Outdoor co-op REI, high-end outdoor apparel/gear brand Arc’teryx, fashion brand Amour Vert, running supplier On and luxury brand Philip Lim stood out in the first recommerce leaders index compiled by Trove, as the growing category has added an estimated 100 programs in the past year.
The resale market for apparel alone grew an estimated 30.1% to $182.4 billion in 2022, according to GlobalData, and is growing at 5X the rate of retail, reports the Ellen MacArthur Foundation, which tracks the circular economy.
This trend, and the consumer demand behind it, was recently demonstrated when major resale marketplace Liquidity Services opened a second location for curbside purchase by shoppers in Cincinnati.
REI was the overall leader, with 72% of the top practices tracked across brand positioning, commerce, trade-in and business model integration, according to Trove and OSF, which gathered the data from 40+ companies. The retailer has been conducting in-store “garage sales” for a long time, and brought its Re/Supply program online in 2017.
“REI has since integrated the program into its co-op membership program as a core benefit and is a leader in omnichannel commerce and trade-in,” according to the index.
Arc’teryx was the top company in the outdoor category, while On scored highest for footwear, Amour Vert for fashion/apparel and Phillip Lim for luxury. In terms of full disclosure, REI, On and Arc’teryx all work with Trove, as did eight others scored in the index.
Retailers and brands in the outdoor category scored highest on the index, a function of the general longevity and higher price points of the products, and the natural affinity of customers toward pre-owned goods. This was followed by footwear, apparel and fashion and luxury goods.
Also scoring high was outdoor gear retailer/brand Patagonia, with its “scars tell the story” and “better than new” taglines epitomizing its brand positioning of recommerce goods. Luxury handbag retailer Coach, meanwhile, allows customers to add both new and used goods in the same online cart, and heavily promotes in-store trade-in through its “Coach Re-Loved” program.
Trove founder and CEO Andy Ruben, who left Walmart to start the company in 2012, said the recommerce trend started with the certified pre-owned market created by carmakers like Lexus and Mercedes-Benz in the 1990s. It then spread to mobile devices, with Apple offering upgrades to customers turning in older iPhones.
In another proof point, Ruben said, Bank of America estimates there is more than $2 trillion worth of resellable goods hiding in closets and garages, with only 5%-7% of it available online, representing the addressable market.
“In retail, first you had innovators like The RealReal, ThredUp, Posmark and Depop,” Ruben said of the popular pre-owned apparel marketplaces. “Now more brands are realizing the customer shift, fearing they’ll lose revenue and relevance if they’re not part of this growing segment.”
According to the Ellen MacArthur Foundation, U.S. consumers on average purchased 64 items in 2022, compared to just 12 per year in the 1980s. “We’re all buying more every year but wearing them out less,” Ruben said. “It’s an opportunity for brands making quality goods to buy them back and resell.”
While the luxury goods category had the fewest number of companies represented in the index, it had the highest number of customers participating in recommerce, Ruben said. He added this demonstrated the large audience-building potential in front of them. This dynamic was called out during a panel discussion at the NRF Big Show in January which included representatives from Saks Off Fifth and luxury goods marketplaces Fashionphile and LePrix.
“Luxury retailers and brands have an opportunity around heritage and the narrative of their products, the epitome of the industry,” Ruben said. “They take pride in the storytelling behind products, so resale is the greatest opportunity to tell those stories in a deeper way.”