{"id":25400,"date":"2022-02-07T23:17:23","date_gmt":"2022-02-07T23:17:23","guid":{"rendered":"https:\/\/www.parcelpending.com\/blog\/what-is-recommerce\/"},"modified":"2023-03-31T16:47:29","modified_gmt":"2023-03-31T16:47:29","slug":"what-is-recommerce","status":"publish","type":"post","link":"https:\/\/www.parcelpending.com\/en-ca\/blog\/what-is-recommerce\/","title":{"rendered":"What is Recommerce and How Does it Work?"},"content":{"rendered":"

The new term on every major <\/span>retailer<\/span>\u2019s lips is <\/span>recommerce<\/span>. This blog takes a deep dive into what <\/span>recommerce<\/span> is, how it works, why it\u2019s so popular, and why retailers are jumping into this <\/span>resale<\/span> pool.\u00a0<\/span><\/p>\n

Recommerce Defined<\/strong><\/h2>\n

Whether it\u2019s labeled<\/span> as<\/span> recommerce<\/span>, <\/span>secondhand<\/span>, used, <\/span>pre-owned<\/span>, <\/span>resale<\/span>, vintage, antique, or the circular market, the definition is simply a new digital marketplace whereby <\/span>pre-owned merchandise goods<\/span> are being resold.<\/span><\/p>\n

The Reasons Why Recommerce is Exploding<\/strong><\/h2>\n

The <\/span>explosive growth of<\/span> growing demand<\/span> in<\/span> the <\/span>resale market<\/span> is causing a head whip effect by retailers. Estimates are that the <\/span>resale market<\/span> is projected to double in the next five years<\/span>,<\/span> reaching $77 billion<\/span>,<\/span> and<\/span> will grow at 11 times the rate of <\/span>traditional retail<\/span>1,2<\/sup><\/span>.<\/span><\/p>\n

A number of<\/span> Several <\/span>converging factors are causing the growth in reselling<\/span>,<\/span> including:<\/span><\/p>\n

A Focus on the Environment<\/strong><\/h3>\n

Sustainability<\/span> has risen to a top concern for consumers<\/span>, especially <\/span>younger consumers<\/span>. One in three consumers care more about wearing sustainable apparel than pre-pandemic<\/span>,<\/span> and <\/span>45% of millennials and Gen Z refuse to purchase from brands and retailers that are not sustainable<\/span>3<\/sup><\/span>. Over 17 million tons of textiles and used clothing end up in landfills annually.<\/span><\/p>\n

New Minimalist Mindset<\/strong><\/h3>\n

With so many <\/span>retail<\/span> and entertainment outlets closed during the pandemic, consumers took a fresh look at their buying habits. <\/span>In a<\/span>n<\/span> L.E.K. Consulting survey, 57% said that COVID-19 helped them realize that some of their pre-pandemic discretionary spending was unnecessary<\/span>4<\/sup><\/span>. As one <\/span>consumer<\/span> explains in a report by thredUP: \u201cSociety places value on having the latest styles over <\/span>sustainability<\/span>. One day, I looked at my closet and realized it was filled with disposable pieces I didn\u2019t love, so I decided to change the way I shop. My solution was to start buying quality <\/span>secondhand<\/span> pieces over <\/span>fast fashion<\/span>. It turns out great style doesn\u2019t have to cost a pretty penny.\u201d<\/span><\/p>\n

A Shift in Perception & Supply Chain Crisis<\/strong><\/h3>\n

The current supply chain <\/span>disruptions <\/span>crises<\/span> have forced many consumers to reconsider <\/span>pre owned goods<\/span> as a viable alternative to long waiting periods for new products. The frenzy in home remodeling coupled with pandemic relocation, for example, caused a run-up in <\/span>used item<\/span> prices in the furniture market for everything from end tables to antiques to sofas. Chairish\u2019s<\/span> business in 2021 was up 42 percent compared with 2020<\/span>5<\/sup><\/span>. In 2021, Kaiyo had five times the revenue it had in 2019. Searches for vintage or antique couches on Etsy increased by 126 percent in 2021 compared with 2019.<\/span><\/p>\n

Inflationary Concerns<\/strong><\/h3>\n

United States inflation jumped to a four-decade high of 7.5% annual rate causing pricing panic among consumers<\/span>6<\/sup><\/span>. Buying <\/span>secondhand goods<\/span> is a fraction of the cost of new.<\/span><\/p>\n

