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In 1995, the kids brand Hanna Andersson debuted matching family pajamas, kick-starting a trend. Three decades later, it’s become a tradition in many families to buy PJs emblazoned with reindeer or Christmas trees or menorahs to wear during the holidays. But if you’re concerned that seasonally specific sleepwear may not be so eco-friendlyafter all, how much use will your toddler get from those Santa Claus jammies?Hanna Andersson has a suggestion for you: Why not buy them secondhand? In 2023, Hanna Andersson launched Hanna-Me-Downs, a website for customers to buy and sell pre-owned products. If you scroll through the site, you’ll find thousands of gently used Hanna Andersson pajamas for the whole family, along with dresses, T-shirts, and trousers from previous seasons. Since the platform debuted, Hanna Andersson has become the top resold children’s brand in the U.S., selling more than 160,000 garments to 25,000 customers. And interest in Hanna-Me-Downs is only growing, with site visits increasing by 30% this year. Aimée Lapic, who became the brand’s CEO in 2022, helped launch Hanna-Me-Downs and believes it has been one reason behind the brand’s growth in recent years. (Since Hanna Andersson is a private company owned by the private equity firm L Catterton, it does not share its revenue, but says it has experienced double-digit growth since 2019, and even higher levels of profitability.) Other factors include its decision, in 2020, to shutter all 65 of its brick-and-mortar stores to become a purely digital direct-to-consumer retailer, and its launch, in 2023, of a rewards program that now has more than a million members. While it might seem counterintuitive for a resale site to accelerate Hanna Andersson’s growthsince it might cannibalize the brand’s sale of new clothingLapic says the opposite is true. While the platform itself does not generate a profit, she believes it has brought new customers to the brand, also reinforcing the message that its products are made to last. “Circularity benefits us from a business perspective,” Lapic says. “It’s a real solid proof point that we sell high-quality, durable clothing.” [Photo: Hanna Andersson] Shopping for Kids in the Era of Fast Fashion Many parents find it hard to shop sustainably for their kids. Children grow out of their clothes quickly and ruin outfits with stains and tears. In the era of fast fashion, budget retailers like Carter’s and Target market children’s clothes that are so inexpensive, parents don’t mind if they only last a few weeks or months before throwing them out. So it might not seem worth it to spend more on durable clothes that are more expensive. Four more than 40 yearsas fast fashion has taken offHanna Andersson has tried to make the case that it is worth spending more on high-quality kids’ clothes. Its dresses start at $50, and T-shirts start at $30. Carter’s sells those products for as low as $15 and $5, respectively. This focus on quality goes all the way back to the brand’s origins. Hanna Andersson was founded by Gun Denhart, a Swede who had settled in Portland, Oregon. She wanted to create clothing that would allow kids to play in the rainy, muddy conditions that were common in the Pacific Northwest. Today, the company continues to focus on quality, thanks to rigorous durability standards. In testing, each garment is washed between 60 and 100 times to ensure the fabric won’t wear out or fade. Over the years, the company has introduced new eco-friendly fabrics such as certified organic cotton, Oeko-Tex fabrics that are certified to be free from harmful chemicals; and its newest material, HannaSoft, which is made of bamboo. In each case, it puts the new materials through durability tests. Hanna Andersson has attracted a wide range of customers, Lapic says. Some are well-heeled parents who shop from other high-end children’s brands, like Petit Bateau or Janie and Jack. But others are middle-class families. “Not all of our customers are wealthy,” she says. “Some just buy fewer clothes than they would otherwise, and others buy secondhand.” For years, consumers have been shopping for used Hanna Andersson clothes on other brands’ secondhand sites. Lapic says that it made sense for the company to create its own platform so it could engage directly with these fans of the brand. “Our clothes were very popular on ThredUp and Poshmark,” Lapic says. “We thought we had an opportunity to keep these buyers and sellers within the Hanna Andersson ecosystem.” [Photo: Hanna Andersson] Resale as a Growth Engine Lapic says that the brand tries to give Hanna-Me-Downs customers good value for their old clothes. When they send in a used product, they can get 70% of the resale value in cash. If they choose to get store credit at the main Hanna Andersson website, they can get 100% of the resale value. Lapic says that 80% of sellers choose the store credit option. And the brand has found that when these customers use their credit to shop from the Hanna Andersson site, they spend two and a half times the amount on the gift card. Besides engaging people who are already big fans of the brand, Lapic says that it has also tapped into an entirely new customer base that has never shopped with Hanna Andersson before. This group is drawn to Hanna-Me-Downs’ lower prices, and 50% will return to the site to stock their kids closets with pre-owned Hanna Andersson clothes. “They end up buying from us multiple times,” she says. Ultimately, Lapic says that Hanna-Me-Downs illustrates that promoting sustainable behavior doesn’t have to come at the cost of profitability. The resale site keeps clothes circulating in the economy for longer, and reinforcesthe message that it is better to buy fewer, better-quality items. “We are excited about how this platform benefits our customers, the planet, and future generations,” Lapic says.
