Can ‘recommerce’ take off outside of fashion?

Fash­ion has joined recom­merce, with super­brands Levi’s and Guc­ci the lat­est to adopt reselling in a sec­ond­hand mar­ket pro­ject­ed to more than dou­ble to $51 bil­lion by 2023.

As con­sumers become dri­ven more by sus­tain­abil­i­ty, there are glim­mers of ear­ly uptake beyond fash­ion. Recent data from YouGov found 17 per cent of retail­ers will start sell­ing sec­ond­hand items in 2021, with 32 per cent con­sid­er­ing offer­ing prod­uct recy­cling.

Yet recom­merce, often recog­nised as buy­back schemes, is not new, IBIS­World ana­lyst Gae­tana Mak notes, with adop­tion across the wider retail sec­tor lean­ing towards high­er-val­ue items. 

“Per­son­al elec­tron­ics typ­i­cal­ly lend them­selves well to resale to autho­rised stores, first­ly due to elec­tri­cal waste dis­pos­al reg­u­la­tions and restric­tions, sec­ond the rel­a­tive­ly high resale val­ue and third because many con­sumers do not know how to safe­ly erase sen­si­tive data,” Mak explains.

“Lux­u­ry jew­ellery and acces­sories are anoth­er cat­e­go­ry, as con­sumers often feel more com­fort­able hav­ing high-val­ue items main­tained, appraised and authen­ti­cat­ed before resale and pur­chase.”

Fur­ni­ture and elec­tri­cals make up the sec­ond biggest cat­e­go­ry out­side cloth­ing, rep­re­sent­ing 25 per cent of sec­ond­hand sales, as illus­trat­ed in IBISWorld’s Sec­ond-Hand Goods Stores report.

“The addi­tion­al time at home [dur­ing the coro­n­avirus pan­dem­ic] has result­ed in con­sumers putting more thought into how their liv­ing space can accom­mo­date remote work­ing, exer­cis­ing, edu­ca­tion, enter­tain­ment and relax­ation, bet­ter serv­ing their needs, at a frac­tion of the cost,” says Mak.

“Mean­while, we have seen an uptick in hous­ing trans­ac­tions with the abo­li­tion of stamp duty for most first-time buy­ers, prompt­ing these gen­er­al­ly younger buy­ers to seek afford­able meth­ods to fur­nish and inject some per­son­al­i­ty into their prop­er­ty.”

Retail brands leading the resale market

It’s a sen­ti­ment John Lewis and IKEA are already act­ing on. John Lewis is launch­ing a buy­back or take-back scheme across all its prod­ucts by 2025. IKEA, mean­while, was set to open its fur­ni­ture buy­back and resale offer­ing in select­ed stores to coin­cide with Black Fri­day, but with a sec­ond lock­down in force, is post­pon­ing to Jan­u­ary 2021.

Both claim increas­ing con­sumer choice and reduc­ing envi­ron­men­tal impact as key dri­vers, form­ing part of a group of more than 60 retail­ers to sign up to the British Retail Consortium’s Cli­mate Action Roadmap.

With house­holds respon­si­ble for around 60 per cent of glob­al green­house gas emis­sions, accord­ing to Hege Sæb­jørnsen, coun­try sus­tain­abil­i­ty man­ag­er for IKEA UK and Ire­land, the retail­er has a unique oppor­tu­ni­ty to lead change.

“Last year, we repaired and repack­aged 47 mil­lion prod­ucts glob­al­ly. Through ini­tia­tives like buy­back, our ambi­tion is to give a sec­ond life to more prod­ucts and cre­ate more afford­able, acces­si­ble solu­tions to help peo­ple live more sus­tain­ably,” she says.

What barriers do business models face?

Good inten­tions aside, will recom­merce real­ly catch on when a thriv­ing sec­ond­hand mar­ket­place already exists? While Mak sees the mer­it, she warns of bar­ri­ers in the form of acces­si­bil­i­ty and appeal.

“The IKEA scheme, for instance, requires cus­tomers to bring the ful­ly assem­bled prod­uct back to their near­est store, often typ­i­cal­ly locat­ed out­side city cen­tres. While a col­lec­tion ser­vice would help, the addi­tion­al cost of trans­port and logis­tics would eat into already thin­ning retail mar­gins,” she says.

Oper­a­tions will cer­tain­ly prove ini­tial­ly pro­hib­i­tive for small­er play­ers, adds Abbie Mor­ris, founder and chief exec­u­tive of sus­tain­abil­i­ty com­par­i­son plat­form Com­pare Ethics, who also high­lights prod­uct dura­bil­i­ty as an issue.

“As resale becomes increas­ing­ly nor­malised, it is expect­ed there will be bet­ter sys­tems cre­at­ed to facil­i­tate the resale econ­o­my, sup­port­ing small­er play­ers to enter the space,” she says. “But cur­rent prod­ucts are not made to last. We need a com­plete over­haul of the design process to suc­cess­ful­ly cap­ture the oppor­tu­ni­ty.”

Partnerships the key to resale commerce

Con­sen­sus is that more part­ner­ships between retail­ers and resellers will pave recommerce’s path into the main­stream.

Demon­strat­ing suc­cess in part­ner­ship is the British Heart Foun­da­tion (BHF), which makes 35 per cent of its prof­it through home­wares. It dom­i­nates the sec­ond­hand fur­ni­ture land­scape through eBay and Gumtree, with fur­ni­ture retail­ers HSL, DFS and Made.com reg­u­lar­ly donat­ing stock. Last year, BHF stores helped reuse and recy­cle more than 35,000 tonnes of fur­ni­ture and elec­tri­cal prod­ucts and res­cued 180,000 sofas from land­fill, help­ing pre­vent 135,000 tonnes of car­bon emis­sions.

Guc­ci made its for­ay into resale by part­ner­ing with lux­u­ry con­sign­ment web­site The Real­Re­al. Its brand­ed space fea­tures a mix of items con­signed by con­sumers and the brand itself. Guc­ci is one of The Real Real’s most in-demand vin­tage home brands, with its lat­est annu­al Resale Report reveal­ing a 24 per cent year on year increase in demand for home items.

Mar­ket trends are also build­ing appetite for The RealReal’s busi­ness-to-busi­ness ven­dor pro­gramme, a plat­form where lux­u­ry brands and retail­ers can either anony­mous­ly or pub­licly set up a resale shop win­dow, with The Real­Re­al doing all the heavy lift­ing in terms of list­ing and logis­tics.

Alli­son Som­mer, senior direc­tor of strate­gic ini­tia­tives at The Real­Re­al, says the pan­dem­ic has catal­ysed brands’ com­mit­ment towards resale.

“For brands like Guc­ci, the appeal is in expand­ing its core sus­tain­abil­i­ty val­ues to include extend­ing the life of the pieces they cre­ate. Our glob­al audi­ence offers an oppor­tu­ni­ty to sell through exist­ing inven­to­ry or build brand aware­ness,” she says. Part­ner­ships, whether for prof­it or char­i­ta­ble, are tipped to be what takes recom­merce out­side larg­er retail­ers and beyond fash­ion, tick­ing the box­es of crit­i­cal mass, oper­a­tional effi­cien­cy, brand recog­ni­tion, con­sumer val­ue and, of course, sus­tain­abil­i­ty.