The Digital Supply Chain podcast

Bringing Sustainability To The Fashion World - A Chat With Queen of Raw's Stephanie Benedetto and Phil Derasmo

July 09, 2021 Tom Raftery / Stephanie Benedetto / Phil Derasmo Season 1 Episode 146
The Digital Supply Chain podcast
Bringing Sustainability To The Fashion World - A Chat With Queen of Raw's Stephanie Benedetto and Phil Derasmo
Show Notes Transcript

When we think of the world of fashion, sustainability is one of the last words we'd associate with it.

However, Queen of Raw wants to change that. Queen of Raw has built a software platform to help organisations discover, buy, and sell material that would otherwise go to landfill, or be burned. Given that around $120 billion of material is wasted annually, there's a huge potential for savings.

I invited Stephanie Benedetto and Phil Derasmo, Queen of Raw's CEO and COO/CTO respectively (and the company co-founders) to come on the podcast to tell me how they're cleaning up fashion's supply chain.

We had an excellent conversation and, as is often the case, I learned loads, I hope you do too...

If you have any comments/suggestions or questions for the podcast - feel free to leave me a voice message over on my SpeakPipe page or just send it to me as a direct message on Twitter/LinkedIn. Audio messages will get played (unless you specifically ask me not to).

To learn more about how Industry 4.0 technologies can help your organisation read the 2020 global research study 'The Power of change from Industry 4.0 in manufacturing' (https://www.sap.com/cmp/dg/industry4-manufacturing/index.html)

And if you want to know more about any of SAP's Digital Supply Chain solutions, head on over to www.sap.com/digitalsupplychain and if you liked this show, please don't forget to rate and/or review it. It makes a big difference to help new people discover it. Thanks.

And remember, stay healthy, stay safe, stay sane!

Stephanie Benedetto:

A marketplace to sell waste is great. Want to make money? Sell it free up that very expensive warehouse space. Awesome. But waste is expensive. It's inefficient. How can you capture the data and intelligently minimize it and do better going forward? And that's really the long term vision and where the software and tools are going.

Tom Raftery:

Good morning, good afternoon, or good evening wherever you are in the world. This is the digital supply chain podcast, the number one podcast focusing on the digitization of supply chain. And I'm your host, global vice president of SAP. Tom Raftery. Hi, everyone. Welcome to the digital supply chain podcast. My name is Tom Raftery with SAP and with me on the show today I have my two special guests, Phil and Stephanie. Finance. Stephanie, would you like to introduce yourselves with maybe Stephanie going first?

Stephanie Benedetto:

Thank you, Tom, so much for having us. We're thrilled to be here. Hey, everyone. My name is Stephanie Benedetto, and I'm the CEO and co founder of Queen of Raw. So we are a global marketplace where anyone from a student maker crafter, quilter, to the biggest brands and retailers in the world can buy and sell their unused fabric and textiles, keep it out of landfill, and turn what would be pollution into profit. And we're really excited to kind of be able to drive forward this movement and reduce the world's textile waste and pollution.

Tom Raftery:

Fantastic. And Phil.

Phil Derasmo:

Hey Tom, thanks for having us. I'm Phil Derasmo. I'm the co founder, CTO and Chief Operating Officer here at Queen of Raw.

Tom Raftery:

Nice. Okay, and so can you can you tell me first, Stephanie, and Phil? Why? Why, why? Why did you embark on this? Why are you doing this? Why is this important?

Stephanie Benedetto:

Yeah, you know, I'm on a mission to solve the world's water crisis. And textile production, by some accounts is actually the second biggest polluter in the world of clean water globally. It's so it's fascinating, right. And a lot of people don't know, one t shirt actually takes an average 700 gallons of water to produce it well, and another 700 gallons of water to wash it in its lifetime. That's one shirt. And over 2 billion shirts are sold around the world every single year. And so this is something that has really stood out to me, I do come from a family background of over 100 years in fashion and textiles I grew up around this industry. And as powerful as it is I just saw this waste and inefficiency. And believe there had to be a better way and a better way for people for planet and also for businesses profit. And, you know, for me, personally, I'm doing what I'm doing for my children. I want them to have clean water to drink clothes that aren't toxic to wear to planet to live on. And that's kind of what drives me every day.

Tom Raftery:

Okay, and so you've created this platform, maybe you feel you want to talk a little bit about the platform that you're using to do this.

