The Rise of Recommerce

The Rise of Recommerce

The Rise of Recommerce 1440 428 Chute Gerdeman

You’ve heard the saying, “what’s old is new again.” On the surface, it may seem applicable to the rise of recommerce, but the statement is far too simple to define a movement motivated by values, both brand and consumer.

Backing up though, it’s important to take a look at how we got here. Fast fashion once reigned supreme as a driving force in the industry with ultra-affordable pieces and new styles springing up faster than they could exit the runway. Consumers who once filled their closets with disposable wardrobes soon became aware of the environmental and social costs of producing temporary textiles. The appeal dulled as fast as the color of these lesser quality clothing items.

Brands like AYR quickly emerged to outwardly embrace “slow fashion,” and others like Patagonia encouraged consumers to well, not only consume less, but created ways to help extend the lifetime of their cherished garments. At the same time, we watched the emergence of apparel rental models like Rent the Runway and Nuuly. High-fashion became affordable on temporary terms, and consumers were content with access over ownership.

The retail reality though, is this isn’t just a shift. What we’re seeing suggests long-term adoption. And, while many brands have taken the initiative to source or produce more sustainable products, many realize it’s not going far enough. We’re entering an era of recommence, and brands are integrating these resell programs into an overall retail model.

A Circular Economy

The drive to do good is good, but it turns out it’s actually pretty profitable too. Online consignment and secondhand sales are soaring. Currently, the secondhand market generates nearly $30 billion in sales annually in the United States and is projected to double in the next five years. According to research commissioned by online resale company ThredUp, the sale of used clothing is projected to grow 11-times faster than new clothes by 2025, and 60% of traditional retail executives plan to capitalize on recommerce sales via partnerships with outsourced resale businesses.

In many cases, sites like Poshmark, Depop, and Stadium Goods, are already reselling major retailer products. Why not embrace the demand, carve out a piece of the market, and support sustainable initiatives?

“The sale of used clothing is projected to grow 11-times faster than new clothes by 2025.” – Online Resale Company, threadUP

Lululemon – Like New

Athleisure retailer Lululemon is stretching its reach into the resell market with the launch of its “Like New” program. Through a partnership with Trove’s online resale marketplace, customers can now trade in gently used Lululemon items in-store or by mail in exchange for a gift card. A month later, the item will re-enter circulation online at a lower price point. Items are cleaned, and any that don’t make the cut are recycled through the brand’s partner Debrand and used for things like home insulation, stuffing mattresses, furniture, and stuffing sports equipment.

Store credit for trade-ins range from $5 for tank tops and shorts to $25 for coats and jackets. And you can even trade-in Like New gear! Furthermore, 100% of profits from Like New are reinvested into sustainability initiatives. The brand is currently testing in California and Texas. If it goes well, they’ll roll out to other markets.

“Lululemon is actively working to help create a healthier future. The business is working toward several sustainability goals, including making 100% of its products with sustainable materials and end-of-use solutions by 2030.” – Calvin McDonald, CEO

Nike – Refurbished

To expand the lifespan of footwear, athletic giant Nike launched an in-house program for new, gently worn, or cosmetically flawed sneakers. Customers can bring in their shoes to select locations participating in the “Refurbished” program. Shoes are inspected, cleaned, and refurbished in-house by hand. They’re then resold at discount prices at outlets, clearance stores, and community stores. So, don’t stroll in from 5th Avenue expecting some discount kicks.

The initiative is currently in place in 15 stores throughout the US, and the brand hopes to add more to the mix by year-end. The only downside for Nike’s refurbished program is there’s no incentive (like store credit) for participation, and it’s limited to sneakers. Could we see the brand expand the program? It’s likely only a matter of time.

Ikea – Buy Back & Resell

The apparel industry has largely driven the recommerce movement, but others are taking note. Swedish furniture brand Ikea, has launched its own resell program dubbed “Buy Back & Resell.” The program has been implemented in several countries but is currently being piloted in Pennsylvania, where its American headquarters reside.

Customers interested in selling an Ikea item simply fill out a form online and state the condition. Ikea then estimates what it can offer for the product. They then bring in-store where an associate will verify the condition and provide store credit. Ikea will make sure the product is safe to resell (but not fixing cosmetic flaws), and it’ll revisit the store floor being clearly identified to separate from new products. A couple of caveats, not all products are eligible, and the item must be fully assembled (not even Ikea wants to assemble its own product). The brand plans to roll out the program to all US stores if successful.

“Part of that is looking at opportunities and services to really provide our customers a way to prolong the life of our products, rather than them going to landfill if they’re done with the product.” – Jennifer Keesson, Sustainability Manager, Ikea Retail US

Conscious consumers are calling for brands to take action, and their purchase with purpose is creating staying power for the recommerce market. Whether it’s an online partnership or in-house program, brands that can create circular ecosystems now will be ahead of the game.

Want to learn more about consumer trends driving sustainable practices in retail? Check out our insights article, “Gen Z: Retail’s New Conscious Consumers.”

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