Why Retailers are Jumping into Recommerce<\/strong><\/h2>\n

In 1995, both eBay and Craigslist were founded and are considered the first wave of the <\/span>resale market<\/span>. The <\/span>second<\/span> wave included <\/span>contactless retail <\/span><\/a>direct-to-consumer apps with <\/span>leading brands<\/span> such as thredUP, Poshmark, and Depop. We are now entering a new wave whereby brands themselves create their own used marketplace. These brands include Lululemon, <\/span>Eileen Fisher<\/span>, Nike, REI, Patagonia, and John Fluevog (the Fluemarket).<\/span><\/p>\n

Retailers are jumping into the <\/span>recommerce market<\/span> for very compelling reasons as it:<\/span><\/p>\n

#1 Brings in New Customers<\/strong><\/h3>\n

50% of <\/span>secondhand<\/span> shoppers tried a new <\/span>brand<\/span>7<\/sup><\/span>. In other words, <\/span>recommerce<\/span> works as a gateway to the <\/span>brand<\/span> at a much lower price with the hope of eventually turning them into a direct shopper.<\/span><\/p>\n

#2 Unlocks Customer Data & Insight<\/strong><\/h3>\n

One of the key powers today is owning <\/span>customer<\/span> data. With recent privacy changes by Apple, Android, and Facebook, first-party data is critical; it allows retailers to see emerging trends and make actionable changes.<\/span><\/p>\n

#3 Boosts Brand Value<\/strong><\/h3>\n

62% of consumers<\/span> said that they\u2019d purchase more from a <\/span>brand<\/span> that officially partners with a <\/span>resale<\/span> platform or company. It\u2019s no wonder then that Macy\u2019s joined forces with ThredUp to place mini<\/span>–<\/span>stores inside of the department store behemoth, part of their efforts to improve their in-store shopping experience. Joint venturing has a co-branding advantage as it increases the reputation of both the <\/span>resale<\/span> brand<\/span> and the <\/span>retail<\/span> partner.<\/span><\/p>\n

#4 Provides an Outlet to Unload Extra Stock<\/strong><\/h3>\n

By using a <\/span>resale<\/span> platform, retailers are able to easily set up a <\/span>resale market<\/span> without the cost and hassle of creating their own. At the same time, retailers can unload out-of-season merchandise, poor performers, and what the industry itself calls \u201cdead stock.\u201d<\/span><\/p>\n

#5 Retains the Brand Image<\/strong><\/h3>\n

Retailers who use their own marketplace to sell <\/span>products<\/span> that might otherwise go to liquidators and off-price resellers do so without tarnishing their <\/span>brand<\/span> image. It also prevents these retailers from having to have huge online sales and drastic price reductions.<\/span><\/p>\n

#6 Reduces Waste<\/strong><\/h3>\n

Here\u2019s a whopper of a statistic: according to a recent report, \u201cevery percentage point increase in the <\/span>circular economy<\/span> market \u2013 including renting, reselling, repairing, refurbishing \u2013 could save 13 million tons of CO2 equivalent. This model is expected to reduce the <\/span>fashion<\/span> industry\u2019s emissions by 13 million tons of CO2 equivalent by 2030, which accounts for 8.5 percent of the total global emissions reduction planned\u201d<\/span>8<\/sup><\/span>.<\/span><\/p>\n

#7 Increases Revenue<\/strong><\/h3>\n

When retailers themselves set up a used marketing platform, they generate revenue that otherwise would go to an outside reseller. Even Rent the Runway started its own <\/span>resale<\/span> site selling luxury items that were previously leaking sales to Poshmark, TheRealReal, and others.<\/span><\/p>\n

Strategies for Creating a Successful Recommerce Platform<\/strong><\/h2>\n

Retailers can reap the rewards of an online <\/span>resale market<\/span> by following these guidelines:<\/span><\/p>\n

#1 Make it Easy for Customers<\/strong><\/h3>\n

One of the secrets to success for thredUP was its easy sign-up page and pre-paid shipping bag. Keep your required elements minimal.<\/span><\/p>\n

#2 Embrace Smart Lockers as a Drop Off Location<\/strong><\/h3>\n

Consumers flocked to contact-free solutions, like Buy Online, Pick-up in Locker (BOPIL\u00ae) during the pandemic, recognizing the ease and convenience of picking up and returning without waiting in line or waiting for assistance. Retailers can consider leveraging these smart pick up and drop off lockers<\/a> as a distribution or return system.<\/span><\/p>\n