Phil Derasmo:

Sure, absolutely. So when Stephanie and I met six years ago, she told me about the problem that she was witnessing. She had been cree..., she had been manufacturing her own sustainable textile at the time, and saw that there was a bigger problem. And as she would look over and at the warehouses or talk to people, she saw that there was all this waste, you know, at the time, it was over $120 billion being burned or buried at landfill. And that number has since doubled at this point. Six years later. And I immediately resonated with it. I said, .

Tom Raftery:

Wait a second You just said that number doubled in six years?

Phil Derasmo:

Yes. Yeah. It's, it's, you know, I mean, the industry, textile industry is is focused on on their finished products. They're focused on doing on creating the best product they can for their end customers. And unfortunately, there's been a lot of waste that takes place along the way.

Tom Raftery:

Wow, that's that just blew my mind there with that number. Sorry, I interrupted you.

Stephanie Benedetto:

No, it's staggering. And it's been fascinating through COVID. To see right. I mean, we're currently experiencing a crisis of supply more on used inventory than ever before, obviously, from the raw material side all the way to the finished goods side. And, and as Phil mentioned, that this hasn't historically been what these businesses are focused on is what's unused, but it's a huge opportunity for businesses to do better today and thrive tomorrow.

Tom Raftery:

Okay, and how do you so if I am in the trade, and I making garments of some kind, how do I come across your platform? How do I use it? How does all that work? Let's Let's walk me through the process, if you don't mind,

Stephanie Benedetto:

happy to you know, as when we started At this business, we opened it up as a marketplace, where anyone could participate in the activity of buying and selling their unused textiles, kind of like a real, real poshmark D pop thread up right, or, but instead of finished goods for the pre consumer weights, the fabrics that aren't being used. But as we've been growing the marketplace globally, we're on every continent now. And as we've been working with larger and larger enterprise corporations, we realized that there was more we could offer and do for them to support them. Because this isn't just about, you know, taking a couple of yards of scraps off a cutting room floor and selling it. When we look deeper into this problem, these large companies had hundreds of 1000s to millions of yards, in mint condition, a fabric still sealed on rolls that they weren't going to literally burn or bury. And with that kind of volume, right? I mean, we had to be able to support them in a way that was automated, and at scale. And so that's where as we've been growing the marketplace, we've been built behind it some pretty powerful software and tools that allow enterprise customers to do more faster. But with less, they can find all that waste in their supply chain from a tier one supplier down to a tier 14 supplier, automatically with the click of a button or within SAP integration, pull it into Queen of Raw's engine, and then our software takes over. You can take action on it. Do you want to reuse what you're not using across your own supply chain or with other brands and divisions and departments within your company? Do you want to resell it across Queen of Raw's marketplace? And we take care of everything from payment processing to shipping logistics? Or do you want to recycle it with one of our end of life partners. And so it's as quick and easy as that. But for large volume inventory I you know, at scale and automated. And the beauty of it is as you do all these actions, it starts to tell you what are the measurements of those activities, the amount of water, the toxins, the carbon emissions, and perhaps most importantly, the dollars you as a business have saved by finding and selling this waste and over time intelligently reducing it. And I think that's something really unique and powerful because a marketplace to sell waste is great. You want to make money, sell it free up that very expensive warehouse space. Awesome. But waste is expensive. It's inefficient. How can you capture the data and intelligently minimize it and do better going forward? And that's really the long term vision and where the software and tools are going.

Tom Raftery:

Okay, and speaking of software and tools, what kind of technologies are underlying your platform,

Phil Derasmo:

Our platform set up so that it's very flexible? We so mentioned earlier, we started with this marketplace, and we saw all these holes that were existing, the reasons why no one else is doing it, the reason why folks were having such a problem getting started. So we kind of built this basically a transaction engine in the middle of all of it, and kind of started looking at all the business rules and all of the steps that were needed and just kind of just kept building as building blocks. And building out this this engine first as an API with all the business rules inside it. And then at that point, we're able to go and say, Okay, now we have this engine with these business rules, how do we repurpose all those business rules for an end user, for someone that's a mobile user, for someone that is an administrator of an account. And we just started building around the engine, sort of like as Breen in the middle of all of this. And, and then that, you know, then we added modules into it. So we added AI modules to help predict some of the trends and some of and some of the outcomes that the our customers were looking for. And that was a piece in there. And then there was the blockchain to go and provide some of the authenticity of these actual products, where they're coming from, who touched them, who worked with them, and what we were doing with them. That was another module inside there. So we keep building this out. And everything is connected. As just as our ecosystem as our customers around the world. They're all connected with this engine in the middle of all of it that we just keep building on.

