Recommerce: A Not-New But Growing Trend That’s Attracting Retailers, Too.
Recommerce has been around for a long time. At its most basic, this buying-selling paradigm abounds on Saturday mornings when bargain hunters head out in search of treasure within the used goods for sale in yards and garages throughout the neighborhood.
Of course, there are also thrift and secondhand stores that resell donated goods to raise money for a good cause.
And consignment shops that provide a way for former owners to make a bit of money from the items they drop off in hopes of a sale.
While these in-person options for recommerce remain popular today, they certainly don’t have the reach that the internet provides—which is why eBay became one of the early and most popular platforms for reselling used goods.
The company’s 2022 Small Business Report cites the company’s history as a recommerce pioneer: “Sellers realize there is value in pre-owned goods, and they come to eBay to find customers for those items. Pre-loved items become new treasures for buyers. Recommerce is central to who we are and enables a more sustainable future for us all.”
Certainly, there are many other online platforms cashing in on the recommerce opportunity—including Poshmark—which was recently acquired by South Korea’s Naver Corp, described by Reuters as both an ecommerce company and the country’s top search engine.
The Reuters article underscores some of the factors fueling recommerce growth: “With Millennials and Gen Zers leaning toward value-driven consumption such as environmental protection, and with inflation squeezing wallets, Naver and Poshmark seek to lead ‘re-commerce’ or consumer-driven resale - expected to be the next global trend after convenient e-commerce, or fast fashion, Naver CEO Choi Soo-Yeon told Reuters.”
Such dynamics have also led some retailers to the recommerce opportunity—and many are counting on recommerce tech solutions to help them do it.
One of those solutions is Trove—which says it “powers trade-in and resale for brands and retailers, delivering profitable and sustainable growth at scale.”
Retail Dive’s Stephanie Arnold cited a press release in quoting Trove’s CEO about the surge in recommerce growth: “’The recommerce market continues to be one of the fastest-growing retail segments, propelled by consumers’ desire for more sustainable and affordable shopping options,’ Trove CEO Gayle Tait said in a press release. ‘In-store trade-in programs enable brands to deepen their relationships with customers in real time and drive significant loyalty and lifetime value over the longer term.’”
Here, we’ll take a look at highlights from several recent reports related to recommerce to see what some of the research says about this growing trend.
eBay Recommerce Report
Conducted in 2021 and published in April of 2022, eBay’s Recommerce Report “surveyed nearly 4,500 people in the U.S., U.K., Canada, Germany, France, Italy and Australia.”
Findings revealed that “sellers and buyers are embracing recommerce worldwide — with Generation Z driving the demand.”
20%—"of eBay buyers cited the circular economy as their top reason for buying pre-owned”
32%—"of sellers who started in the past year identified as Gen Z — the largest of any generation”
34%—"of sellers named sustainability as a major reason for engaging in recommerce”
72%—"of sellers surveyed believe buying pre-owned has become more common in the past year”
In terms of who’s most interested in buying pre-owned items, “New younger generations of sellers and buyers are embracing recommerce. Led by Gen Z, they are increasing demand for pre-loved products faster than new,” the report said.
The “percentage of global responding sellers in each generation who have purchased pre-owned goods in the past 12 months” underscored this trend:
In the following video from Bloomberg Technology, eBay CEO Jamie Iannone discusses the findings of the report and “shares his views on buying and selling secondhand globally, why it has become a growing trend in retail, and how Covid-19 has impacted shopping habits.”
OfferUp® Recommerce Report
OfferUp touts itself as “the largest mobile marketplace for local buyers and sellers.” In May of this year, the company commissioned a survey of 2,000 U.S. adults for its 2022 Recommerce Report.
In the intro to the report, OfferUp CEO Todd Dunlap underscored the surge in recommerce growth: “…America’s obsession with buying and selling pre-owned items has created an industry that is growing faster than traditional retail, with no signs of slowing down.”
“This 2022 report finds that recommerce grew nearly 15% in 2021, marking the highest rate of growth in history for the industry,” Dunlap said. “What’s more, participation on recommerce marketplace apps continues to grow, as Americans spend an average of 27 minutes per day on recommerce marketplaces, which is just shy of the 30 minutes per day spent on Instagram, Facebook, and Snapchat.”
Report highlights noted that among those surveyed:
82%—"of Americans buy and sell secondhand goods, and the majority prefer to use online recommerce marketplaces as opposed to in-store options.”
93%—"of Americans say inflation impacts their decision to buy and sell secondhand goods, with an increasing emphasis on making and saving money accelerating the growth of recommerce.”
80%—"growth is expected for the recommerce economy in the next 5 years. The recommerce market is projected to reach $289B by 2027 and grow 5x faster than the overall retail market.”
63%—"of shoppers always or often check secondhand buying options before purchasing items brand new”
61%—"of shoppers choose to shop secondhand via online recommerce marketplaces while only 39% shop secondhand in-store”
25%—"of Americans say recommerce became a trusted secondary source of income over the last 12 months”
16%—"of Americans say recommerce became a primary source of income over the last 12 months”
thredUP 2022 Resale Report
As noted previously, the growing popularity of recommerce has started to infiltrate retailers and major brands—as noted in thredUP’s 2022 Resale Report.
Described in a press release as “one of the largest online resale platforms for women’s and kids’ apparel, shoes, and accessories,” the company commissioned retail analytics firm GlobalData to conduct the study, which “serves as the most comprehensive measure of the secondhand market and includes global market sizing for the first time.”
Some of the overall key findings—as well as those related to the growing embrace of recommerce by brands include:
Secondhand is becoming a global phenomenon, led by the U.S.
“The global secondhand apparel market will grow 127% by 2026 – 3X faster than the global apparel market overall.”
“The U.S. secondhand market is expected to more than double by 2026, reaching $82 billion.”
“Resale is expected to grow 16 times faster than the broader retail clothing sector by 2026.”
Technology and online marketplaces are driving the growth of the U.S. secondhand market.
“Online resale is the fastest-growing sector of secondhand and is expected to grow nearly 4 times by 2026.”
“50% of total secondhand dollars are expected to come from online resale by 2024.”
“70% of consumers say it’s easier to shop secondhand now than it was 5 years ago.”
In an inflationary environment, resale is a bright spot for the consumer.
“58% of consumers say secondhand has helped them in some way during a time of inflation.”
“80% of consumers are buying the same or more secondhand apparel items, compared to 49% of consumers buying the same or more apparel items overall.”
“25% of consumers say they’ll consider buying more secondhand products if prices in apparel, footwear, and accessories keep rising.”
Brands and retailers are embracing resale to satisfy consumer demand, and resale is becoming an inevitable part of retail.
“Brands with resale shops increased 275% in 2021 compared to 2020, according to the Recommerce 100.”
“78% of retail executives say their customers are already participating in resale – up 16 points from 2020.”
“52% of retail executives say offering resale is becoming table stakes for retailers – up 16 points from 2020.”
“88% of retail executives who currently offer resale say it’s helping drive revenue.”
Quoted in the press release, thredUP CEO & Co-Founder James Reinhart said, “The last 10 years of resale were dominated by marketplaces, but brands and retailers are driving the next wave of secondhand. We’re still in the very beginning of this trend, but the acceleration of resale adoption is a positive signal with enormous benefits for the planet. This year’s report proves that with the collective power of conscious consumers, resale marketplaces, and forward-thinking brands and retailers, we can pioneer a more sustainable future for the fashion industry.”
For more, check out this video from KSHB 41 that demonstrates how brands are increasingly embracing the opportunities that can be found by dealing in secondhand.