Despite the ongoing challenging situation for some retailers, second-hand retail is exploding. Research predicts the second-hand market will double in the next five years, with some reports suggesting a 39% growth rate year on year. From peer-to-peer selling apps like DePop and Vinted to curated upscale online platforms such as Vestiare Collective and The Real Real, there’s a re-commerce platform to suit everyone’s taste and budget.
It’s not just fashionistas that are feeling the love for the pre-loved, with specialist sites for used baby clothes, cameras, and toys. And let’s not forget eBay, Gumtree, Facebook Marketplace, and the literally thousands of specialist Facebook selling pages. But what does this mean for brands? With an entire secondary market booming, where brands are being bought and sold by consumers ‘in the wild,’ is second-hand retail a threat or an opportunity?
At face value, there is the obvious threat of sales being cannibalised by more consumers buying second-hand items rather than buying new ones. This is coupled with the less talked about (and less understood) issue of the threat to brand image. In ‘the wild’ (such as peer-to-peer online selling sites) brands have no control over what condition or price at which their products are being bought and sold, or by whom. As author Andrew Bevan argues in his book, Culture of Commodity Branding, products can have an entire cultural afterlife in the second-hand market. Brand strategists need to address these ‘ghostly identities’ lest they haunt brand image in the primary marketplace.
But the ‘glass half-full’ approach offers a more optimistic, and exciting, opportunity for brands. With thriving second-hand marketplaces for everything from high-end fashion to children’s toys and sports equipment, consumers are getting more conscious about the resale potential of what they buy. Whether it stems from a greater consciousness about what happens to our possessions once we are finished using them, or simply a desire to recoup some of the cost from an item by reselling once we no longer want it, the resale opportunity has the potential to become a key driver for purchase decision making.
25 years after the launch of eBay, it felt like 2020 was the year brands really woke up to this opportunity, with more and more retailers now seeking to ‘close the loop’ and transition to a fully circular business model. IKEA launched its buyback scheme where customers can bring unwanted furniture to trade-in, in return for a voucher to spend in-store. German fashion retailer Zalando launched its own pre-owned platform, where customers can resell items bought on Zalando and elsewhere, and benefit from fast shipping and free 100-day returns on preloved clothes bought on the site. Levi’s also launched its own similar online buyback scheme, with Levi’s Secondhand. Launched in October last year with a multi-media campaign fronted by Hailey Bieber, the site allows people to buy and sell pre-loved Levi’s, a smart business move when you consider Levi’s is apparently the most searched for brand in online and thrift stores.
Even brands who haven’t fully embraced the re-commerce opportunity are recognising the growing consumer interest in it. In February 2020, John Lewis launched its Wear it, Love it, Hand it Down scheme, a hand-me-down drive to encourage parents to pass on unwanted children’s clothes when they are no longer needed. With extra big cotton labels on John Lewis own-brand children’s clothes to allow parents to cross out one child’s name and replace it with another, this simple campaign was a smart way to promote sustainability credentials while reminding customers of the quality and durability of John Lewis products.
With increased consumer focus on sustainability credentials and waste reduction, coupled with a growing interest in thrifting, it’s clear re-commerce is here to stay. The smart brands will be the ones who see the business opportunity as well as the reputation opportunity. By building buy-back and resale schemes into their business model, these brands will profit from a triple whammy of benefits: extracting more revenue from each product as it circles back through the business to be sold again and again, protecting the brand image from harm in ‘the wild’, and increased sustainability credentials.