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E-Commerce
Below, co-authors Barry Schwartz and Richard Schuldenfrei share five key insights from their new book, Choose Wisely: Rationality, Ethics, and the Art of Decision-Making. Barry spent 45 years teaching psychology at Swarthmore College. Now he holds a visiting position at the Haas School of Business, University of California, Berkeley. Richard held a similarly long tenure at Swarthmore College, 42 years, as a philosophy professor. Whats the big idea? There is no such thing as a calculator for lifes decisions. Try as we might to quantify, count, and calculate in search of the right choice, that is simply not how wise decision-making happens. Qualitative judgment and consideration of preferences and values are required when identifying the best option before us. Listen to the audio version of this Book Biteread by Barrybelow, or in the Next Big Idea App. 1. Sorting through the possibilities Imagine waking up on a beautiful Saturday morning and asking yourself, What should I do today? You consider the possibilities: get some exercise, go for a hike, go to a lovely park with a serious book under your arm, catch up on work, veg out, and watch sports on television. Or maybe, instead of thinking about what you might do, think about what we might do. What social activities might you engage in? Get in touch with friends, visit your mother at the assisted living facility, or help your adult daughter pack for her apartment move. Lots of possibilities. Is there a right way to think through your options for the day? Is there a right way to choose which of these things to do? 2. Rational choice theory In economics, according to rational choice theory, there is a rational way to make decisions, which requires thinking about two things: How valuable are the options youre deciding between? How likely is it that the option you pick will be as good as you expect? We live in an uncertain world, and so you assess the value and probability of your options, then multiply them. What you get is expected utility. The rational choice should be the option that provides the greatest amount of expected utility. This framework analogizes the decisions we make in life to the decisions you might make in a gambling casino. Whats the best strategy in a blackjack hand? What are the odds and payoffs at the roulette table? In situations like this, it only matters how much you could possibly win and how likely you are to win. Rational choice theory suggests that we should think about most of our decisions in these terms. In figuring out how good it will be if I choose this option, and how likely it is to be that good, you must quantify the relevant information. Create a spreadsheet of all the factors that might matter in making a choice. List how good a particular option is with respect to all these factors, and enter a value for both how good it is and how probable it is. Fill out the spreadsheet with all the options, push a button that does the math, and youve made a rational decision. This framework analogizes the decisions we make in life to the decisions you might make in a gambling casino. Rational decisions are quantitative. You need to attach quantities and magnitudes to both the value of the options and the likelihood that you will achieve that value. Rational choice theory has nothing to tell us about what your preferences among options should be, what your values should be, or what set of options you should consider. In this economic framework, you have whatever values you have, your options are whatever options the world presents, you create the spreadsheet, do the math, and pick the best option. Thats the model of rational decision making. 3. Framing the options Do we behave as rational decision makers? Definitely not. About 50 years ago, psychologists Daniel Kahneman and Amos Tversky started studying how people make decisions. They did some beautiful and extremely important research, but unfortunately, Tversky died prematurely. Kahneman survived to win the Nobel Prize in Economics and published a book called Thinking Fast and Slow, which has been on the bestseller lists for almost 10 years. His work helped create the field of behavioral economics. Behavioral economics research has illustrated the ways in which people fail to meet the standards of rational choice theory. People are bad at thinking about probability. People are heavily influenced by the way in which options are framed. People divide their decisions into different accounts and often dont aggregate the potential consequences of those decisions into one big account. People are highly influenced by anchors. A $500 suit seems inexpensive on a rack full of $1000 suits but seems quite expensive on a rack of $200 suits. These aspects of decision-making get us to more or less the right place, but they can also lead us seriously astray. The way Kahneman came to regard human decision making is that there are two processes happening: Conscious process: Thinking through the pluses and minuses of various options when asking yourself what choice to make. This is effortful, slow, and demanding. Automatic process: This system delivers answers to you even before you frame the question. It is fast, efficient, and operating whether you want it to or not. These two systems interact, and sometimes the automatic system leads the more deliberate, rational system astray. Even if we end up making rational decisions, its not through the processes that rational choice theory tells us we should follow. 