Even though Re-commerce is not a new concept, of late it is experiencing a transformation that fuels growth and accelerates environmental protection. According to a study, 78 % of consumers prefer to buy used goods online instead of in brick-and-mortar stores. Thus 2022 witnessed more specialised re-commerce platforms and brands that picked up on this trend. And by 2023, re-commerce will establish itself even more firmly in the mainstream.
What is Re-commerce?
The process of selling previously used, old, or new products, through physical or online distribution channels to buyers who undergo cleaning and repairs (if required), reuse, recycle or resell them. These are usually the checked goods and, if necessary, repaired or reconditioned and then sold again bringing them back into the consumption cycle. The ecological Re-commerce business model is specifically aimed at reducing the environmental footprint of the product a company makes or sells.
Statistics that prove Re-commerce is the next growing trend
C2C re-commerce and B2B re-commerce are expected to increase by more than 55% by 2024 vs what it was few years ago. (2020)
- According to Thred Up’s 2020 Fashion Resale Market Analysis; C2C re-commerce and B2B re-commerce are expected to increase by more than 55% by 2024 v/s what it was a few years ago.
- According to Coresight Research, Re-commerce merchants are growing 20 times faster than the broader retail market and five times faster than off-price retailers.
- The total Fashion second-hand apparel resale market grew at a compound annual rate of 13 %, reaching 33 billion in 2021.
- Re-commerce currently represents a 73 billion market in fashion alone (3.5% of the global fashion market) and is projected to grow 10 times faster i.e.,700 billion by 2030 (23% of the market).
- Clothing items, shoes, and accessories today make up 49 % of the total Re-commerce market worldwide.
- GlobalData has estimated that the total worldwide apparel market resells will hike to pounds 52 billion in 2023.
- Electronic waste is a sore point on the global and European sustainability credentials. Statistics estimate this waste is 575 million tons per year and expect this number to reach nearly to 75 million tons by 2030.
Factors That will Drive Re-commerce Growth in 2023
1. Millennials’ adoption of the Re-commerce trend.
Today’s younger consumers or Millennial favour the concept of sharing over owning. Massively successful companies such as Uber and Airbnb illustrate how the sharing economy is growing immensely.
2. Consumer’s preference for used goods at a discount.
Many shoppers have the ability to easily shop overstock, out of season, or gently used products at discounted prices from trusted online stores from the comfort of their houses.
3. Powerful digital marketplaces
The reliable and mobile-friendly digital marketplaces make it easy for shoppers to market and sell used goods today. They offer a wide range variety of content (eBay and Craigslist) to nice segments (RentTheRunway, TheRealReal)
4. The environmentally conscious consumers
Re-commerce helps consumers to resell used goods instead of throwing them away and receiving fair compensation for them. This helps to create an eco-friendly environment where consumers can easily find an ethical outlet for their used products instead of discarding them anywhere.
Main Benefits of Re-commerce for online Retailers
Brands and retailers accept returned goods that need to be repaired or reconditioned and are resold to different customers, creating an additional profitable revenue stream.
1. Retain customers and build loyalty
By proving an easy mechanism and fair market prices for used goods, retailers allow consumers to stay engaged with the brand which further fuels purchase decisions, customer loyalty and future purchases.
2. Acquire new customers and increase growth
Brands and retailers accept returned goods that need to be repaired or reconditioned and are resold to different customers, creating an additional profitable revenue stream.
3. Drives Sustainability program
Products can be resold or reused, or can be repaired before reselling, increasing the product life and helping reduce the amount of waste associated with their products. According to a report by McKinsey & Company and Global Fashion Agenda, “every percentage point increase in the circular economy market by renting, reselling, repairing, refurbishing – could save 13 million tons of CO2 by 2030.
Finally, the future of Re-commerce
According to recent CapGemini study 66 % of consumers from nine different countries choose products or services because of their “environmental friendliness”.
To power more sustainable consumption, industry pioneers began deploying re-commerce offerings, mixing rental and resale ever since 2012. And after 10 years of breakthrough innovations and learnings, 2022 proved to be the year of economical business model adoption. According to recent CapGemini study 66 % of consumers from nine different countries choose products or services because of their “environmental friendliness”.
- Re-commerce gives an alternative means to consumers to use the products they want by buying pre-owned items used or repaired existing resources through rental or resale services.
- With the circular re-commerce initiatives, brands are able to generate extra revenue with fewer new products, all thanks to the reuse of the goods.
- Rental and resale of pre-used products will help increase the CLV and boost the brand equity value too.
- Re-commerce helps target new customers mainly Gen Y, Z, and A who are engaging with the brand for the first time.
- While today 70% of the industrial emissions happen at the manufacturing level, you can decrease the impact by reducing the volume of production by leveraging the reuse of resources.
- Re-commerce helps brands to logically collect valuable new data about customer behaviour, product desirability, and durability.
Almost eight out of ten respondents of a survey mostly Generation Z and Millennials, said they had bought or wished to buy used products. Observing these developments and the growing attraction for Re-commerce, we believe “Re-commerce” is the next big trend in eCommerce.
References:
Lepice, V. (2022, May 23). Recommerce Ultimate Guide and 2022 trends. 1GNITE. Retrieved December 13, 2022, from https://www.1gnite.com/recommerce-guide-and-2021-trends/
Lizee. (n.d.). Retrieved December 13, 2022, from https://www.lizee.co/blog/why-should-brands-and-retailers-embrace-re-commerce-in-2022
Wassel, B. (2022, January 2). What recommerce can teach retailers about new consumer behaviors and future-proofing sales. Retail TouchPoints. Retrieved December 13, 2022, from https://www.retailtouchpoints.com/topics/sustainability/what-recommerce-can-teach-retailers-about-new-consumer-behaviors-and-future-proofing-sales
