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If fashion companies are still sleeping on peer-to-peer reselling, it may be time to wake up.
According to new research published Monday by resale-as-a-service platform Recurate in partnership with social impact agency BBMG, consumers are increasingly opting for branded resale.
Of the 11,000 adults surveyed in a dozen different markets around the world, including Australia, Canada, France, Germany, Italy, the United Kingdom and the United States, three-quarters (74 percent) said they were involved in the clothing business to some extent. .
While industry types often think of sustainability initiatives as expensive or difficult to measure, offering a peer-to-peer platform is a “relatively low-cost, low-resource” opportunity to tap into a market expected to surpass $82 billion by 2026. said Karin Dilley, Vice President of Recurate Partnerships in the United States alone.
“There’s no need to build that warehouse,” Dilley said. “You don’t have to return all the items and things like that.”
Survey respondents cut across age, gender and socioeconomic lines, and remarketing has led to a long-standing myth that it’s primarily a conscious view of Gen Z and younger millennials, Deeley said. Although it is true that the “circular” cohort—that is, people who buy and sell secondhand at the same time—come out of these younger demographics, so-called retrade “participants” or both resist simplistic behavior.
“Our data is kind of wrong; people have been buying and selling gay for a long time,” said Deeley, who used to work at luxury auctioneers at Sotheby’s. “What’s really driving the technology, so I think that’s why it’s the younger demographic that’s engaging with it now, because, you know, At Sotheby’s, the minimum price they sell for is $20,000, which is a very high bar.
Another common misconception is that people are hunting for manufactured goods. The survey found that 64 percent of shoppers and 55 percent of retailers sell mid-priced brands like J.Crew, Lululemon and Nike, followed by 40 percent of shoppers and 42 percent of retailers like Gap, H&M and fast fashion brands. Zara alone 28 percent of consumers and 27 percent of sellers, in fact, shopped with luxury names such as Chanel, Gucci and Supreme.
Although 71 percent of recycling participants are concerned about their impact on the planet, promoting Mother Earth was not at the top of their priority list. Because of the environment, 12 percent of consumers and 15 percent of sellers are engaged with seconds. Most consumers (22 percent) bought pre-owned as a way to save money. The No. 1 reason people sell their jewelry (23 percent) is to get rid of unworn items.
Repeater and BBMG have confirmed that offering a peer-to-peer option is not only the fastest way for brands to own their product’s entire lifecycle, but also the most desirable. About 90 percent of circulars and 80 percent of participants said they believed in brand-led resale rather than second-hand marketplaces. Sellers also choose because they can retain most of the item’s value, which is an important driver of their behavior.
But brand-managed resale, where brands return old items for cash, credit or discounts, also has its advantages, Deeley said. Companies may want to start a returns program for high-value items, perhaps with digital IDs, or to make them available for shipment at brick-and-mortar locations. With this more practical approach, you can standardize the cleaning and maintenance component or offer the option to recycle worn-out clothes. Ultimately, she says, there is no one-size-fits-all solution, and Recure’s goal is to develop resale models that can coexist.
“There’s a smorgasbord of ways to communicate with your customer,” Dilley says. “So when we talk to brands about our technology, really, what are your end goals? How do you want to connect with your customer?”
Even if brands do it, taking ownership of their products will increase their level of stickiness, he said. Case in point: 75 percent of people surveyed by Recurate and BBMG said remarketing increases their brand loyalty and frequency. Another 85 percent of circulars, 74 percent of consumers and 69 percent of sellers said they would try a new brand if second-hand was an option.
For brands that spend on acquiring new customers, remarketing can accomplish the same thing at a “much lower cost” than traditional marketing channels, including social media, said Adam Siegel, founder of Recuret.
“The real advantage is not in the immediate transaction – you know, buying and selling second-hand goods,” he said. “It’s more of an opportunity to engage your customer, give back to your ecosystem and increase customer loyalty.”
For Siegel, who considers himself a “deep green” environmentalist, finding value in the “second, third and fourth sales” of products has the potential to displace the production of new goods, allowing brands to cut profits from constant churn and, as a result, less waste. Today’s generation enjoys a fast pace of consumption, with even 72 percent of repeat business shoppers picking up items every two to three months, the study found. Reselling allows people to scratch that itch without shelling out new resources. And as remarketing becomes more prevalent, they’ll start looking for brands that sell high-quality products because they have higher resale value and stay in circulation longer.
Siegel likens this to the automobile industry, where people buy cars based on resale value. Consumers may initially be willing to pay more for an item if they know they can snag a better price down the road. In the case of brands, their ability to offer remarketing at a slightly reduced price is also a testament to the quality of their products.
Meanwhile, the two-year-old company is keeping busy. In May, Recurate raised $14 million in Series A funding led by Chicago-based investor Leap Capital. He currently works with more than 50 brand partners, including Another Tomorrow, Frye, Mara Hoffman, Known Outsider and Steve Madden. By the end of the year, he hopes to board another 50.
Brand-driven reselling is still a relatively new concept, and requires a different way of thinking, Siegel said. But while Recuret previously had to educate companies about resale market opportunities, brands are now knocking on the door.
“It’s now being published as brands … and I think that will continue for some time,” he said. I think they all came to recognize the growth of the market.
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