Sid Lunawat, CEO of Hammoq, Explains How AI Powers Sustainable reCommerce

Sid Lunawat is co-founder and CEO of Hammoq, a company that automates the reCommerce process for returned item resale and used goods. Using artificial intelligence and machine learning, Hammoq is leveraging technology to reimagine reCommerce by digitizing resale goods and automating the online marketplace listing process. Following is our Q&A with him.

Grit Daily: What’s behind the “Hammoq” name?

Sid Lunawat: Traditionally, listing product on online marketplaces for resale has been a time-consuming and manual process. Hammoq has risen to enable this listing process through artificial intelligence (AI) and machine learning technology. This empowers resellers to scale faster and list products quicker. With simple photos, sellers can quickly and accurately automate the categorization of an item with descriptors such as color, style, pricing, and other attributes, so that they can list faster. The “Hammoq” name characterizes how participants in the reCommerce market can now kick back and relax, knowing the heavy lifting of product processing is not holding them back.

Grit Daily: The sale of secondhand goods online, particularly fashion, is red hot. What is driving this rapid growth?

Sid Lunawat: There are several factors driving the rapid growth of the secondhand eCommerce (often called reCommerce) market. First, there is an absolute abundance of secondhand marketplaces to sell these goods. In fact, thredUP reports that the U.S. secondhand market is expected to more than double by 2026, reaching $82 billion. Contributing to this is a wide range of online marketplace platforms ready to sell product and an increasing desire from consumers to opt for secondhand merchandise first before purchasing new. 62% of Gen Z and Millennials in particular report that they look for an item secondhand, before purchasing it new.

The consumer desire for sustainability is increasing this trend. Consider that the EPA reports that Americans generate 16 million tons of textile waste a year. Only 14.5% of that waste is recycled, while 18.7% is incinerated and 62.5% is sent to landfills. Purchasing secondhand can put a big dent in that waste.

Recently, inflation has also become a strong driving factor, pushing people to look for an extra income stream, such as selling secondhand online, or encouraging consumers to buy cheaper name brand items through secondhand marketplaces. All these factors have created a confluence of opportunity to drive the secondhand goods market. But the obstacle has been in the manual effort it can take to process and list products for sale. Now, with advances in AI and machine vision technology, technology enablement is elevating the pace and scale of secondhand merchandise available for sale. This is the apex of where Hammoq plays.

Grit Daily: What impact do returned goods have on global waste and what effect can reCommerce have on improving sustainability?  

Sid Lunawat: The fashion industry is responsible for more annual carbon emissions than all international flights and maritime shipping combined. If the industry maintains this momentum, we will see an increase of 50% of greenhouse gas emissions from clothing within the decade. This is because 57% of all discarded clothing ends up in landfills and incinerators, this doesn’t even include return waste. The numbers are incredibly overwhelming.

There’s no doubt that the secondhand trends are creating paths to solve some of these problems. This growing momentum was a driving force behind the founding of Hammoq. ReCommerce is making green, sustainable fashion more available. 45% of Gen Z and Millennials say they would rather shop with a brand that offers secondhand options as well as new clothing and 56% of consumers want brands to take more responsibility to fashion’s impact on the environment by reducing waste. There is more than just an ethical reason for reCommerce to improve their sustainability, there is a monetary one as well.

Grit Daily: Why aren’t more retailers or used goods resellers taking advantage of the secondhand resale opportunity? What’s standing in their way?

Sid Lunawat: Many retailers perceive that it is more expensive to remarket returns than to just toss them aside. This, along with the lack of technology in their wheelhouse, makes it difficult for them to take advantage of the resale opportunity. The processing, pricing and listing process is traditionally a manual and time consuming one. At Hammoq, we saw the issues, both with retailers and used goods resellers, and wanted to develop technology to help mitigate them, making it as easy as taking a picture of the item to create a listing.

For some retailers there has also been an old school of thought that by reselling returned or lightly used items their brand will become diluted by third-party resellers. But more forward-thinking brands are changing this thinking. Brands including Patagonia, Lululemon, REI and more are now finding that recirculating returned items actually increases their brand value and customer loyalty.

Grit Daily: What inspired you to apply AI technology to address this manual reCommerce listing problem?

Sid Lunawat: I remember the first fashion statistic that stuck with me, it was that 80 billion resalable items that hit the landfills every year. After further investigating the issue, I learned what an operational nightmare it was to process returns and handle the surplus of items. We wanted to bridge the gap by building an app, now known as Hammoq, along with supporting technology to specifically help the resale industry sell more and scale fast. I wanted to make a real tangible difference that could also be profitable for the organizations that took advantage of it.

Grit Daily: How does using AI and machine vision technology improve the used product listing process?

Sid Lunawat: Machine vision technology is what sets us apart from other SaaS platforms. It expedites the process far faster than our competitors. All you do is take a picture of a product and boom; you have all the information filled in for posting on multiple marketplace platforms. It accumulates an accurate and competitive price, the stats of the product, physical description, and just about anything else you would need at the click of a button.

Humans are the limiting factor in the reCommerce market. With AI-powered machine vision, resellers can process exponentially more goods per minute. Rather than looking at each item to determine what exactly it is, including its material, brand, color, gender and just basic overall condition, technology is being applied to automate this processing. In fact, what we’re finding is that through this technology we are actually now accelerating listings at a pace that is driving growth for marketplace platforms. By enhancing resellers’ ability to list product more quickly and seamlessly we are supporting the population of marketplaces faster. This will have a dramatic impact on the overall growth of the industry, for resellers and marketplaces alike, all with a huge benefit of bringing more secondhand product to the consumer and having a real and tangible impact on global sustainability.

Grit Daily: Are there other problems that face sellers starting their reCommerce business? How is Hammoq helping them?

Sid Lunawat: 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. Because they are used, they rarely have tags, dropping their retail price. Where we come in is with our AI technology. AI can quickly identify the item and its resale price in a way that used to be a purely manual effort. At Hammoq, we’re overcoming this obstacle with AI-powered machine vision technology. The result is enabling resellers to scale and sell more products, faster.

Grit Daily: What does it take to start a reCommerce business? Where should new sellers go to learn more?

Sid Lunawat: My friends and I joke around about learning more about anything on YouTube University. If someone is interested in starting up a reCommerce business, there is a plethora of information to help you get started on there.

But if new sellers are looking to learn more about how to truly start quickly or accelerate their business, Hammoq has exceptional resources available on the Hammoq blog. We are also equipped to help reseller businesses – no matter their size – set up for success during a brief discovery call where we talk through the business’ listing goals and target markets.

Grit Daily: How is reCommerce changing options for consumers? In what ways will this evolve over the next few years?

Sid Lunawat: ReCommerce is giving consumers a cheaper, easier, and more sustainable way to shop. After COVID we saw the amount of in person shoppers drastically decrease. Online shopping has only increased since then. ReCommerce gives consumers another, more sustainable and economical, option in online shopping.

This being said, 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, we can help by contributing a new, scalable process to place returned items back more rapidly 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. By using 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.

Peter Page is the Contributions Editor at Grit Daily. Formerly at Entrepreneur.com, he began his journalism career as a newspaper reporter long before print journalism had even heard of the internet, much less realized it would demolish the industry. The years he worked a police reporter are a big influence on his world view to this day. Page has some degree of expertise in environmental policy, the energy economy, ecosystem dynamics, the anthropology of urban gangs, the workings of civil and criminal courts, politics, the machinations of government, and the art of crystallizing thought in writing.