Can ‘recommerce’ take off outside of fashion?

The secondhand market is already popular in fashion and electronics, but a new wave of sustainably minded consumers could see the trend expand into other areas of retail

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.

Current products are not made to last. We need a complete overhaul of the design process to successfully capture the opportunity

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 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.