#3 Incorporate Digital Authentication<\/strong><\/h3>\n

Allow <\/span>consumer<\/span> resellers to authenticate their <\/span>pre-owned goods<\/span> via photos and technology. The goal is to avoid would-be sellers dropping off merchandise to resell only to discover that the <\/span>retailer<\/span> won\u2019t accept it.<\/span><\/p>\n

#4 Value In-Store Credit Higher than Cash<\/strong><\/h3>\n

To incentivize shoppers to spend the money they\u2019ve earned, make sure to offer at least a 10% bonus for using their earnings within your own branded environment.<\/span><\/p>\n

\n

The <\/span>recommerce market<\/span> is a high-stakes game-changer that works for consumers, shoppers, and the environment. To discover how you can leverage lockers to facilitate your <\/span>recommerce strategy<\/span>, contact a Parcel Pending <\/span>customer<\/span> representative today.<\/span><\/p>\n

Sources:<\/b><\/p>\n

    \n
  1. Sustainable Brands. <\/span>Report: Circular Apparel Market Projected to Reach $77B by 2026<\/span><\/i>. (2021, June 29). <\/span>https:\/\/sustainablebrands.com\/read\/waste-not\/report-circular-apparel-market-projected-to-reach-77b-by-2026<\/span><\/a>.<\/span><\/li>\n
  2. Pagano, Aubrey. Alpaca VC. <\/span>Field Study: The Rise of Recommerce<\/span><\/i>. (2021, July 15). <\/span>https:\/\/medium.com\/alpaca-vc\/field-study-the-rise-of-recommerce-32c78d08fe0e<\/span><\/a>.<\/span><\/li>\n
  3. thredUP. (2021). <\/span>2021 Resale Report <\/span><\/i>[Report]. Retrieved from: <\/span>https:\/\/www.thredup.com\/resale\/#resale-industry<\/span><\/a><\/li>\n
  4. McKone, D., Picciola, M., DeVestern, L., & McQueen G. L.E.K. Consulting. <\/span>Priority Reset: Post-COVID-19 Changes Are Around for the Long Haul<\/span><\/i>. (2021, June 30). <\/span>https:\/\/www.lek.com\/insights\/ar\/priority-reset-post-covid-19-changes-consumer-behaviors-are-around-long-haul<\/span><\/a>.<\/span><\/li>\n
  5. Koncius, Jura. The Washington Post. <\/span>Antique and vintage sales have soared, thanks to supply chain issues<\/span><\/i>. (2022, January 26). <\/span>https:\/\/www.washingtonpost.com\/home\/2022\/01\/26\/antiques-vintage-furniture-popular-during-pandemic\/<\/span><\/a>.<\/span><\/li>\n
  6. Guilford, Gwynn. The Wall Street Journal. <\/span>U.S. Inflation Rate Accelerates to a 40-Year High of 7.5%<\/span><\/i>. (2022, February 10). <\/span>https:\/\/www.wsj.com\/articles\/us-inflation-consumer-price-index-january-2022-11644452274<\/span><\/a>.<\/span><\/li>\n
  7. Willersdorf, S., Krueger, F., Estripeau, R., Gasc, M., & Mardon, C. Boston Consulting Group. <\/span>The Consumers Behind Fashion\u2019s Growing Secondhand Market<\/span><\/i>. (2020, October 20). <\/span>https:\/\/www.bcg.com\/publications\/2020\/consumer-segments-behind-growing-secondhand-fashion-market<\/span><\/a>.<\/span><\/li>\n
  8. Berg, A., Magnus, K., Granskog, A., & Lee, L. McKinsey & Company. (2021). <\/span>Fashion on climate<\/span><\/i> [Report]. Retrieved from: <\/span>https:\/\/www.mckinsey.com\/industries\/retail\/our-insights\/fashion-on-climate<\/span><\/a><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    The new term on every major retailer\u2019s lips is recommerce. This blog takes a deep dive into what recommerce is, how it works, why it\u2019s so popular, and why retailers are jumping into this resale pool.\u00a0 Recommerce Defined Whether it\u2019s labeled as recommerce, secondhand, used, pre-owned, resale, vintage, antique, or the circular market, the definition […]<\/p>\n","protected":false},"author":3,"featured_media":25401,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[323,324],"tags":[],"class_list":["post-25400","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog-en-ca","category-blog-retail-en-ca"],"acf":[],"yoast_head":"\nWhat Is Recommerce & How Does It Work? | Parcel Pending<\/title>\n<meta name=\"description\" content=\"Wondering why recommerce is trending? 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