality substitutes. So, in theory, Patagonia can quietly raise its price per item to a point that would offset (and then some) the potential decrease in quantity sold as a result of its campaign.
2. Sell more new apparel
It sounds strange to say that encouraging customers to buy less new apparel could actually lead to increased sales volume for Patagonia. Yet this scenario is possible. Two types of customers could be more inclined to buy new Patagonia apparel as a result of Patagonia’s efforts: customers who make decisions based on sustainability considerations and customers who can now sell their used Patagonia apparel for cash to buy new apparel. Indeed, John Donahue, the CEO of Patagonia’s new business partner, eBay, suggested this might be possible: “Patagonia is extending its customer base and increasing it. People who are selling it are likely to turn around, take the money they got, and buy the new Patagonia products.”
3. Expand into new categories
Patagonia could seek to sell both upstream and downstream. Typically, when we consider who our customers are, we think “downstream.” In other words, we focus on the volume of finished goods sold to consumers. But what if we challenged this assumption by adding “upstream” (i.e., suppliers) when we consider ways to increase quantity sold? For instance, what if Patagonia works with retailers and consumers to recycle clothing that has been too worn to be resold and then sells the used materials back to its upstream suppliers at a lower price than comparable virgin materials? For this to work, Patagonia’s price to suppliers would need to be lower than the price suppliers pay for virgin materials. That’s a distinct possibility, given commodity price appreciation in recent years.
Is Patagonia’s potential success with this strategy replicable by other apparel companies? For a limited number, it’s possible. It’s likely to work only among companies that, like Patagonia, feature a shareholder base with a long-term orientation (Patagonia is privately held), a long-standing commitment to sustainability, and high-quality products. For those willing to try this approach, it could provide a counterintuitive growth strategy.
One thing is certain: If Patagonia does see growth from this approach, a new arrow will emerge for placement in companies’ growth quivers. And sustainability will become more closely aligned with business success as a result.
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