Using resources more efficiently and living a sustainable, environmentally-friendly life is becoming a higher priority for people across the globe. Nevertheless, people still want to look good. And, unbeknownst to most consumers, the fashion industry has a host of environmental impacts stemming from the production, transportation and retailing of goods.
But something is changing.
The concept of the circular economy (described below) has helped fashion and apparel brands respond to consumer demands for sustainability. The result is ‘recommerce’, and in this blog, we’ll explore how it works, why it’s becoming so popular in 2022, and how the key players are using technology to make it happen.
What is recommerce and the circular economy?
To understand recommerce specifically, it’s firstly important to define exactly how the circular economy works.
The circular economy aims to keep as many products and materials in practical use as possible by finding other ways to use them - or other people to use them - thereby avoiding waste. Beyond reducing environmental degradation through landfill waste, this model also introduces the potential to reduce the number of new products created, therefore slashing emissions generated from manufacturing & logistics.
Based on this principle, recommerce has gained traction in recent years as a way of buying pre-owned goods - but the opportunity has accelerated as a result of advances in digital technology. From furniture to art and from home appliances to sunglasses, almost anything you can think of is now freely traded in places like eBay and Craigslist - with fashion being no exception. However, the vintage stores and charity shops of yesteryear are now being reborn as cutting edge web platforms.
What is fueling the popularity of recommerce for fashion?
Recommerce for fashion is becoming increasingly popular among people of all ages and financial demographics. But in particular, its success is being powered by younger consumers because of their wish to embrace sustainability: indeed, nearly three-quarters of Millennial consumers say they prefer to buy things from sustainable brands where possible.
Fashion retailers have had to respond to this desire, and reposition their brands to allow customers to buy pre-owned apparel through their own platforms. Doing so brings a host of benefits to retailers, including:
Improving brand credentials around sustainability
Building stronger and longer lasting relationships with customers
Retaining control over products throughout their lifecycle
In fact, this multimillion dollar business interest in recommerce is pushing the global fashion market to new heights. A market that was worth $24 billion as of October 2020 is expected to be worth more than double that by 2023.
Who are the key players in fashion recommerce?
Several businesses are making significant investments to win the online recommerce market, and they can be divided into two distinct categories.
This category includes scale-up companies that are new, digitally native and laser focused on recommerce - think of brands such as Depop, Vinted, Poshmark and Thredup. Their marketplaces facilitate peer-to-peer sales of items that some consumers no longer have any use for, but would be cherished and given a new lease on life by a new owner. Consumers can quickly search for the product they like based on type, color or even label, and enjoy a buying experience that is online, convenient and trusted.
Another key advantage of these peer-to-peer platforms is that they break down geographical barriers of fashion trends. The France-based platform Vestiaire Collective, for example, is popular with American shoppers who can access European designs they likely wouldn’t find otherwise in US stores.
The second category of recommerce players encompass existing fashion firms who have embraced recommerce in an attempt to bolster their offerings while building larger relationships with existing customers. An excellent example of this is Urban Outfitters, who recently launched their own platform for resale called Nuuly Thrift. While users can explore recommerce items in the usual way, some physical stores are also integrated into the platform to offer a hybrid experience. Several other leading brands are following a similar path, in an attempt to offer the best omnichannel experiences possible to their customers.
What does recommerce mean for the future?
Over the coming months and years, recommerce will continue growing in demand at an increasingly exponential rate. The model is set to disrupt business as usual for retailers around the world, and the bets on who will corner this market are being placed today.
As with any disruptor that redefines industries and reshapes the way we live, early investment in technology and innovation is crucial. Those who can quickly bring new features and offerings to the market stand the best chance of differentiating themselves and gaining a first-mover advantage.
Ciklum’s expertise in building industry-defining marketplaces and differentiated digital experiences makes us your perfect partner for online expansion and transformation. Get in touch with us today and find out how we can drive your innovation forward.