Recommerce is the process of selling new or used products that were previously owned by another. Typically, this would be electronics or different types of media. Here we will discuss how is the rise of Recommerce.
There has been a rise in recommence. The reason for this simply is, buying second hand is much cheaper and more sustainable. You can save upwards of $500 on a phone that just came out 2-3 years ago by purchasing it from a website like eBay or Gazelle. Or, give clothes a new home rather than sending them to the landfill.
Why recommerce?
Between 2016- 2020, the sales of used smartphones grew by 26% in North America alone. This is expected to grow three times faster in the next five years.
There are a few reasons for this dramatic shift. The first one being, the price of brand new cell phones costing a pretty penny. The newest IPhone in 2022 costs between $800-$1200.
If you go on websites like Ebay and Gazelle, you can find refurbished two year old IPhones for $300. Saving you upwards of $500. Consumers are more comfortable with buying older phones because device life has become much longer than it used to be.
So, many older generation devices will work just fine for what most are going to be using them for. Especially with many households needing to be more budget friendly in these times. You can find clothes, school books, game systems, furniture, all for a discounted price.
Millennial and Gen Z’s effect
Now that the newer generations are gaining more buying power, they have more of an effect on the market. The newer generation has a huge spotlight on sustainability. Especially with trying to end fast fashion. 85% of clothes purchased by consumers end up in landfills.
By reselling clothes, we give them a new life and keep them out of our landfills. This creates an environment where people can easily find ethical outlets for their products and receive fair compensation. This does not only apply to clothes.
Anything can be sold on websites like,
- Poshmark
- eBay
- ThredUP
- Depop
- Offerup
- Facebook Marketplace
And plenty more. One of the reasons for the growth of these different reselling apps, is that buying second hand is no longer seen as lower class or undesirable. Many luxury brands are sold on these sites for a fraction of the price.
Even if you do not have a Gucci type of salary, you can still buy a Gucci bag. Many high end products come with certified reselling certificates, or the original tags so you know you are getting the real deal.
Recommerce market size
According to ThredUP’s 2020 Fashion Resale Market Analysis, Recommerce is projected to hit $64 billion dollars by 2024. Back in 2019, it was only at $28 billion.
Recommerce merchants are growing 20 times faster than the retail market.
Some of the reasons for the growth are
- It’s easy. Anybody can pick up their phone and list something on the facebook marketplace
- Extra cash. Many resellers make almost all of their living off of second hand buyers. College kids use it for extra cash, moms can give their baby clothes to another mom in need. Unlike retail, anybody can get into it, and it does not cost start-up money.
- Sustainability. As we spoke on earlier, there has been a huge push for sustainability and it is causing the recommerce market to grow rapidly.
Another cause of the extreme rise in the recommerce market is COVID-19. During this time, many were on strict budgets as they had lost their jobs or were not able to work because they were sick. Not only this, but with the stay at home orders, people had more time on their hands. This caused a rise in purchasing things second hand.
With the reselling market about to hit $64 billion, that is more than doubling its worth in 5 years. Reselling clothes was a good source of revenue for people that had lost their jobs, and buying was a good way to pass the time for the people who were stuck at home.
Effects on Retailers
With used clothing store sales growing by 37% from 2020 to 2021, we are left wondering, what does this mean for big box companies? The retail clothing industry decreased by 15% between 2019-2021. Now, this could just be a cause of the pandemic. However, getting into the resale game is a great idea for retail owners.
ThredUP specifically, has partnered with larger retailers like Macy’s and JCPenney. It has shown that having a resale option in stores helps boost sales. Customers on average spend 21% more and are 70% more likely to return.
One reason is that the resale side replenishes inventory every other week, while traditionally in retail new pieces only arrive four to six times yearly. Giving customers more options. We discussed how is the rise of recommerce.
Conclusion
The reselling market is booming and there does not seem to be an end in sight. With so many positives, it is no wonder that recommerce is becoming so popular. From giving people extra cash, to helping save the Earth, it helps consumers feel good. Hence we discussed how is the rise of recommerce.
We can do good for our planet, while also giving ourselves a little gift in the process. Without breaking the bank! And who doesn’t love that?
