According to a report by GlobalData, the global resale sector would develop 11 times faster than traditional retail by 2030, reaching €84 billion. In comparison, the forecast for fast fashion is much more conservative, at only 40 billion dollars. According to this research, the resale market is expanding at a higher rate than the demand for sustainable fashion. According to the report, 118 million people will be looking to sell a used product for the first time in 2021, up from 36,2 million in 2020 – a 226 percent increase. The fact that the (supply) chain isn’t transparent and they can’t rely on the product’s claimed sustainability because of ‘greenwashing’ is the most prominent reason for consumers to choose resale (second-hand) products over a sustainable-labeled new product (made with sustainable fabrics or a sustainable manufacturing process, for example). Digital marketing course malaysia is getting important these days.
It’s no wonder, then, that huge retailers are increasingly focusing on making resale easier and incorporating it into their existing business strategies to increase revenue.
Resale platform of IKEA
IKEA is testing its resale platform in the United States, Zalando promotes its resale efforts with outdoor ad campaigns, and H&M partnered with Selly to launch a resale platform. Even Gucci is now offering resale, seeing it as a way to reach out to new (mainly young Gen-Z) customers. It may appear that this strategy is only appropriate for major brands, but this is far from the case. It is now possible for any brand to incorporate resale into their business model, especially now that the technical solutions that make resale possible are also available to smaller businesses.
Consumers believe that brands are responsible for initiating positive change in 98 percent of cases.
(Consumer research conducted by Futerra in June 2019.) 2,400 consumers from the United Kingdom, the United States, and India took part in the survey.)
But what’s the deal with this sudden change of heart?
There are a few reasons why brands are focusing on the resale market right now. To begin with, you’ve probably noticed that there is a lot of second-hand trade. Vinted and The Next Closet, for example, are rapidly increasing in popularity and volume. Second-hand Facebook groups and marketplaats trading are also popular.
Furthermore, consumer demands are changing. They still want to buy things at a good price, but they also want to reuse products and decrease trash and emissions in the process. All of these requirements are met by resale. Clients of MUD Jeans, for example, receive a discount when they return their old jeans, which are then recycled to avoid the waste of sustainable raw materials. Repairs are available from Denham to extend the life (and sustainability) of their products. Resale is a way for these brands to build long-term relationships with their customers while also reinvigorating their brand’s ethical value.
The environmental impact of a used or new product is vastly different. The carbon footprint of a used goods is a stunning 82 percent lower.
Is Resale a Good Fit for My Brand?
Reselling is typically part of a brand’s sustainability strategy, but it can also be used to extend CLV (customer lifetime value) and increase purchase frequency. You might envision how customers would like to sell their old purse, ottoman, shoes, or outfit and use the earnings to purchase something new, similar to how we see trade-in discounts in the vehicle business. Customers may have changed sizes and are looking to sell their L in order to purchase an M. When dealing with your customers, the client data you acquire here is quite useful (segment). You may then utilise this information to improve your web marketing. Win-win!
Start by seeing if people are already selling your product on popular marketplaces to see if it’s worth your time to resell it. Is your product available for resale on Vinted, eBay, or a Facebook group? If that’s the case, you’ll be able to pull the data and cash flow into your own portal and connect with the customer.
What Business Model Should I Use and How Do I Get Started?
Consumers in the fashion and interior design industries are accustomed to purchasing new items on a regular basis and frequently use second-hand options for both buying and selling. Furthermore, numerous studies show that Gen Z, in particular, values resale products that are both more sustainable and less expensive.
As part of your sustainability plan, you can use the following business models:
Peer-to-peer: you bring the buyer and seller together.
You build and manage your own resale platform if you don’t already have one (with or without a partner).
The product is bought back by the seller or a third party. This is a financial risk because you don’t know if you’ll be able to resell the thing you bought back.
Consignment: the seller or a third party purchases the item and handles all of the logistics. Only when the product is actually sold again is the transaction completed.