You’re a retail brand. Your clientele loves your designs. But no matter how good your estimation and stocking, you do occasionally overstock – and then you’re stuck with unsold merchandise. That is a major financial and operational liability, and in many cases, the stock is intentionally damaged and destroyed.
Instead, why not deprioritize wastage and prioritize thrift? By reselling unsold stock or facilitating the resale of pre-owned products, you encourage the practice of thrift and advance sustainability.
Gen Z shoppers deeply focus on the value of sustainability, with the majority being “willing to spend an additional 10% more for eco-friendly products. In fact, 3 out of 4 Gen Z consumers prioritize sustainability over brand name when it comes to making a purchase.”
The current wave of ‘re-commerce’ – secondhand resale – could be the answer. The market is projected to grow to 218 billion dollars in value by 2026.
Through re-commerce, you can sell your own unsold stock, or allow your customers to come back to you with their older pre-loved pieces and sell through your own online or physical channels.
Should you consider re-commerce?
Simply put, re-commerce involves selling pre-owned products. This could be peer-to-peer sales, or directly from the brand itself. Pre-owned products could be sold directly, or after refurbishment.
In addition to the call to reduce wastage and increase sustainability, the re-commerce wave has also been driven by the post-pandemic global supply chain issues, which have caused product shortages, stocking delays, unavailability and spiralling prices. During the 2021 holiday season, Adobe found that over 6 billion “out-of-stock” messages were sent out. This seriously increased demand for secondhand eCommerce, as ThredUp found – it “saw record growth in 2021 at 32%.”
While the most recent eBay Recommerce Report found that 75% of individual respondents from the US and Europe have recently begun to sell secondhand online via eBay, to establish an additional income stream, the co-founder of thredUp says that “brands and retailers are driving the next wave of second-hand. We’re still in the very beginning of this trend.”
How do brands engage in re-commerce activities?
Since sustainability is such a central value for Gen Z shoppers, it needs to be a central value for brands targeting this generation. They do not look for a superficial layer of values-based messaging; they are looking for real commitment, in terms of environmentally conscious actions and donations. You can make re-commerce central to your sustainability message by promoting the benefits of refurbishment rather than endless consumption.
Re-commerce could include the practice of selling unsold merchandise at knock-down prices via the brand’s own eCommerce website or a re-commerce digital marketplace. Brands can also empower their consumers by facilitating the sales of pre-owned branded products, with or without refurbishment, at physical or digital second-hand retail stores.
Many major retail and fashion brands have entered the re-commerce space in recent years, with “Hugo Boss, Ganni, Marks & Spencer, Lululemon and Pacsun, all announcing either the launch or expansion of their resale offerings in the last few months alone … Gucci is partnering with TheRealReal to recycle/upcycle garments, Richemont has acquired UK-based watch specialist Watchfinder, thereby gaining new distribution channels and becoming a retailer of rival brands, and Kering has invested in Vestiaire Collective, to enhance its customer experience and boost its sustainability efforts.”
ThredUp’s ‘Recommerce 100’ points to the fact that “amongst retail executives who currently offer resale, 88 per cent say it’s helping drive revenue. Interestingly, small brands are ‘demonstrating leadership in resale’, with 25 of the 41 brands identifying as small, private companies. The report also points out areas that brands could expand on, such as the number of listings.”
What are re-commerce digital marketplaces?
In 2021, sales on online marketplaces accounted for 67% of global eCommerce. It’s probably not surprising, therefore, that online marketplaces are becoming a key bridge between buyers and sellers for secondhand retail. By using a re-commerce digital marketplace, you can promote secondhand inventory on platforms that are already prepared for online selling, with a large volume of buyers already onboard.
Some prominent secondhand digital marketplaces include:
Why use a secondhand digital marketplace?
These marketplaces are already well-established, and buyers of secondhand products have already been onboarded on these sites. For smaller brands without an existing eCommerce presence, especially, these platforms offer features such as search customization and easy navigability that are essential to modern shopper’s UX expectations.
For example, consider thredUp, the first mover in the space. They sell pre-owned clothing via a professional eCommerce marketplace, with all the UX features that such a site is typically equipped with. This includes filters, sales, discounts, searchability, and extremely comprehensive navigation, as well as multiple checkout, delivery and online payment options.
By optimizing the site for mobile and keeping it updated on an ongoing basis, these online marketplaces are fully equipped to connect individual and institutional sellers with a large volume of interested and engaged buyers.
Digital marketplaces and omnichannel marketing
Many brands feel that by listing on an online marketplace they are devaluing their own eCommerce presence. Since the product is available on marketplaces such as Amazon, they worry that the importance of their own online store is diminished to the point of irrelevance. However, it’s a benefit in terms of customer acquisition and as part of the omnichannel approach.
Omnichannel marketing is “the integration and cooperation of the various channels organizations use to interact with consumers, with the goal of creating a consistent brand experience.“ In short, the multiple channels through which the brand interacts with its customer base should feed into each other and interact with each other to deliver a coherent message.
Through re-commerce, retail brands can expand the range of products being offered and add new points of engagement with the customer. Listing on these re-commerce marketplaces generates additional touchpoints through which to engage with customers and prospective customers. Consumers expect to see their favorite brands wherever they’re shopping, and it makes sense to improve brand visibility by being present on the platforms they’re already browsing.
The demand for used goods is based on a holistic trend towards sustainability, not just driven by the short-term supply chain shock. So how are you going to build pre-loved goods into your business plan? Is the online marketplace the right fit for you? Or will you be expanding your range of offerings on your existing eCommerce site? In many cases, the chances are a hybrid strategy would suit you best. Do reach out to our team to discuss how to move forward on your re-commerce venture.