Stephanie Benedetto:

And the magic of what Phil has built really, I mean, it's fascinating because in so many ways, the fashion industry and a lot of industries and their supply chains are still doing things the way my great grandfather did in 1896, right with good old pen and paper and maybe some Excel spreadsheets with handwritten notes on them right. And when you're managing very complex supply chains across the globe With that tier one to a tier 14 supplier, it's very hard to have a real time understanding of what's going on. Right. And so I think that's where, especially in the fashion industry, there's been a huge opportunity with what we're going through right now in the world, for people to analyze where the breaks in my supply chain, where are the challenges? And where are the opportunities to centralize information, to digitize information, and to do better write better economically and better for people and planet. And that's really been, I think, our opportunity and our entree point and the way that the solution works, you actually, as an enterprise customer, you don't need to worry about the technology, right? That's our job. That's where we come in. It's true technology partners, to support them. But what we do want to understand for our enterprise customers is where are your pain points? Where are your challenges? What are your KPIs as a business and for your sustainability initiatives? And I think for so long with that s word sustainability, right, it means so many things to so many people. And there's been this lack, I think of understanding because of that, that this isn't just about people on planet, this is about true economic sustainability and profit as well. And so framing it that way and saving our enterprise customers, so much valuable time and resources while also doing good. I think at that point, you've got that win win win. Right? And how do you say no to that?

Tom Raftery:

Yeah, I mean, we had a little bit of discussion around this before turning on the recorder, the whole idea of reducing waste, you know, it has to mean that you're reducing your costs. And it's hugely important, obviously, to be sustainable and save the planet. And that's great. But if it's costing you money to do that, then it's less likely that you'll want to do it. But if you can do that, and have it save you money as well, then you're far more likely to not just want to do it, but to keep on doing it to your point about it being sustainable, in that sense of the word sustainability.

Stephanie Benedetto:

And let me throw some crazy figures out there to frame that as well, for one of our largest enterprise customers who's a world leader in in footwear, retail and apparel. By finding this waste and unused inventory, they realize that for every dollar of unused product, in the US alone, they were spending up to another dollar 40 on warehousing costs. And these costs just accumulate and accumulate. So by finding and selling this waste, they can recoup up to 15% of their bottom line in just one year. And so that obviously drives the bottom line. But the coolest thing is that it also drove their top line by sharing the actions that they were taking doing collections out of deadstock. And telling that sustainable story here, you know, world, here's the amount of water and toxins and carbon emissions we've saved. They actually saw three times the conversion rate in their online direct to consumer business, just by talking about it. And then you're driving top line, right. And those numbers yeah, that is powerful.

Tom Raftery:

So that I mean that that's phenomenal. But and just by looking at me, you can you can tell Stephanie I know absolutely nothing about the fashion world. But one thing we do know about the fashion world is it's notoriously fickle, and we hear about this falls colors, and next and last season's colors. So if you are going back through inventory that you have if it if it's from last season, and we've moved on to a new color, how does that work?

Stephanie Benedetto:

Yeah, I mean, that's exactly why we've built what we've built, right? Because you're able to, for the first time, take this dark data and know what you got, where it's sitting, what color it is, what was it made up? Where did it come from? And who does it go to, you can now know at your fingertips digitally in the palm of your hand all that information and take that action. If you decide something does change a business need does change. That's fine, because one person's waste is another person's treasure. And the fascinating thing that we have seen Since launching our platform is that yes, of course the world's largest brands and retailers from fast fashion to luxury are selling on our platform, but they're also turning around and buying. And that's really unique and interesting, right? Because I think getting quick and easy access to these materials at their fingertips away from areas that were impacted by disruption all at a discount while getting a sustainable story to tell. That becomes a great buying opportunity for them to and that's really I think, where we've nurtured and grown our ecosystem. I also wanted to take a second and share that this isn't just fashion, although fashion is right now a big focus of ours and he Huge consumer of textiles globally. But think about it textiles touch everyone everywhere in the world every single day. It is your clothing, but it's also the material on your chair right now the inside of your car, the carpet literally under your feet. And so what other industries can benefit from this kind of a solution to right, we can sell these unused materials into automotive, aviation, computer electronics. And I think that too, when you can take these kinds of circular economy solutions, cross industries and around the world opens doors and connections that were never possible before. And that's where we're going.