4. Not everything canor shouldbe calculated Rational choice theory is a terrible model of what it means to be a rational decision maker. Are most of our decisions really like casino gambles? Can everything that matters in a decision be quantified? Whats good about doing strenuous exercise on a hike? And whats good about helping your daughter pack? What is the common scale of value? Can everything that matters in a decision be quantified? If youre choosing a job, you might be interested in knowing the salary, benefits, who your colleagues will be, whether the work will be interesting, the location, opportunities for advancement, and other relevant details. Its preposterous to attach numbers to all those factors and then use those numbers in a spreadsheet to figure out which job is best for you. Similarly, if youre deciding where to go to college, you might be interested in quantifiable things like graduation rate and average salary after graduation, but what about the qualitative features of the education, social life, food, and housing? Can thes things be arrayed on a spreadsheet using a common scale for assigning value? When you follow rational choice theory, instead of thinking about decisions, you count. Calculation substitutes judgment. In some areas of life, that could be a good thing, but in many others, shutting down your ability to subjectively reflect will lead to worse, impoverished, pinched decisions. 5. A rational decision requires rational judgment Rational choice theory is dangerous as a normative standard. It narrows our thinking by encouraging us to invent quantifications of things that cant be quantified. During the Vietnam War, the U.S. government was facing pushback from citizens and wondering how to generate popular support for the war. It was concluded that if the public saw that the U.S. was winning, then more people would favor involvement. But it was a guerrilla war, so can someone know whos winning? It was decided to use body counts and casualties as an indicator. If the enemy had higher numbers of wounded or dead than our side, then we must be winning. This affected our fighting strategy. Instead of seeking strategic advantages, we made decisions designed to maximize casualties because it meant we could tell folks back home that the U.S. was winning the war. As a result, we didnt win the war, and thousands of people died needlessly. Rational deciding requires rational judgment and not just counting. You can see the danger of rational choice theory decisions, like where to go to college, too. People are heavily influenced by the ratings of U.S. News & World Report, so universities have learned how to game those ratings by making themselves look good with respect to the dimensions that U.S. News cares about. Does that make them better institutions? Maybe sometimes, but mostly it does not. Rational choice theory forces us to focus on things that can be easily compared and quantified while leaving out the rest. Rational deciding requires rational judgment and not just counting. We dont want our ability to think and judge rationally to atrophy because we think that the rational approach to decisions is essentially mechanical and algorithmic. Enjoy our full library of Book Bitesread by the authors!in the Next Big Idea App. This article originally appeared in Next Big Idea Club magazine and is reprinted with permission.
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Over the last five years, artificial intelligence has shifted from a fringe interest to one of the most important drivers of global economic growth. So important has the technology become that the United Nations Security Council held its first open debate on artificial intelligence last month. While little of substance was achieved, a General Assembly resolution authorizing the creation of an independent scientific panel on AI may have a more enduring impact. One of the core questions this panel will seek to answer is how AI can support sustainable economic development without entrenching inequality. The potential dangers here have deep historical parallels. AI runs on compute, cloud capacity, and dataresources that are concentrated in the hands of countries in the Global North. Africa, for example, hosts less than 1% of global data center capacity, leaving the continent reliant on expensive infrastructure abroad. Even an IT powerhouse like India hosts just 3% of global capacity, despite being home to nearly 20% of the worlds population. Meanwhile, workers across the Global South are earning as little as $2 an hour creating, cleaning, and labeling data for use in Western models. A new digital colonialism? To some, this looks like a digital version of the kind of resource extraction associated with the age of empires: labor and data flow inexorably north, where they create economic value, but little of this value finds its way back into the pockets of developing nations. {"blockType":"mv-promo-block","data":{"imageDesktopUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/10\/creator-faisalhoque.png","imageMobileUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/10\/faisal-hoque.png","eyebrow":"","headline":"Ready to thrive at the intersection of business, technology, and humanity?","dek":"Faisal Hoques books, podcast, and his companies give leaders the frameworks and platforms to align purpose, people, process, and techturning disruption into meaningful, lasting progress.","ctaText":"Learn More","ctaUrl":"https:\/\/faisalhoque.com","theme":{"bg":"#02263c","text":"#ffffff","eyebrow":"#9aa2aa","buttonBg":"#ffffff","buttonText":"#000000"},"imageDesktopId":91420512,"imageMobileId":91420514}} The reality is that these patterns are driven by market forces rather than imperial ideology, but the historical echoes are troubling nonetheless. Whatever the motivations, we know that this kind of concentration of power can do long-term economic and social damage. In some cases, the results are felt only in the underserved countries. AI systems trained to deliver healthcare to Western patients, for instance, can be dangerously inaccurate when working with other populations, limiting the transferability of the advances made in the West. Similarly, researchers at