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H2020

SOMAPI Report Summary

Project ID: 673581

Periodic Reporting for period 2 - SOMAPI (Swap.com On-line department store for Massive Amount of Pre-owned Items)

Reporting period: 2016-07-01 to 2017-09-30

Summary of the context and overall objectives of the project

Manufacturing of the items that are consumed bear a burden to our environment and create a significant part of the environmental footprint of our lifestyle. A part of developing more sustainable lifestyles is to extend the life time of items and foster re-use of the items. In our vision, the first preference would be to acquire a pre-owned item and only if that is not feasible, the purchase of a newly manufactured item produced in most sustainable way and designed for long use. The new apparel and footwear market size in Europe is about 400b € per year. According to the European Commission, EU consumers discard 5.8 million tonnes of textiles every year, with only 1.5 million tonnes (25 %) of these post-consumer textiles being recycled by charities and industrial enterprises. The remaining 4.3 million tonnes goes to landfill or is burnt in municipal waste incinerators. Swap.com estimates that the second hand apparel and footwear market potential in Europe would be 80-100b € per year (estimating average item resale price of 25-30% of the new item resale price). Clothing manufacturing is the second largest CO2 emitter after energy production and consumes significant portion of the water used for agricultural purposes worldwide. Current solutions to address the pre-owned item market are either physical shops or peer-to-peer services where the customer needs to list and ship the items themselves. This requires big effort and most people will not this trade their items in these peer-to-peer marketplaces. Other alternative is to give the items to pre-owned item shops (charity shops or recycling centres) that sort the items, price them and put them to their shop floors. Although these shops are relatively popular in certain markets, these shops have not gained widespread adoption since customers do not necessarily find what they are looking for due to limited inventory and difficult search process.

Swap.com provides an on-line consignment department store with massive selection for pre-owned items in a cost-efficient and easy-to-use way where customer can select what they need in few seconds. Solving the environmental problem related to throwing away good clothing is a huge business opportunity.

This project has to created most advanced industrial scale technologies and processes for processing and selling pre-owned items on-line. The technology is readily usable in European context as a part of turning European economy more environmentally sustainable. In doing that, there is a big business opportunity in solving the environmental problems related to the throwaway fashion.

The long-term objective of this project is that in 5 years Swap.com is the European based leading on-line processor and seller of pre-owned items worldwide. This new industry has the potential in creating thousands of new jobs.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

The project went well and most of the tasks in the plan were completed in schedule. Personalization system was developed along with product recommendations. Item similarity project was completed. iOS and Android apps were developed and launched. Swap.com’s own analytics data collection engine was developed and implemented.

On the fulfillment side, a new process layout was implemented. Several improvements to the fulfillment software were implemented including for example automated colour recognition. The work on automated conveyor control was completed. Real-time data collection and dashboards were developed and implemented for the production management.

The development has been done in Finland, i.e., in the European Union and has thus increased the technology skills in the pre-owned item processing sector in the European Union.

The non-confidential results have been disseminated in various media. All the deliverables and technology can be readily deployed to the various European markets.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

There has been massive savings in the carbon footprint when items have been re-used instead of thrown away or recycled. Several million items have already been trade through Swap.com. The project has increased Swap.com's capacity to process items and the overall amount of traded items.

Specifically, Swap.com has already
- re-sold 5 million items.
- saved 34 billion liters of water. This is equivalent to 13,600 Olympic swimming pools.
- reduced CO2e usage by 128,000 tons. This is equivalent to 27,000 cars driven for 1 year.
- reduced pesticide usage by 2.4 tons.

The project results, i.e., technology and process blueprints developed in Finland allow the company to launch its operations in the European Union area.

Swap.com has grown to be the largest online store for the pre-owned items in the competitive US market thanks to the technology developed in Europe (Finland). On the long term, this position allows Swap.com to develop further it's position to become the world leader in online consignment and paves the way for the launch in the European Union. Technology and process can be readily used for the European market and blueprints develop in the project shall make the building phase fast. This shall give European Union one more tool to reach the long term environmental sustainability targets and create more jobs to the European Union area. It will also allow European Union to compete on the worldwide eCommerce market with a more environmentally sustainable alternative. This project has been an important milestone towards this long term goal by creating the blueprint operational processes and technology that can be used in launching Swap.com in Europe. In parallel to the project, company has done preliminary planning for the European launch and if that would be done, the company would establish it's fulfillment center in one of the convergent countries also helping to develop their economy and creating jobs.

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