Tom Raftery:

Wow, fascinating. And I mean, you've talked about, you know, solutions for enterprise, does that mean I would have to be a large business to work with Queen of Raw?

Stephanie Benedetto:

No, we we are all about being open and accessible. And that is exactly what Queen of Raw dot com was built for. Anyone can participate at any size. And we sell yardage of fabric and textiles from one yard to hundreds of 1000s and millions of yards. So depending on who you are, if you're either an A student, a maker, a crafter, a quilter, an independent designer, a smaller brand, you can go to queenofraw.com and buy and sell today. What for the larger companies, that's where we have our white glove service, our software and do a lot more of the hand holding because to what we were talking about earlier, right. Sustainability also has been seen, I think for so long as just pilot projects, small little collections, right? This is for sampling and prototyping. I don't think that businesses realize how big of an opportunity this is until now and that this can be done automated and at scale and that software,

Tom Raftery:

Okay, there Phil?

Phil Derasmo:

sorry.

Tom Raftery:

No worries, no worries. Something else I want to ask you guys is there's been a huge upsurge in the last, you know, at least 12 months, if not I, you know, I want to say four or five years, maybe even longer in interest in sustainability. But is this and this is obviously hugely to your benefit, both in terms of your customers and their customers, to your point about that brand that had I forget how much of an increase they had in their sales of off the back of you being able to talk about it. But is that? Is that in itself sustainable as in? Is this interest in sustainability? is a just a fad? You know, the way things come in and out of Vogue? Or is it something that's here to stay? What do you think? Well, I have my own opinions on it. But I'd be curious to hear what you think.

Stephanie Benedetto:

Without question. I think this is not just a fad, this is here to stay. And I'll be really excited when we can stop needing to use the S word sustainability, because it's just the way good business is done. And my preference is to talk about things in terms of circular economy. The second word is economy. It's an economic principle, the longer you keep things in circulation and use, right, the more value and economics get derived from it, the better it is for all parties involved. That is just good, smart, efficient business. I mean, that's, you know, at its core, what right as if key technologies were built to do to run better, faster and smarter. And I think circular economy truly drives that. And if any good can come out of the world right now, I think it is this consciousness and that we've woken up to what matters, what is important, what kind of a future we want to build. And I think the future supply chain truly across industries, is going to be one that is more on demand more local and more sustainable. Because it makes economic sense. It's efficient, it saves time and resources and drives value for end consumers. But I you know, I'm excited. I think the future is really bright. And I hope people know that they can just take action and start today. I think the challenge for a lot of companies is they make these incredible commitments to be 100% circular and sustainable by 2025 or 2030. Right. And that's awesome. They're putting a stake into the ground as to where the world is going and what they believe in. But they often don't know where to go and what to do on day one. And that's especially a challenge when the laws are changing around the world right recycling laws EPR policies, terrorists, trade wars Coronavirus, this has an economic impact on them and illegal impact on them now, but where do you go? What do you do on day one, and that's something Phil and I spend a lot of time talking about, because we give large companies a place to start today. A place to find what's unused and wasted in your supply chain, make money selling it while also doing good and having a good story to tell. And then take the money you've made and put it back into doing other good work in your supply chain without your own capex expenditure increases, you can pay workers more, you can use more innovative sustainable materials, you can adopt new technology solutions, right? And just grow up and down the chain from there. Because the goal of end to end automation and 100% traceable supply chain is obviously a great future goal. But we have to know where to start today and take action and do it in a good way,

Tom Raftery:

lovely, lovely.

