The secondhand clothing market is booming, and AI is helping resellers sort, price, and sell used clothes faster than ever. But with millions of garments still ending up in landfills and deserts, can new tech actually cut fashion waste?
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00:00This is one of the world's biggest collections of used clothing.
00:07It essentially feels like you're in the matrix, but it's clothing.
00:11ThredUP, an online resale platform, has paid people to clean out their closets for over 15 years.
00:18The company sold nearly 17 million items last year.
00:22But that's just a tiny fraction of the global trade in secondhand apparel.
00:26The average life of a garment in an American closet now is only two and a half years.
00:32An old pair of jeans can travel thousands of miles from its original owner, changing hands several times.
00:39But eventually, most of this stuff ends up as trash.
00:44Around the world, a garbage truck's worth of clothing is dumped or burned every second.
00:51Demand for used clothing is growing.
00:54Platforms like ThredUP hope new tech will help keep more of it in closets and out of landfills.
01:00So how does this massive warehouse work?
01:04And where does unsold clothing actually end up?
01:11Anyone can ship used clothing to ThredUP.
01:14The company started out as a peer-to-peer business like Poshmark or eBay.
01:19But in 2011, it pivoted to handle the entire selling process, from listing to shipping.
01:24From Gap to Gucci, we really are willing to accept, process, list and sell all of it.
01:29Clothes arrive at the warehouse in what ThredUP calls clean-out kits.
01:33It's about the size of a laundry bag.
01:35They basically put all of the clothing that they're not wearing anymore in that bag and send it to one of our distribution centers.
01:43After opening up the clean-out kits, Erika Anderson's team weeds out anything dirty or ripped.
01:48Anything that's gross, to be honest.
01:50We love to check hot spots, you know, under the arms, crotches, all of that.
01:54Once an item passes inspection, the labels are tagged into ThredUP's network with help from AI.
02:00Dan DeMeyer oversees this process.
02:03There's a lot that AI can automate in terms of, you know, detecting color pigments, determining what a category is.
02:09We now even have the ability to automate measurement collection, which is something that's new for us towards the end of last year.
02:16The company also uses an algorithm that prices items based on size, quality and demand.
02:22We have this learning system where, like, this algorithm gets smarter and smarter as we scale, as we process and sell more items, to get better and better at the listing price.
02:31Next, everything gets tagged with a QR code.
02:35Then the garment takes a ride on a 100,000 square foot hanger system, which runs through the whole facility.
02:42ThredUP launched it in 2018, and it helped pull items five times faster.
02:47The next stop on the line is the photography department.
02:50This is also another automated station.
02:52The item rotates, and there's, like, cameras that are mounted all around it, taking photos.
02:57And not only do we have, like, the front, the back, and the side and the side, but we actually have 360 photography.
03:02Most items will spend one to two months in this warehouse before they're sold.
03:07When you see these carousels behind me spin, what they're doing is bringing items forward that customers have purchased.
03:13So our operators can then go through the carousel and find that item with speed and ease.
03:18Workers bring the purchased items down to pack stations and fold them up for shipping.
03:22The original owners get a cut of that sale.
03:26That can range from a few dollars to several hundred, depending on the brand.
03:31Our top-selling brands are Lululemon, Madewell, J.Crew, Ann Taylor Loft.
03:37The higher the listing price, the higher the percentage.
03:40ThredUP has a team of authenticators who verify luxury products from brands like Gucci, Hermes, and Givenchy.
03:49For now, it only sells used clothing for women and children.
03:53One of the challenges with men is they buy a lot less clothing.
03:56And when they buy it, they wear it for years and years and years.
03:59But in terms of being able to sell it online, it's a little fewer and far between what items would actually be in good enough shape to resell.
04:07In 2024, ThredUP introduced a suite of AI shopping tools, like this virtual stylist called StyleChat.
04:14If you type in retro style prints, you'll get outfit recommendations based on what's in stock.
04:20It's basically like a natural language, back and forth conversation you can have with ThredUP about what you're looking for.
04:27ThredUP also released an AI image search, where you can upload photos and have the AI look for similar items across the site.
04:34The company says people using this tool are 85% more likely to buy something because of the more tailored experience.
04:41It's estimated that over half of US consumers will use AI to shop online this year.
04:47But what happens to the items that ThredUP can't sell?
04:50The company told us it doesn't directly dispose of any clothing.
04:55Instead, it passes it along to aftermarket partners.
04:58That's where resellers like Steven Bethel come in.
05:03He founded Bank & Vogue in the early 90s to buy pre-owned clothes from thrift stores and charities that couldn't sell them.
05:09We just go around and pick up the beer cans at the end of the party.
05:13So the first thing is, we're not going to call it waste.
05:17You know, there's no such thing as waste in this world.
05:20He helps find international buyers for the estimated 780,000 metric tons of used clothing the US and Canada export every year.
05:29A typical thrift operator sells about 25% of what is donated.
05:33So 75% of it, they need to find a home for it.
