Introduction to Recommerce
Are you looking to leverage the green wave in e-commerce but not sure where to start? Your answer may lie in tapping into a strategic practice that's gaining traction—recommerce strategy. At its core, recommerce is a subset of e-commerce that focuses on reselling used goods; however, its potential extends far beyond that simple definition. Recommerce strategies are becoming indispensable parts of successful online retail, catering to consumers' desire for sustainability, value, and unique finds, and they are projected to generate up to $33 billion in revenue by the end of 2022.
The global rise in popularity of recommerce is not a fluke; it's powered by shifts in consumer behaviour. Millennials and Generation Z—two substantial demographics—are championing the drive towards environmentally friendly and sustainable shopping options. Approximately 45% of millennials assert they're not interested in buying from non-sustainable brands and retailers.
As we delve into recommerce, we'll unpack its intricacies and potential, providing an in-depth understanding of the various aspects of recommerce and its inherent benefits.
Quick Take: Key Points about Recommerce Strategy
- Recommerce refers to the reselling of used goods online, with a growing focus on verticals like apparel, luxury items, home goods, sporting goods, and consumer electronics.
- Adopting a recommerce strategy can tap into the significant buying power of millennials and Generation Z, who are actively seeking environmentally friendly and sustainable shopping choices.
- Numerous sectors are exploring recommerce strategies to capitalize on the predicted $33 billion in revenue.
- Going beyond price consideration, recommerce offers unique opportunities to foster brand loyalty and customer satisfaction, often resulting in access to new audiences.
Time to embolden your Shopify store with a well-crafted recommerce strategy. Let's delve in deeper to understand this thriving space better and find ways of leveraging it for your business growth.
Understanding the Benefits of Recommerce
Recommerce is not simply a buzzword in the retail industry; it's a approach that offers a bevy of benefits, ranging from economic advantages to environmental impact and customer engagement. With recommerce, we at First Pier believe that brands can not only tap into a new market segment but also make a significant contribution to sustainability.
Economic Advantages of Recommerce
Recommerce presents an opportunity for businesses to unlock a new revenue stream. According to a report, recommerce is expected to generate up to $33 billion in revenue by the end of 2022. The strategy allows brands to sell preloved items at a lower price point, reaching a wider consumer base. It's also a way for buyers to access luxury goods and premium brands at a more affordable cost. Companies like 1st Dibs and The RealReal have successfully leveraged this approach to breathe new life into high-end items, thus creating an economic cycle that benefits both the seller and the buyer.
Environmental Impact of Recommerce
The environmental benefits of recommerce are substantial. In a world increasingly concerned about sustainability, recommerce is a green alternative that reduces waste and conserves resources. As reported by the World Economic Forum, consumers are buying more clothes than ever, yet keeping them for only half as long. By facilitating the resale of these items, recommerce mitigates the environmental impact of rapid consumption. It's a strategy that resonates with the eco-conscious consumer and helps brands gain a competitive edge in today's sustainability-focused market.
Customer Engagement and Recommerce
Recommerce also presents an opportunity for brands to engage with customers in a unique and meaningful way. It's not just about selling a product; it's about promoting a lifestyle that values sustainability, affordability, and conscious consumption. This resonates particularly with millennial shoppers, 45 percent of whom say they're not interested in buying from non-sustainable brands and retailers. By integrating recommerce into their business strategy, brands can foster deeper connections with their customers, encouraging brand loyalty and repeat purchases.
Implementing a recommerce strategy is about more than just repurposing used items; it's about embracing a new business model that aligns with today's consumer values and market trends. As your partner in Shopify development and optimization, we at First Pier can guide you through the process, ensuring you reap the full benefits of this innovative approach. We encourage you to visit our ecommerce strategy guide to learn more about how to navigate the digital landscape effectively.
The Difference Between Resale and Recommerce
As you explore innovative strategies to grow your online business, it's crucial to understand the subtle differences between terms that may seem synonymous. In this case, we'll clarify the distinction between resale and recommerce, two closely related but distinct concepts in the ecommerce landscape.
Defining Resale and Recommerce
Resale refers to the practice of selling previously owned items, typically through online marketplaces or secondhand stores. The appeal of resale lies in its simplicity and accessibility, allowing individuals and businesses to recirculate goods and extract value from items that might otherwise be discarded.
On the other hand, recommerce expands upon the resale model by incorporating elements of refurbishment, repair, and rebranding. It's a sales model that involves buying back used products from customers, refurbishing them if necessary, and then selling them again. Recommerce can span many different types of items, from clothing and tech gadgets to furniture and art.
Recommerce is becoming increasingly popular among retailers, particularly in the fashion industry, as it provides a sustainable solution to the problems of overproduction and waste. For example, lululemon’s Like New program allows customers to trade in their gently used lulelemon gear for store credit, promoting brand loyalty and sustainability.
How Recommerce Revolutionizes the Resale Format
While resale programs often allow customers to return used products for money or discounts, recommerce takes this a step further. It's not just about reselling previously owned items—recommerce involves upcycling, restoring, and even adding value to used goods before reintroducing them to the market. Recommerce revolutionizes the resale format by transforming used items into new, desirable products.