Columbia University have found that Large Language Models are less able to understand and represent the societal values of countries that have limited digital resources available in local languages. These limitations are just the tip of the iceberg. AI is not just a productivity toolits a force multiplier for innovation. It will shape how we farm, teach, heal, and govern in the future. If the Global South remains a passive consumer of imported AI systems, it risks losing not just economic opportunity but digital sovereignty. The Industrial Revolution brought extraordinary wealth to Europe and North America while locking much of the world into dependency for generations. AI could repeat that cyclemore rapidly and at an even greater scale. Why this should worry every global business The irony is that this approach hurts everyone, including the companies driving it. In terms of population, India has overtaken China while Nigeria and other African nations are enjoying booming birthrates. These countries represent tomorrows largest markets. Yet multinationals that treat them as data factories without trying to situate that data in its local context will find that they dont understand the customers they will desperately need tomorrow. A model that misunderstands how most of the world thinks about family, risk, or trust is a model doomed to fail. We have already seen how this trend can play out. The mobile money transfer company M-Pesa revolutionized banking in Kenya while Western banks were still trying to penetrate the market with credit cards. Today, Indian companies are developing chatbots that can speak to the hundreds of millions who communicate daily in so-called low resource languages. Unless multinationals begin to think intentionally about how they can serve these underserved populations, they will find themselves looking in from the outside once these markets mature. The path forward Avoiding the dangers of algorithmic colonialism and earning a position in emerging markets for AI products and services requires deliberate action from governments, businesses, and global institutions. Data centers, power supply, and research capacity should be financed like roads and ports, with blended capital from development banks and sovereign funds. Without local compute capacity, nations will inevitably remain digital renters, not owners. Governments should also establish data trusts to negotiate how their citizens information trains global models, including setting benefit-sharing and transparency requirements. AI annotation work should pay living wages with proper labor protections. And critically, we need investment in open-source models, multilingual datasets, and local developers, so solutions are built with communities, not just for them. Some companies are already changing course. They are investing in local infrastructure, creating genuine partnerships, and recognizing that sustainable profits come from creating value with communities, not extracting it from them. They understand that todays data creators and workers will be tomorrows consumers, and, potentially, tomorrows innovators as well, if they are given the chance. AI has the potential to be a great global equalizeror it could become the most powerful driver of inequality in human history. We have seen what happens when transformative technology is hoarded: inequality deepens, resentment grows, and instability follows. If we want to write a different storyone in which the Global North and South cocreate the future and share the benefits of artificial intelligencewe must act now, before the gap becomes unbridgeable. 4 things leaders can do today to start bridging the AI divide 1. Audit your AIs eographic blind spots today. Map where your training data comes from and which populations it represents. If more than 80% comes from Western sources, you run the risk of not being able to represent or communicate effectively with consumers from much of the world. Work to diversify your data if that is feasible, or develop localized AI systems that are trained or tuned with local data. 2. Create transparent data-sharing agreements. Develop a framework for using local data to train your models, including benefit-sharing provisions and audit rights for local data providers. Companies that move first will become preferred partners when governments start to mandate these arrangements. 3. Pay fair wages for AI workand let your target markets know you are putting your money where your mouth is. Commit to paying local sustainable living wages plus a mark-up for data annotation and AI training work. Make this commitment public. You will attract better talent, improve the quality of your data, and build brand equity in emerging markets. 4. Launch an open-source initiative in at least one emerging market. Pick a specific challenge in a growth markethealthcare in Nigeria, agriculture in India, education in Indonesiaand commit to building an open-source solution with local developers. The relationships and market intelligence you gain will be worth more than any proprietary advantage you might give up. {"blockType":"mv-promo-block","data":{"imageDesktopUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/10\/creator-faisalhoque.png","imageMobileUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/10\/faisal-hoque.png","eyebrow":"","headline":"Ready to thrive at the intersection of business, technology, and humanity?","dek":"Faisal Hoques books, podcast, and his companies give leaders the frameworks and platforms to align purpose, people, process, and techturning disruption into meaningful, lasting progress.","ctaText":"Learn More","ctaUrl":"https:\/\/faisalhoque.com","theme":{"bg":"#02263c","text":"#ffffff","eyebrow":"#9aa2aa","buttonBg":"#ffffff","buttonText":"#000000"},"imageDesktopId":91420512,"imageMobileId":91420514}}
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