Isn’t the goal of any retail business to sell as many things as possible? Why should a retailer care about recommerce?
Consumers will always want to buy new things, that is not going away. However, what is emerging in the next generations of consumers is a desire to consume more sustainably, and this consumer is demanding that brands and retailers offer circular shopping options. In fact, I will go as far as saying that retailers that don’t offer a circular option in the next decade or so will be at risk of irrelevance. Retail is all about the consumer and meeting them where they want to be met. Younger consumers are increasingly seeking recommerce buying options from brands and retailers, so to not care about it is quite risky in my opinion.
The secondhand apparel market in the US is expected to be $64 billion by 2024 and it is the segment of retail where consumers expect to shift most of their spending over the next 5 years. I spent some years working at Amazon as they were really ramping up their retail business and I see the shift to recommerce akin to the shift to ecommerce a couple decades ago. The brands that did not invest in ecommerce fell off the back, lost out to marketplaces like Amazon, and are either gone or still playing catch-up to be digitally relevant. The next big shift is to recommerce.
To this end, allowing third-party resellers to control a brand’s resale business and customer experience leaves money on the table and devalues the brand’s legacy and quality, all the while losing valuable data on the consumer and their journey.
Why would someone want to buy a used jacket or dress, even from a premium brand? What’s driving this next generation of customers to resale?
There are a number of reasons why recommerce is attracting consumers, especially younger generations. The reasons are all largely rooted around value and values. ‘Value’ meaning consumers will always want to buy premium brand products at more accessible prices. Resale allows premium brands to have an off-price channel, but offer it in an authentic, innovative and sustainable way. ‘Values’ meaning consumers are shopping more consciously. We know that sustainability is increasingly influencing consumers’ purchase decision making, with 64% of millennials and gen Z reporting that they are influenced by sustainability when making a purchase. Finally, as a consumer’s income and buying power grows, they may be more likely to trade-in old products and trade-up to first hand goods from the brands they previously bought via recommerce.
A thriving recommerce marketplace may also reduce barriers to purchase for firsthand luxury consumers, with 44% of luxury consumers considering the resale value of the goods they purchase when they buy – a figure that is even higher amongst Gen Z and millennials, at 57% and 50% respectively. Therefore, the prevalence of recommerce may be a win-win for all, acting as a stepping-stone for first-time luxury shoppers while also increasing willingness to purchase amongst current luxury consumers.