Recommerce is not just a strategy for sustainability; it's also a way to engage customers and generate new revenue streams. Retailers often find new and exciting ways to revolutionize the recommerce format, from offering trade-in programs and subscription services to creating exclusive collaborations with popular brands.
By understanding the difference between resale and recommerce, you're better equipped to develop an effective recommerce strategy that aligns with your brand values while meeting the demands of today's eco-conscious consumers. At First Pier, we offer the expertise and resources to help you navigate this exciting frontier in ecommerce.
Successful Recommerce Strategies in Retail
A successful recommerce strategy can turn used items into a profitable venture, not only adding another revenue stream but also enhancing a brand's image as a sustainable entity. Let's look at three case studies to understand how different retail brands have implemented recommerce.
Case Study: Verizon's Certified Pre-Owned Devices
Telecommunication giant Verizon has successfully integrated recommerce into its business model, leveraging the growing market of refurbished smartphones against the backdrop of increasing carbon consciousness among consumers. With nearly 6.8 billion smartphone users worldwide, the potential for recommerce in this sector is immense, particularly when you consider the environmental repercussions of producing new devices.
Verizon's recommerce strategy focuses on selling "certified pre-owned" devices on its website. These devices are categorized into four levels of cosmetic acceptability - "like new," "great," "very good," or "good." Each device undergoes a rigorous check for battery and port functions, as well as Bluetooth and Wi-Fi capabilities, before being listed for sale. This is all backed by a 90-day warranty to establish trust among potential buyers.
The company's trade-in program encourages customers to turn in their old phones for credit towards a new purchase, giving their old devices a new lease on life while driving sales. This strategy not only fosters customer loyalty but also keeps potentially harmful electronic waste out of landfills, furthering Verizon's commitment to sustainability.
Case Study: Ikea's "Buy Back and Resell" Program
Ikea, a brand synonymous with affordable and stylish furniture, has long championed sustainable practices. Their recommerce initiative, known as the "Buy Back and Resell" program, allows customers to return selected, fully functional pieces in exchange for a store credit worth 30 to 50% of the original price.
The program was made permanent at Ikea's 37 U.S. stores following a successful pilot test in 2021. While it excludes items like mattresses and sofas, products like cabinets, desks, tables, and others are accepted, making it a viable option for customers looking to update their interior decor.
By offering a substantial return on used furniture, Ikea not only encourages a cycle of reuse but also deepens its customer relationships by providing tangible value.
Case Study: Levi's Secondhand Shop
Levi's, the iconic denim brand, has also hopped on the recommerce bandwagon with their Secondhand Shop. This initiative allows customers to buy and sell pre-loved Levi's clothing, thus extending the life of garments and reducing the carbon footprint associated with new production.
Each item in the Secondhand Shop is thoroughly inspected and refreshed before being listed for sale, ensuring customers receive a quality product. This approach not only promotes a circular economy within the fashion industry but also caters to an increasingly eco-conscious consumer base.
In each of these cases, the brands have successfully integrated recommerce into their retail operations while enhancing their commitment to sustainability. However, implementing a successful recommerce strategy requires a deep understanding of your product value, customer demand, and the ability to establish trust in your resold products. At First Pier, we can help you navigate these complexities and develop a recommerce strategy that aligns with your brand values and market dynamics.
How to Implement a Successful Recommerce Strategy
Launching a successful recommerce strategy involves five key steps - assessing the value and demand for your products, establishing trust in resold products, managing supply chain and quality control, integrating recommerce into your retail operation, and promoting your recommerce program. Let's delve into each of these steps.
Assessing the Value and Demand for Your Products
Before you start buying back items, determine which products will sell and how to source them. As our topic expert Steve suggests, the type of product you'll sell is crucial. Instead of sourcing items yourself, you can offer a buyback or trade-in program through your retail locations. This way, you get the right inventory brought to you, and it opens up an opportunity for a profitable vendor relationship and repeat business.
Establishing Trust in Resold Products
Trust is critical in the recommerce business. Customers need to be confident that the used items they're purchasing are of good quality. A grading scale can be a useful tool to maintain quality control. For example, items can be categorized as 'like new', 'very good', 'good', and 'acceptable', based on their condition. Set your definitions for each condition and determine which conditions you'll accept. This approach can help ensure that you maintain high-quality expectations for your customers.
Managing Supply Chain and Quality Control
Ensuring the quality of goods is paramount in recommerce. Purchasing inventory from customers gives you flexibility in the items you accept. You may even accept items in poor condition to refurbish or restore yourself. However, keep the costs of restoration in mind when setting your prices to protect your margins.
Integrating Recommerce into Your Retail Operation
Once you've determined which products to sell and how to acquire them, the next step is to integrate the recommerce program into your retail operation. This includes pricing the goods, incorporating the new SKUs into your inventory, and listing the products online. Handling your recommerce program seamlessly at point-of-sale is critical for a positive customer experience. A unified commerce platform that connects all of your core retail systems can make the entire process seamless.
