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Riding the Wave of Recommerce: Why Brands Must Seize This Opportunity

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Despite the longstanding existence of the resale model, recent years have witnessed a transformative surge in recommerce. Fuelled by ongoing digitalisation, global financial instability, and a growing commitment to sustainability, recommerce has reached heretofore unforeseen levels. The evolution includes geographical expansion, diversification across product categories, the introduction of new recommerce solutions, and significantly heightened interest from both businesses and consumers.

Resale thrives due to younger demographics and rising interest from older generations

Almost half of digital consumers globally bought previously owned products in 2023

Source: Euromonitor International’s Voice of the Consumer: Lifestyles Survey

Consumer interest is propelled by younger generations, with millennials being driven by their commitment to contributing to environmental issues, while Generation Z is more focused on value, considering their early-career stage and limited savings. Only 28% of Generation Z feel financially comfortable in 2023, which is below the 33% average for the populace as a whole. Leading resale platforms are dominated by younger consumers, with most users on resale platforms, from Lithuania-based Vinted to China-based Xianyu to UK-based Depop, under the age of 35 years, according to the companies.

At the same time, older generations have made the biggest shift in their beliefs regarding recommerce since 2019, signalling that the historical stigma associated with second-hand products is dissipating rapidly. As a result, consumers of all ages are increasingly open to purchasing second-hand items, embracing resale as a crucial aspect of a mindful and forward-thinking consumer culture. These consumers increasingly believe they can make a positive impact on the world through their choices and actions.Chart showing share of digital consumers

Recommerce benefits from ongoing digitalisation – especially due to the convenience provided by e-commerce

In 2023, 64% of the entire global population used the internet, double the rate from a decade ago. The e-commerce boom during the pandemic transformed consumer behaviour, leading to increased expectations for convenience in online services, including recommerce. As a result, second-hand online platforms now offer user-friendly interfaces, integrated delivery, and payment options, mirroring the seamless experience of e-commerce.

Furthermore, the growth of recommerce is mobile-driven, with platforms such as Vinted seeing 90% of their customer traffic come through mobile devices.

Of those digital consumers who purchased second-hand products, more than half (51%) opted for the ease and accessibility of online transactions in 2023

Source: Euromonitor International’s Voice of the Consumer: Lifestyles Survey

The surge in online popularity is also linked to the expanded product variety within the online resale sector. Initially centred on second-hand apparel, recommerce now encompasses nearly all categories, ranging from consumer electronics to home care to art.

To foster consumer trust, retailers and resale platforms are expanding services to include consumer protection, user verification, product authenticity checks, detailed search options, and more, making buying and selling pre-owned items simpler than ever before.

Retailers and brands recognise the potential of recommerce and are actively entering the market

Recommerce enhances efficiency, saves resources, lowers production costs, reduces environmental impact, and creates new revenue streams. A recent report by thredUP, a US-based online resale platform, reveals that second-hand apparel value sales are growing at a rate three times that of new items. This presents a win-win strategy, contributing to circularity and sustainability while boosting revenues, making it an opportunity no business wants to miss.

56% of industry professionals indicated that they planned to invest in circular economy business models in the next five years, up by seven percentage points compared to the previous year

Source: Euromonitor International’s Voice of the Industry: Sustainability Survey 2023

Chart showing companies' plans to invest in circular economyBrands entering the resale market must determine their desired level of control. Some prioritise brand loyalty and new consumer engagement, opting to outsource recommerce functions. Others prioritise full control for product quality. Methods vary, from enabling consumer reselling on the brand's website to collaborating with second-hand platforms such as Poshmark, OfferUp or Vinted, or managing resale in-house. Notable buy-back initiatives, including BuyBack by Decathlon, Buyback & Resell by Ikea, and Worn Wear by Patagonia, offer repair, refurbishment, and brand verification, ensuring quality control for brand-exclusive customers.

While consumer-to-consumer transactions are still the most common recommerce model, companies are now venturing into business-to-business solutions. LVMH's Nona Source, an online resale platform, offers emerging creatives and brands access to premium materials from the fashion and leather goods houses within the group. This innovative platform promotes creative re-use by providing a diverse catalogue of materials, showcasing the growing potential of the circular business model for brands and retailers.

Recommerce is reshaping the retail landscape, and businesses cannot afford to overlook it. In 2024, the market braces for the rise of novel solutions, dynamic collaborations, and new players in the recommerce sector, driven by the growing interest in resale across generations and regions.

To explore more about recommerce and other leading digital consumer trends, read our Top Five Digital Consumer Trends in 2024 report, and sign up to attend our 2024 Consumer Trends to Watch webinar.

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