Phil Derasmo:

And Tom, I think it's sort of a situation too where that kind of like the genie is now out of the bottle. And folks see what sustainability can do for them, not just from a marketing perspective, but from as Stephanie mentioned, very in details, that it's a good business decision. And it at this point, it starts becoming part of the way we do business. And if you look at any other trends in the past, you know, even something you know, as as behind the scenes is like data security, you put you start baking that kind of thing into the system. So you baked in the way you do business, so your end users, so people that are working with the technology that are working with the business processes every day, don't have to think so much about it. But the problem keeps growing and growing and growing. And there's not much you can do about that growing, but you can maintain and sustain as much as you can. The the level of growth. And we mentioned earlier at the beginning of the podcast, the problem that started off as $120 billion year problem, even with folks paying attention to it has more than doubled, and it will continue to grow. And the best we can do is try to maintain and do as well as we could, and seeing the opportunities there now from a business perspective really helps out. And it's definitely here instead. Okay, super, super.

Tom Raftery:

Okay, Phil, Stephanie, we're coming towards the end of the podcast. Now. Is there any question that I have not asked that you wish I had? Or is there any topic we've not addressed that you think it's important for people to think about?

Stephanie Benedetto:

I think one of the most important things that we did it as a business that has really served us well, and I want to encourage others is to develop strong collaborations and partnerships. It's why we're here today, right? Because we have an incredible partnership, integration and collaboration with SAP. But, but that's just one of many that we have really spent time nurturing because it is so valuable to us as a business, but also to our customers into the future. And what's been really interesting to see about these partnerships with people like MIT, the United Nations, and more, and even New York City Government, has been in how it's actually allowed us to stand apart from the rest. There's this interesting book, if anyone wants to look at how transforming markets are taking place around the world right now, especially around sustainability. There's a book called transformative markets written by a friend named Robert lukey. And he actually ran an algorithm at Georgetown of all these news articles and social media posts starting in 2018, about these markets that are creating sustainable goods and services. And he ranked them on a trust score. And we actually ended up being some of the leaders above Coca Cola and Amazon and Google and others. And what I take away as a learning for anyone out there thinking about sustainability in the businesses that they're building, or working in, is that the reason we scored so high was because we use strong and distinct language in how we talked about creative role, its purpose, its outcomes, the measurements of water, and toxins and carbon emissions we've saved. It talked about our incredible partners and collaborators. And we were always appearing in conversations and in the news. And so you know, if you are out there and doing good work, I just want to encourage you to find great partners and to talk about it. Don't be afraid to speak about it, because that is how we're going to connect the dots, learn from each other and build these massively powerful businesses that will go change the world.

Tom Raftery:

Super. Before we finish up, there's something I gotta ask you. Where does the name Queen of Raw come from? There's got to be a story there.

Stephanie Benedetto:

We love this question. No, you know, it was the first name I ever thought of my family. I come from a family that was a predominantly female household. I went to an all women's school for 14 years. And my family jokingly called me the queen and we wanted to empower other people to feel like the kings and queens and take control of their domains, right. And Queen of rock because obviously, this is raw materials. And I thought more than the word sustainable getting back to what's raw and added essence really matters. And, you know, we It was the first thing I thought of and a lot of people didn't like it. They said it was either pornography or the raw foods movement. We tried a lot of different names until like, we kept coming back to it. It was available on social media and as a.com which was a big plus. And you know, something about it resonated and felt empowering, and it stood out and so I said, You know what? The raw foods movement sells sex sells. We trusted our gut we knew in Florida it's a name you will forget. And it has served us well ever since.

Tom Raftery:

Superb, superb no it's great. No, I love it. I love it. so delighted great to hear the backstory. Okay, Stephanie, Phil, if people want to know more about yourselves, or about Queen of Raw, or about any of the things we discussed on the podcast today, where would you have me direct them?

Stephanie Benedetto:

Yep, you can feel free to reach out to us I I'm at Stephanie, at Queen of Raw dot com, and Phil's at Phil at Queen of Raw.com. You can go to Queen of Raw.com and go through the contact button. Or I actually give out my cell phone because we want to hear from you. I'm at 203-981-6993 please reach out this is about supporting and helping each other and driving this change for the future for all of us.

Tom Raftery:

Amazing. Amazing. Great. Stephanie. Phil, thank you so much for coming on the podcast today.

Stephanie Benedetto:

Thank you for having us. Great to be here and for all the partnership and support SAP.

Phil Derasmo:

thanks for having us.

Tom Raftery:

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chains, head on over to sa p.com slash digital supply chain or, or simply drop me an email to Tom raftery@sap.com. If you'd like to show, please don't forget to subscribe to it and your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.