Siddharth “Sid” Lunawat is CEO and co-founder of Hammoq Inc., a company that automates the ecommerce process for returned item resale and used goods. In the face of an exploding market for overstocked, returned and used goods, where the fashion resale market alone is expected to reach $26 billion in 2022, Hammoq is reimaging “recommerce.”
By using artificial intelligence and machine learning to close the labor gap challenge, Hammoq is overcoming industry barriers which have traditionally limited the product identification, valuation and marketplace listing process.
M.R. Rangaswami: What is recommerce and how is it changing the landscape of today’s retail and ecommerce industries?
Sid Lunawat: Recommerce is the sale of used and returned goods. This includes everything from clothing to electronics, toys and much more. The industry is supported with a tremendous glut of online retail returns. In fact, retail returns topped $761 billion in 2021. This is further accelerated by a high demand for sustainable fashion upcycling and vintage items as consumers, particularly GenZ and Millenials, increasingly make green and sustainable product choices.
Conventional retailers are also starting to shift to a recommerce model to monetize the high volume of product returns that cannot be resold as new. The retail industry has sustained more than $309 billion in return losses and seeks better methods to recoup revenue from their returned item inventory.
While there is an abundance of products as well as resale marketplaces to support this recommerce economy, the challenge is in the labor required to identify product value and push it to the marketplaces where used goods are sold. This is a mounting challenge across the industry from resellers and liquidators to thrifters and retailers. At Hammoq, we are reimagining this recommerce process using artificial intelligence and machine learning, matched with virtual assistants, to automate the online listing process so retailers and resellers alike can sell more and build thriving recommerce businesses.
M.R.: Why is AI a key enabler of recommerce? Why can’t this new retailing trend happen without AI technology?
Sid: Used clothing comes from two main sources – donations or returns. In both scenarios they are dropped in a bin that is then sent to a warehouse. They generally have no tags and because the items are used, the retail price no longer holds. AI can quickly identify the item and its resale price in a way that used to be a purely manual effort. Traditionally, expensive human intervention was required to identify product attributes, assign product value and create the listing that is required to place the product in a marketplace for sale. This high labor cost has prevented the industry from scaling up rapidly.
At Hammoq, we’re overcoming this obstacle with AI-powered machine vision technology. Using machine vision, sellers can quickly and accurately categorize an item. AI automates the product’s description of the color, style, pricing and other attributes needed to accurately list the product for sale. The result is enabling resellers to scale and sell more products, faster.
M.R.: What is the future of recommerce and how will it change the retail supply chain?
Sid: As the recommerce industry grows the stress it puts on the supply chain becomes even greater. Without AI and machine learning technology, supply chain costs will dramatically rise and more products will go wasted in landfills. This also prevents retailers from capitalizing on the demand for increased sustainability and product recycling.
With AI, Hammoq is changing this trajectory by injecting a new, scalable process to more rapidly place returned items back into the retail supply chain. We are helping to increase the volume and profitability of products and shave down the billions of dollars in failed replacement of returned items. Through the use of automation, processing costs per item will drop and retailers can sustain profitability on higher value items, repurposing them more easily vs. liquidating them for pennies on the dollar.
M.R. Rangaswami is the Co-Founder of Sandhill.com