Promoting Your Recommerce Program
Marketing your recommerce program effectively is crucial for its success. Utilize your social media platforms, email marketing, and other digital marketing strategies to promote your recommerce program. Additionally, consider partnering with influencers or running online contests to boost engagement and visibility for your brand.
Implementing a successful recommerce strategy can be challenging, but with careful planning and execution, it can yield significant benefits for your business. At First Pier, we're committed to helping you navigate these complexities and develop a recommerce strategy that aligns with your brand values and market dynamics.
Leveraging Technology for Recommerce
In the era of digital transformation, technology plays an essential role in implementing and managing a successful recommerce strategy. From inventory management and quality control to customer engagement and sales optimization, the right technology can make your recommerce operation more efficient and profitable.
The Role of Unified Commerce Platforms in Recommerce
Unified commerce platforms provide a streamlined and integrated approach to managing your retail operation, including your recommerce program. These platforms connect all of your core retail systems, making the entire process seamless and efficient. For example, the FieldStack platform offers end-to-end retail management, from inventory control and sales tracking to customer engagement and analytics.
This integration is particularly beneficial for recommerce, as it allows for easy tracking of second-hand inventory, efficient processing of buy-backs or trade-ins, and effective promotion of your recommerce program. By unifying your retail operation, you can provide a seamless customer experience, optimize your profits, and maximize the potential of your recommerce strategy.
How Shopify Can Support Your Recommerce Strategy
Shopify is a robust ecommerce platform that offers a wealth of features to support your recommerce strategy. It provides an easy-to-use interface, advanced marketing tools, and a vast App Store with over 4,000 apps designed to enhance your store's functionality.
For recommerce, Shopify's extensive features can be leveraged to facilitate the sale of pre-loved items. Not only can you sell second-hand inventory directly from your Shopify store, but you can also integrate with third-party marketplaces such as Poshmark or ThredUp, expanding your reach to their established customer bases.
Shopify's mobile optimization is another crucial feature for recommerce. With more people shopping online via their smartphones, ensuring a seamless and user-friendly mobile experience is critical.
Most importantly, Shopify's analytics and reporting tools can provide valuable insights into your recommerce operation. By tracking sales, monitoring customer behavior, and analyzing market trends, you can make data-driven decisions to optimize your recommerce strategy.
At First Pier, we're experts in Shopify development and optimization. We can help you leverage Shopify's powerful features to implement a successful recommerce strategy, tailored to your specific business model and customer base.
In conclusion, technology is a crucial component of a successful recommerce strategy. By leveraging unified commerce platforms like FieldStack and ecommerce platforms like Shopify, you can streamline your recommerce operation, provide a seamless customer experience, and maximize your profits. As we continue to navigate the ever-evolving landscape of retail and ecommerce, the integration of recommerce into your business strategy can be a game-changer.
Conclusion: The Future of Recommerce and Your Business
As we've explored, the recommerce trend is gaining momentum, driven by both consumer demand for sustainable practices and the economic opportunity it presents. However, the success of this model hinges on a well-crafted recommerce strategy that aligns with your overall business goals and customer needs.
The Potential of Recommerce for Retailers
Recommerce is projected to generate up to $33 billion in revenue by the end of 2022. This significant growth is not just offering retailers a new revenue stream but also a chance to attract and retain a demographic that values sustainability and affordability. As we mentioned earlier, 45% of millennials are not interested in buying from non-sustainable brands and retailers. So, this is a significant opportunity for brands to not only meet their corporate social responsibility goals but also boost brand loyalty and customer satisfaction.
How Recommerce Can Help Sustain the Planet and Grow Online Sales
Recommerce, when approached thoughtfully and strategically, can serve as a win-win for both retailers and the planet. Not only does it provide a new life for pre-loved items, but it also reduces the environmental impact of production and waste. This green approach to retail can significantly contribute to a company's sustainability efforts while simultaneously driving sales.
By offering high-quality, pre-owned products at affordable prices, retailers can attract a wider customer base and foster long-term loyalty. Moreover, with the right communication strategy, recommerce can be a strong selling point that sets a brand apart in today's crowded retail landscape.
Final Thoughts on Recommerce Strategy for E-commerce Businesses
Embracing recommerce is more than just a trend - it's a strategic move that aligns with evolving consumer expectations and the push towards more sustainable retail practices. However, it requires careful planning, a deep understanding of your customers, and the right tools to succeed.
For ecommerce businesses, platforms like Shopify can play a pivotal role in implementing a successful recommerce strategy. As we've emphasized in our ecommerce strategy guide, continuous improvement, data-driven decisions, and customer-centric approach are key to ecommerce success.
As we look towards the future, it's clear that the recommerce model is here to stay. By integrating it into your ecommerce strategy, you can future-proof your business, stay competitive, and contribute to a greener planet.
For more insights and guidance on ecommerce strategies, don't hesitate to explore our ecommerce content strategy page and ecommerce digital marketing strategy page. Together, let's create a sustainable and successful future for ecommerce.
