Recommerce

Recommerce: Future of Retail

Recommerce is nothing new- people have bought and sold used goods for decades. Recommerce is now however becoming a focus for the sustainability movement, with extending the life of products a vital tool in reducing waste.

Definition of Recommerce

Recommerce [re-comm-erce]

  1. The resale of a previously owned product

What is Recommerce?

Recommerce is nothing new. Markets, car-boot sales and second-hand shops have been reselling products for years. What has changed is the utilisation of the internet to centralise, coordinate and provide global access to this market.

The launch of eBay in the mid-1990s is potentially the birth of what we today refer to as ‘Recommerce’ and also a pivotal moment in the sustainability movement. The ability to resell unwanted products through online auctions turbo charged the market, creating an extended lifespan for products otherwise destined for landfill.

Since the nineties, Recommerce has expanded and evolved, with both consumers and businesses competing for a piece of this $24 billion USD market.

Source: 2019 Resale Report: https://www.thredup.com/resale

C2C Recommerce

This consumer-to-consumer (C2C) market was the birthplace for Recommerce. Transactions previously isolated to face-to-face meetings became digitalised through platforms like eBay. Bloomberg reported an estimated USD 23 billion of merchandise was sold globally by eBay in the 3rd quarter of FY18/19 alone.

When you then consider other platforms like Gumtree, plus the exponential rise in peer-to-peer (P2P) selling via social media, the value of the product being re-sold and re-used rather than thrown away is estimated to be worth AUD 34 billion in Australia alone.

Outside of these mainstream platforms, the growth in C2C Recommerce within niche industries have further fuelled the movement. Sneakers is a great example, with a market once isolated to monthly swap meets, now booming online through apps like Stock X, Goat and Grailed.

Now clearly none of these platforms were started for sustainability reasons, however, their continued success is becoming due to the eco-minded consumer. Price led customers looking for a good deal creates the C2C/P2P market, corporate investment looking for a slice of profits funds its expansion, but the growth of eco-minded consumers will sustain its future.

Increase in consumer demand for sustainable products 2013 vs 2018
Increase in consumer demand for sustainable products 2013 vs 2018

B2C Recommerce

The most recent, and potentially most exciting, is B2C Re-Commerce, with brands beginning to realise they can be directly involved in the reuse of their products. If their products are initially made to last, there is no reason why brands cannot extend the lifespan of said products, rather than solely focusing on selling new items.

By repairing and refurbishing used products for resale, whether those products are faulty or traded-in, the lifespan of the product can be extended. Sustainability innovators within fashion including Patagonia and Finisterre have always offered repairs for customers to extend the life for that individual customer. The change is where brands are now buying back the used product, most commonly using store credit, for refurbishing and resale to another customer.

Recommerce Side Effects

Regardless of the reason, Re-Commerce can only be a good thing, right? There are arguments the increased ease of selling via the second-hand market can increase the demand for new goods. The theory is based around consumers using items for a reduced period before buying new, driven by the improved ability to resell the used item.

This point aside, extending the life of the products we use is the number one priority for the sustainability movement. While Recycling is a clear focal point and hugely influential, it is a secondary goal. Extending the lifespan of products reduces the strain at both ends of the system.

B2B Recommerce Schemes

C2C Recommerce Scheme

Further Reading: The North Face enter the Recommerce market with The North Face Renewed.