Recommerce; Deconstructing the Reselling Phenomenon in eCommerce

Recommerce, or Reverse Commerce, is the growing practise of selling previously owned items.

Although traditional thrifting and donation/secondhand stores are not a new concept, online resale is predicted to overtake the traditional thrift and donation segment by 2024, with the secondhand market set to hit $64B in the next 5 years.*

There are different variations of ‘Recommerce’, from the traditionally financial/sales based transaction, to the more ‘Solidarity Recommerce’ solutions where the residual value is donated to charity or ‘Ecological Recommerce’ where the end goal is recycling or proper disposal of products with a high polluting capacity. 

In all aspects the principle is the same- there is an environmental impact to everything we buy yet in most cases there is a residual value that isn’t always explored before products end up as landfill.

Businesses like eBay, Craiglist & Gumtree have been working on this principle for years, facilitating and providing a ‘controlled’ route for consumers to resell second hand goods online.

Traditionally technology based companies have focussed on recycling/repair, largely in part due to stricter WEEE regulations, in both 2014 and a widening of the restrictions in 2019.

However, in the last few years there has been a real focus in the fashion industry, on new Recommerce solutions, likely stemming from a surge of negative press regarding its considerable environmental impact.

Why is it growing?

The popularity of Recommerce is largely due to the changing consumer consciousness regarding ethical and environmental responsibility.

Eco conscious consumers, particularly Gen Z’s and Millenials, not only have and know their purchasing power, but they proactively want to reduce their environmental footprint. 

It has largely been reported that the natural resources consumed during the manufacturer and first transport of a product is at its highest in the whole product lifecycle, and major brands have seen a real focus on their wastefulness being scrutinized in the media.

This focus on the circular process, and the sustainability of products, is not the only driver though. With restrictions in 2020 meaning people are spending more time in their homes, 

the growth of ‘home organiser’ influencers has spawned the space saving ‘quarantine clean outs’. Whether through an increased financial incentive to sell, or a desire for saving money on a purchase 88% of consumers adopted a new thrifty hobby during Covid that they plan to continue*

In tandem with this, the ease of the facilitation for Recommerce through mobile apps, personal shipping solutions and the plethora of prebuilt marketplaces continues to grow.

And it’s not just ‘buying and selling second hand products that has seen an increase online, as consumers value experiences over ownership, renting services such as ‘Rent The Runway’, that allows you to ‘hire’ the designer goods you want to use,rather than owning them, have also thrived. 

It’s not just the reselling platforms that are thriving. Other industries are pivoting to accommodate the desire to maximise the resale value of an item. Specialist repair and restoration services are now a key part of the journey, from at home solutions such as Sneaker ER’s Midsole Marker Pens, to the chain of ‘Handbag clinics’ spread across the UK solely focussed on restoring designer bags.

The growth of Recommerce services, also facilitates the growth of ‘professional resellers’, or ‘plugs’ in the sneaker world, who use the solutions to make a living by sourcing rare products and reselling them for a premium. 

So why should brands encourage Recommerce? 

Recommerce can add an invaluable retention strategy to the traditional customer lifecycle. When managed and facilitated by the brand and marketed to their own audiences, campaigns such as buybacks, part exchanges and recycle incentives can significantly contribute to overall profitability while enhancing the core brand values.  

There are also some really clear laws and regulations regarding waste that must be adhered to by brands and these campaigns can support this. 

For many high end fashion brands, Recommerce can offer a unique way for high end products to go to get in the hands of a wider audience, but for some brands this can bring its own concerns.

Traditionally small, limited run products are often sold for multiple times the original sale value on resellers sites. This can be great for building ‘hype’ around a brand but means the brands themselves often don’t see the highest possible profits from the item. 

Often Recommerce can facilitate a broader global spread than the brand themselves can facilitate with their own shipping methods, but it can mean in certain instances, the initial sales predominantly go to Professional Resellers/Plugs. 

Brands need to consider how they too can ‘own this’ sale. Whether partnering with Recommerce solutions, or ‘individual influencers’ such as ‘Bootleggers’ who add value to their brand by repurposing products.

What if we want to start our own Recommerce solution?

There are a number of nuances that come with managing ‘Recommerce’ yourselves as a brand or retailer in addition to traditional eCommerce considerations...for example...

Logistics- how are the products going to be shipped-do they get picked up from the customers home or are they expected to facilitate the return or resale themselves? For more technical products, is their a requirement to only ship in the original packaging? 

How sustainable is your packaging, would it survive being shipped multiple times?

Categories/Descriptions- If I’m going to start selling secondhand versions of my products online how do I differentiate them from the new products. Do I make a duplicate product page to the new product or do I need multiple product pages as each item is unique in it’s state.

Do I add another category to my website to just show Pre-Loved items?

Systems & IT - can my system handle multiple product codes based on the same original SKU

Do I need to introduce new barcodes for 2nd hand products so my warehouse can distribute them correctly- are they unique barcodes per refurbished product?

Do I have the facility to store a credit value, or issue a gift voucher for a returned product at a customer level on my system?

