Retailers Get Hip to Recommerce: Why this Trend is Here to Stay

When Macy’s and J.C. Penney unveiled their partnerships with resale marketplace ThredUp to sell used clothes and accessories in some of its stores this past fall, a quiet movement toward retail resale or recommerce started to get loud.

Given the increased focus on sustainability and an Instagram-fueled focus on one-of-a-kind, vintage items, it was only a matter of time before it became impossible to ignore the revenue potential of recommerce.

In fact, the secondhand market is projected to grow to $51 billion in five years and be 1.5x the size of fast fashion by 2028. And, 33% of luxury consumers report that they’d buy more from their retailers of choice if secondhand options were offered. The rise of recommerce speaks to what today’s consumers want: The ability to break free of fashion’s traditional seasonal cycle and access products from high-quality brands at lower prices.

The Trend is Unstoppable Because it’s Generational

A GlobalWebIndex survey done with Snap of 79,000 consumers aged 16-22 across 45 markets found that Generation Z’s economic impact is greater than that of past generations at the same age. In the U.S. alone, those younger consumers already spend $44 billion annually and influence a total of $600 billion in household spend, according to research firm Mintel.

Many Gen Z members identify as conscious consumers making purposeful purchase decisions. A whopping 74% of 18-29-year-olds prefer to purchase from sustainable brands and shopping within the recommerce market fits this criteria. One in three Gen Z consumers are expected to buy secondhand this year alone, proof this trend has staying power.

People care about quality. There are brands that Millennials and Gen Z gravitate toward because of their brand promise. Patagonia is a good example. While the merchandise they sell may carry a heftier price tag, consumers understand that these aren’t “one and done” purchases. Patagonia even has a Worn Wear program so that items with wear and tear can be refurbished and resold to last even longer. When consumers choose to invest in a company like this, it’s with intention as they believe it’s reflecting their own values. This in turn increases loyalty to the brand.

Another example is Rent the Runway, which tackles a host of sustainability initiatives, including renting, reselling and donating. Consumers gravitate towards services like this for two reasons: 1) they’re trying to remain conscious of their impact on the environment; this is a way to reduce that effect while acquiring less new things; 2) they aspire to higher end, luxury goods yet require a more affordable price point. It’s organizations like these that are changing the retail landscape, and Millennials and Gen Z are embracing it.

Incorporate Reverse Logistics into the Customer Experience

At its core, partnering with resale or recommerce marketplaces helps retailers drive both store and online traffic, and it caters to the rise of the conscious consumer. To be successful with this approach, retailers and brands need to ensure that the customer experience is at its best, which is doubly challenging due to the circular dynamic of resale. In resale, forward and reverse logistics are fundamental to the customer experience.

Consumers need to be able to send their purchases back with ease, whether from a store or a site. It’s imperative for retailers to offer the same experience both purchase and post-purchase (i.e., receiving a receipt and then tracking the package for delivery) as they do when accepting items for resale. They should be able to easily track shipping of their resale items as well as process returns and receive a fast credit in their account.

The circular dynamic of resale or recommerce adds complexity and costs, but is fundamental to creating exceptional customer experiences and winning the loyalty of the next generation of consumers.

Erik Morton is SVP, Product and Strategy for CommerceHub

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