The resale market is famous in retail for three things:
As odd as it sounds, resale just doesn’t seem to be sustainable.
We spoke to three resale experts to discover some of the reasons behind resale’s growth potential – and what needs to be solved to give it the best chance of success
eBay has been around for nearly 20 years. Vestiaire launched in 2009, and The RealReal and Depop came only two years later.
But resale has undeniably increased in popularity recently. Consumers – especially Gen Z – care more about the impact of their consumption footprint on the planet, the source of the things they buy, and are more likely to let these factors influence where and even whether they shop.
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"Resale is a relatively easy way to ease that guilt [about our part of the climate crisis] because it doesn't really require a huge shift in your own behaviour ." Zoe Rowswell, Tern Eco |
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“There is a very genuine and pressing concern [amongst Gen Z] about 'what are the steps that I can take to make an impact?' and by engaging in fashion resale, it's something very tangible. It's there in their wardrobe." Harriet Scriven, Re-Style |
But this has taken a further step recently: shoppers now even take an item’s resale value into account when considering a purchase – especially in the luxury market.
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“There is a desire to own products that retain value. It is quite new for consumers to think first about whether they can resell an item before even buying it." Felix Winckler, Reflaunt |
This is a key stage in resale’s maturity. It is now mainstream - not just in volume and value of sales, but in consumers’ psyche, who will at times even anticipate using the resale market.
And yet, resale’s commercial success remains in question. Why?
Resale is indeed the new ecommerce.
Not just in its commercial potential, level of investment, or how today’s buyers are voting with their feet — but unfortunately also in how difficult it is perceived to be.
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“While most retailers recognise [resale] is the direction of travel, I think there is a common perception that the perceived level of change required just seems too hard – and a distraction from the day job.” Zoe Rowswell, Tern ECO |
Surprises are almost always unwelcome in logistics. But in the resale model, supply chains are irregular in timing, nature, quality and volume.
A resale retailer will typically receive single SKUs directly from consumers - not the deliveries of hundreds or thousands of pre-planned items they are used to. Incoming items may be pristine or unsellable. They might be perfect for the season, or months out of date. They might need refurbishment, or be beyond repair.
Managing the resources to process, store, market and sell these items, when almost nothing about them can be predicted, is something that traditional retailers are rarely prepared for. And for start-up resale-centric platforms, the upfront costs involved to smooth out volatile cashflows will often be the reason why they struggle, even fail.
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"The traditional fulfilment model is to have stock on pallets, neatly stored, and single SKUs that are sent out of the warehouse to your customers. Here the flow is much more complex." Felix Winckler, Reflaunt |
Resale items are notoriously difficult to price.
Pricing new items is formulaic. But when an item is pre-loved, pricing benchmarks simply do not exist. Once an item is second-hand, how much cheaper should you expect it to be than its new equivalent? How much should be taken off for any damage? In some cases, pre-loved items are even more expensive than when they were new!
Because there are no widely-accepted benchmarks, how does a pre-loved retailer price their items accurately, and predict the best price that a customer will accept? The win-win scenario is almost impossible to find.
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"Because the market is so fragmented, it's pretty labour-intensive to try and pull insights together as to what is going on and where pricing is at. Plus the condition of individual second-hand items makes pricing even harder." Zoe Rowswell, Tern Eco |
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"The whole ball game is to play arbitrage and figure out the right value for each item. It's a fine balance between being competitive and getting the largest return on an item." Felix Winckler, Reflaunt |
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"There is no set way of measuring how [luxury pieces'] value has changed over time. Chanel for example goes up in value, the older the pieces. Remember you see people buying luxury as an investment - so then how do they release that investment? You have to resell it." Harriet Scriven, Re-style |
All is not lost! Yes, there are obstacles to resale’s growth. But there is also a sophisticated, experienced and growing community of tech providers dedicated to solving these problems.
See our case study with Thrift+, where we cleared slow-moving stock in record time while offering only half as much discount.
Or read about RESPONSIBLE, for whom we added £10 to every basket – equating to 6.4% additional margin.
Integrating within a brand’s own website, the Tern service is available globally, works for (nearly) any product, and is priced to be both affordable and accessible for retailers of any size.
Reflaunt equips brands and retailers with resale e-commerce and tailor-made branded marketplace technology and operations solutions, as well as access to its largest global network of more than 30 resale marketplace partners and more than 100 million second-hand customers.
They also work with retailers to reduce customer returns via directly referring customers to RE-STYLE’s marketplace as a sustainable and cost-effective alternative to sending back their order.
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