Customer Relations - how will our call centre operatives know if there is a scratch on the refurbished record player when it was sent out or if the damage has been created by the new customer? 

How does a customer know there is a button missing on the top right pocket of the coat they are buying second hand? Can we include a sticker that explains that the packaging has been repurposed for sustainability and won’t necessarily reflect what is in the box? 

Pricing - how do we appraise the price of a secondhand item? Do we need to introduce grades- if so will they work across all categories of products we sell? Is the value we offer for a buyback reflective of what the consumer could receive elsewhere selling the product directly? Can we offer an increased buy back value if we offer gift vouchers instead of cash?

Treatment of Products- Will a  product need a repair before it can be resold? What warranties can realistically be offered on preloved products? Who can repair the products- do we need to employ repairers locally to facilitate this?

Omnichannel- do our stores offer Recommerce/buy back solutions? Do we resell through the stores? How are products appraised in store? Are the staff skilled enough to appraise correctly in the branches? 

Examples We Love

Patagonia x Worn Wear 

https://wornwear.patagonia.com/

A real focus of the Patagonia brand is about sustainability and environmental responsibility.

Patagonia’s Worn Wear site not only offers secondhand clothes for sale, it sells seconds, and clothes recrafted from other clothes alongside offering video tutorials for repairing and looking after your gear.

It encourages a free return of the brands items in exchange for store credit.

Adidas

Infinite Play - Scheme now ended

Alongside producing shoes from 100% recycled ocean waste, Adidas have a real focus on sustainability and environmental concern.

In 2019, they teamed up with London based start up Stuffstr to focus on sustainability and recommerce by launching a  bring-back scheme, called ‘Infinite Play’ which translated into buy-back vouchers to UK consumers through Stuffsr’s logistic program. Stuffstr picked-up or provide pre-paid postage for items and will managed the reselling of clothing, further feeding into the sustainable cause.

It has not been reported why this scheme has now been discontinued.

The RealReal x Burberry

https://promotion.therealreal.com/burberry/ 

The RealReal are a real pioneer in the Recommerce world, as they offered one of the first fully authenticated luxury consignment sales.

With both an online presence, an app and key location stores in the US, they partnered with Burberry, on their quest to become ‘carbon neutral’ and to champion the ‘circular fashion economy’.

Interestingly they didn’t supply The RealReal with stock or exclusives, but instead provided an elevated experience for consumers who had purchased consigned Burberry branded pieces.

Encouraging the circular economy, Burberry instead offered an elevated in store experience in their brand locations across the US, including offering champagne and high tea, and personal shopping experiences. 

Reverb 

https://reverb.com/uk

Musical instrument and equipment retailer, Reverb, was acquired by Etsy in 2019, and are often referred to as the eBay for Instruments.

Predominantly selling customers 2nd hand gear, their recent focus has been on encouraging retailers and brands themselves to sign up to sell exclusives lines, open box products and one offs.

The site has grown significantly since the curation and sale of high profile artists own pre-loved equipment across the site, building a flourishing yet niche consumer base.

Selfridges x Vestiaire Collective

https://www.selfridges.com/GB/en/features/articles/selfridges-meets/vestiaire-collective/

Selfridges teamed up with the leading pre owned, luxury fashion marketplace, Vestiaire to empower customers to become more sustainable.

By providing the first physical in store experience for the brand, Selfridges not only offered a physical selling location for Vestiaire but also provided a dedicated resale point where customers can deposit items through the Concierge Service or Vestiaire Collective app.

Vestiaire co-founder, Fanny Moizant said; ‘We really wanted to empower consumers to become more sustainable and give a second or third life to their own items. It’s about buying better, investing in quality, reselling and making sure we don’t create more waste.

ReBag

Luxury second hand handbag retailer Rebag, spent 5 years developing their proprietary technology called ‘Clair’ to allow them to instantly determine a bags current resale value, using a universal luxury appraisal index.

By entering just a few details, clair aims to add a layer of much needed transparency to the often cloudy pricing in the resale market. So much so the service is not even tied to reselling through Rebag only. 

Stock X

Often controversial for it’s high ‘admin’ fees (in comparison to none niche specific sites), Stock X calls itself ‘the world's first stock market for things’.

Predominantly known in the Sneaker world, the high end fashion and streetwear markets are also prolific within the Stock X app.

Buyers place bids, sellers place asks and when a bid and ask meet, the transaction happens automatically.

All products are fully ‘authenticated’ by the Stock X team, with shipments to consumers going via a ‘Stock X’ authentication hub. So much worth is placed on the ‘authenticators’ that the Stock X authentication tag can often be seen across other reseller sites as a ‘sign of authenticity’.

They have facilitated numerous pop up drop off and authentication sites at key locations across the world.

Through their loyal customer base they have also been able to facilitate one off releases and partnerships with key brands.

If you’re interested in new ideas for a pricing model across your Recommerce site it would do you no harm to read this. https://stockx.com/news/ben-baller-ipo-results/