Circularity

On average, a purchase on Otrium prevents 2.13 kgCO₂e and 30g of waste, compared to other methods brands might use to dispose of their leftover stock, such as donation or disposal.

Quantifying our impact

To quantify Otrium’s impact, we partnered with Vaayu, a carbon-tracking platform, to conduct an independent analysis of the emissions and waste-saving potential of our outlet business, based on data from five million purchases and insights from over 45 fashion brands.

By extending the life of fashion items that might otherwise go to waste, Otrium offers a way for fashion brands to maximise profit while minimising their environmental impact.

The off-price sector – those that sell unsold, new fashion items – usually has two business models: 

1. Selling excess stock from brands at a discount
2. Developing new products specifically for outlet stores

Otrium primarily operates through the first approach with an additional service of refurbishing and reselling returns.

A rigorous approach

To calculate the impact of Otrium’s business model, Vaayu compared the carbon emissions and waste of selling a fashion item on our platform against alternative ways for brands to clear their excess stock, such as donation or disposal, based on survey responses from over 45 fashion brands.

Following a Life Cycle Assessment (LCA) approach, Vaayu calculated the carbon emissions and waste generated by sold fashion items on Otrium, minus the carbon and waste impacts of using alternative stock clearance channels, plus any additional impacts generated by  market rebound effects, like changes in consumer purchasing behaviour.

The results were calculated on a per-product level for over five million fashion items sold on Otrium during 2022, and then expanded to quantify the impact of our brand partners and our overall business.

Going deeper

Vaayu’s analysis took a conservative approach to avoid overrepresentation of Otrium's carbon and waste savings. The methodology was also independently reviewed on a regular basis with Dr. Stephen Allen, Associate Professor of Life Cycle Assessment at the University of Bath.

The carbon emissions and waste generated by fashion items sold on Otrium were calculated using data from two sources, following the latest EU Product EnvironmentalFootprint Category Rules for Apparel and Footwear:

1. Vaayu’s proprietary Carbon Modelling Engine
2. Otrium’s input, such as product type, product size (weight), material composition, fabric construction, country of origin and country of sale)

This forms a baseline footprint for the typical life cycle of an item – think manufacturing, distribution, sale and disposal – which can be used to compare the potential carbon and waste savings. It also includes the impacts from Otrium’s refurbishment process (fixing slightly damaged items). 

The carbon emissions and waste from alternative stock clearance channels were then calculated and compared against the baseline footprint of selling via Otrium. This helps estimate the potential savings from extending the life of fashion items and avoiding direct disposal through landfill, recycling or incineration.

The likelihood of brands choosing alternative stock clearance channels in the absence of Otrium was based on survey responses from 45 fashion brands about their unsold stock practices.

The calculations took into account two main scenarios:

1. Stock clearance pathways leading to resale, where the fashion item follows a similar journey to sale via Otrium and is still used and eventually disposed of.
2. Stock clearance pathways leading to disposal, where the fashion item is considered to be ‘deadstock’ and would eventually go to waste or be downcycled. In these cases, the item is not available for the customer to buy, meaning a new item may be bought elsewhere. Selling through Otrium therefore avoids the carbon and waste from disposal of the original item, as well as the (partial) manufacture and sale of the additional new item.

The carbon emissions and waste generated by market rebound effects were also included to account for changes in consumer purchasing behaviour, based on an econometric analysis of primary sales data and additional secondary research.

Customers may buy more than initially intended because they consider a product to be a ‘great deal’ with limited availability. More additional purchases results in more carbon emissions and waste, which ‘cancels out’ some of the carbon and waste otherwise avoided by Otrium. This increase in overconsumption was estimated by modelling the increase in sales due to reduced prices for both excess stock and new production. 

The results show a relatively low Excess Purchase Rate of 18% - this means that for every six items sold on Otrium, a customer buys one more additional item. On average, 82% of purchases on Otrium therefore remove the need for a new item.

For more information about our methodology and activities read the Methodology Report.