According to top executives from re-commerce companies, the Circular Economy is growing. The circular economy includes both resales as well as rental services.

Important Figures

ThredUp, a resale platform, released its 2019 trend report. According to this report, resale experienced 21 times quicker growth compared to the overall apparel market in the past three years. Projections indicate that in the next three years, it will reach $51 billion.

ThredUp also found an increased willingness among shoppers to buy from their favorites stores when off-prices were offered. At the National Retail Federation’s Big Show, Anthony Marino, the ThredUp President, cited that more than 60 million in the United States buy secondhand just this year. Just a few years ago, that figure was 40 million. Additionally, among Gen Z, one out of three buys secondhand.

Luxury Gains

The growth of re-commerce is occurring across nearly every industry segment, but the Luxury market seems to be experiencing the most significant increase. A recent report from Fashion for Good and Accenture Strategy indicated that the re-commerce operating margins for luxury sectors were 39 percent. By comparison, they were 28 percent and 22 percent for the premium and mid-market sectors, respectively.

The luxury market is particularly popular because it lets people who have always wanted to buy a particular product be able to afford it. They cannot purchase it full price, but they can when it is resold later for a discount.

Luxury Considerations

Rebag’s CEO and founder, Charles Gorra, spoke during the same Big Show panel, explaining how luxury resale appeals to shoppers. While many of the re-commerce brands operate as a peer-to-peer marketplace, Rebag buys the goods from consumers and then sells them. The company also uses authentication measures to ensure all products are indeed the luxury bags they claim. This is important as, in the past, luxury brands have criticized resellers, accusing them of not meeting high enough standards for authentication.

The Environment Plays a Role

It should come as no surprise that in addition to the savings associated with the re-commerce trend, a great deal of its growth comes from the increase in environmental awareness. The environmental impact of a resold item is much less than that of an original article.

Those environmental concerns also relate to the rise in services like Rent the Runway. That company’s CEO said at the same convention that while previously people felt pride in ownership, they now feel pride in access. They no longer feel the need to own the luxury items, as just being able to access them is enough.

Source:

https://www.retaildive.com/news/its-happening-in-a-big-way-the-future-of-re-commerce-in-retail/570481/

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