We’ve all been there. We fell in love with a dress, a party shirt, a mid century lamp that would have been the perfect look for that big event, or made the final accent to a new room redesign. Of course, when you have a little extra cash to make the purchase, the item you were looking for is out-of-stock or out of season and it will never be back. Enter the magical world of recommerce.
A few years ago, our only option when we were searching for that hard-to-find dream product used to be eBay. But eBay, with its virtually vintage-looking UI and 3-day bidding excitement, has more of the feel of a treasure-hunt-in-a-yard-sale than the high-end silk-dress-for-a- summer-wedding-in-Puerto-Vallarta vibe. Consumers clearly have a desire to shop for special items in a sleek environment, even if they’re not shopping for something new. And the recommerce industry has taken notice, and created digital experiences that align with a shopper’s desire for luxury – for a price point that is far more affordable.
Wait, What’s Recommerce?
Let’s take a step back. Recommerce? What exactly are we talking about here? Recommerce has cropped up as of late and has been creating quite the buzz as a subset of the eommerce market as a whole.Simply put, recommerce is just the reselling of used consumer goods, and has been most popular in apparel, luxury items and home goods – but many verticals like sporting goods, electronics and the like – have started to jump on the trend. Analysts predict that the recommerce explosion could generate up to 33 billion in revenue by the end of this year. With sustainable goods taking up a larger market share, and the economy feeling more volatile than ever, consumers are looking at greener, more affordable options to meet their needs and recommerce is the perfect fit.
Good for the Planet is Good for the Consumer
When we’re talking about sustainability, the stats can’t be ignored. 45% of millennials say they refuse to buy from non-sustainable brands and retailers. That’s a huge chunk of buyers looking for options that are safer for the planet. It’s also a massive opportunity for brands and retailers to update their strategy to drive brand loyalty over time. The World Economic Forum estimates that clothing production has roughly doubled in the last 20 years; people bought 60% more garments in 2014 than in 2000, but kept them for only half as long. It’s clear that showcasing authenticity and proving that a brand cares about the world around them isn’t just the right thing to do – it’s drives the bottom line in the right direction for the right reasons.
Giving Buyers a Chance to Get Fancy
Recommerce also gives consumers a chance to purchase luxury goods that might have been out of reach had they tried to make a net new purchase. Large items like furniture and items with more scarcity like fine art and designer handbags have a second life when they are offered up on luxury marketplaces like 1st Dibs, The RealReal and the Vestaire Collective. These new options also allow a whole new subset of consumers to invest in luxury, as the resale value of a lot of the aforementioned items tends to stay fairly stagnant – and can even rise with items such as fine art and vintage home goods. Luxury brands do have the challenge of needing to control recommerce in order to maintain their brand equity, but by partnering with third-party sites and offering up authenticity guarantees, their brands get to reach new audiences that might not have had access before. Everybody wins.
Not Just Clothes and Furniture
With supply chains tightening globally, and resources diminishing, recommerce has a multitude of use cases that could ease the need of the consumer in ways we didn’t initially anticipate. Companies like 1800Wheelchair.com have been able to place wheelchairs in the hands of people in need by creating marketplaces for the medical field. With electronics waste on the rise, people are finding new uses for out-of-date mobile phones and computers – and unearthing reusable resources by tinkering with and taking apart older models of items folks generally tend to send to the dump. It’s not just about building new things by creatively using older pieces – it saves valuable materials – and cash. Some folks have even taken to the electronics recommerce market by selling wholly new gadgets made out of old parts, thus driving an entirely new market that has compounding benefits.
Brands Have Taken Recommerce into Their Own Hands
Some brands, like lululemon and Levi’s, have been savvy right out of the gate with their recommerce strategies. lululemon, who’s brand relies on reaching a consumer with a wellness mindset, has created “Like New” reselling options on their website that also stress cleanliness and quality to reassure their discerning customers. Anything that doesn’t meet their standards is responsibly recycled, driving a two-pronged sustainability approach. Levi’s, who’s brand has always maintained a classic Americana feel, launched their Levi’s SecondHand program, which double clicks on the longevity of their denim and aligns to the vintage-cool that makes Levi’s a standout brand in the apparel industry. With big names like that investing in reselling, it’s only a matter of time before more recognizable names make the jump as well.
More Metrics that Support the Recommerce Rise
Don’t just listen to us. The whole market, as we mentioned, has taken notice of this new trend and all the options that it affords to the everyday shopper and the companies vying for their interest. Companies like Trove are seeing huge rounds of funding for their reseller startups, upwards of $70 million. ThredUp reports that 233 million consumers are willing to buy secondhand when given the chance in an easy-to-navigate marketplace. ThredUp also reports that recommerce is expected to grow by 127% by 2026, growing 3X faster than the whole apparel market overall. That’s more than double digit growth, and could reach an $82 billion market share. Reports in Asia are showing massive numbers that claim that up to 92% of consumers have purchased secondhand, like-new products from everyday sellers. These numbers are impossible to ignore, and when you look at the industry from this lens, this is less of a trend and more a full-blown consumer shift in the way we shop.
What Does that Mean for Lucidworks?
All of this change usually means that the systems that support the sites starting to dip their toes into reselling also need to keep up or transform. Since reselling is truly about precision when a customer is looking for something on a recommerce site, search becomes more important than ever, since inventory can be singular, and query complexity can be unique. This requires more than a simple search solution. Automation through machine learning would do a lot of the query rewriting heavy-lifting, and recommendations when a specific item is not available (but something similar could be suggested) would drive sales when a consumer would usually leave and hit up another site. Semantic vector search technology could also increase average order values by suggesting whole secondhand outfits with similar colors and brands or living room accessories with the same atomic vintage vibe. Dynamic facets that respond to ever-changing inventory would automatically reorder so that the most high-value luxury items or interesting gadgets were at the top of a customers filters. And, because sustainability is such a large part of recommerce, this is search with a cause and it would behoove companies driving green initiatives to invest in technology that allows shoppers to buy with the planet in mind.
Want to learn more about how Lucidworks best in class insight engine can support your recommerce interests? Contact us and find out.
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