05:36Typically, leftovers from places like Goodwill get squished into bales and end up in places like Gujarat, India,
05:42where Steven operates a sorting and recycling hub.
05:45We're taking existing garments that can't be resold and we're turning them into new and relevant items.
05:51We try to find the best value in the world for the clothing.
05:57Pakistan is one of the world's largest importers of used garments.
06:01The country has special economic zones dedicated to resorting these goods.
06:08Workers here sort 25 metric tons of used clothes every day into hundreds of categories.
06:14From tops and casual jeans to children's clothes and fitness gear, everything is sorted into its own category.
06:21Much of this is sold domestically in Pakistan.
06:23But the main job here is preparing garments for re-export.
06:27In those sorting houses, there's a triage that happens.
06:30And then there are specific containers made based on quality, based on condition that are then resold to relevant markets.
06:38And it's really important because there are some markets, for example, in Central America where they really like strappy dresses.
06:44But you can't sell strappy dresses in Jordan.
06:46Repackaged bales are often sent to places with low import taxes and large secondhand markets.
06:53Like Accra, Ghana.
06:55When we filmed there in 2022, it was home to one of the largest secondhand markets in Africa.
07:01Shipping containers filled with millions of garments arrived at Contamato Market every week.
07:07And this place employed thousands of people.
07:10You see the way I'm squeezing my face? The fire burns me.
07:25Vendors would bid on bales sight unseen, usually paying a few hundred dollars.
07:31Then they tried to turn a profit by selling what they found in the market.
07:35But vendors only sold about 60% of the goods that flowed through Contamato Market.
07:41The rest ended up in dumps or washed out to sea.
07:48Liz Ricketts runs a non-profit called the Orr Foundation, which supports people working in this market.
07:54What we believe is that what you're seeing is a sliver of what is actually lying on the ocean floor.
08:01Most of the clothes we wear today are made from synthetic fibers like polyester.
08:06In the environment, they break down into microplastics.
08:09And they're extremely flammable.
08:14In January 2025, much of the Contamato Market burned to the ground.
08:19Killing two people and impacting the livelihoods of 10,000 workers.
08:24Most of the market has now been rebuilt.
08:29Thousands of miles away in Chile, a special free trade zone allows merchants to import tons of used clothing
08:34without paying the usual taxes and fees.
08:38The country is the largest importer of used clothing in Latin America.
08:43About 130,000 tons of it arrive here every year.
08:47But the country imports more clothing than it can handle.
08:52So much comes from the United States that here used clothing is often referred to as ropa americana, American clothing.
09:00Most of these garments are poor quality and hard to sell.
09:04So local vendors have been dumping unsold clothing in the Atacama Desert for over 20 years.
09:10It's illegal, but authorities don't have enough resources to stop it.
09:15This pile in the Atacama Desert was once so big it could be seen from space.
09:21In June 2022, it caught fire and burned for two weeks.
09:30In recent years, there have been some technological innovations to handle clothing waste.
09:35Like textile to textile recycling.
09:37A process where used clothing can be transformed back into raw fibers and spun into new yarn.
09:42But collecting, sorting, and processing old clothes is complicated and difficult to scale.
09:49Today, less than 1% of old clothes are recycled into new garments.
09:55Shay Sethi founded his company AmberCycle in 2015 and developed a new chemical process for separating polyester from dyes and other fabrics and turning it into new material.
10:06The idea for AmberCycle is really just how do you take an old t-shirt and turn it into a new t-shirt instead of using natural resources.
10:13In 2020, a research institute in Hong Kong started experimenting with textile to textile recycling.
10:20It partnered with H&M to make this machine, which turns used clothes into new ones in about three days.
10:27But recycling a single garment this way still requires some virgin material.
10:32In Pakistan, one family-owned company took the idea of recycling clothes to a factory scale.
10:38Artistic Fabric Mills is one of the first companies in Pakistan to repurpose old cotton into new denim.
10:45But sales of cheaply made clothes continue to outpace efforts to deal with the waste they create.
10:52ThredUP is trying to do its part as well.
10:57The company accepts fast fashion items to save them from landfills.
11:02But unlike other garments, the original owners don't get a cut of the sale.
11:06And that is a nod to sort of not incentivizing them to keep shopping fast fashion.
11:12The government is putting pressure on brands, too.
11:15The US is closing a tax loophole that allowed brands like Shein and Timu to import ultra-cheap clothes duty-free.
11:23Countries including France have passed Extended Producer Responsibility Laws, or EPRs,
11:28which force clothing companies to fund recycling programs for the waste they create.
11:33Since it passed the law in 2008, France has seen a three-fold increase in the collection and recycling of used textiles.
11:40But in the US, California is the only state with a textile EPR law on the books.
11:49We are only going to get the brands to change the way in which they make clothes by legislating that there needs to be recycled content.
11:57Because we've seen over the last 30, 40 years that just letting people do what they want to do, letting companies do what they want to do,
12:04they answer to their shareholders first before they answer to the environment. And that's wrong.