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4 mistakes to avoid when setting up a resale channel for your business

12 May 2022

Resale is booming tremendously. We see brands announcing their new resale channel every day, and we see a lot of brands making the same mistakes. We listed them in this article so you can avoid them when setting up your own recommerce.

The rise of the resale market

Although buying second-hand was already gaining popularity before COVID-19 struck, the pandemic really accelerated the growth of the resale market. Right now we’re seeing consumers who combine tighter budgets (because of inflation) with a stronger desire for sustainable products. Maybe these consumers were clearing out their wardrobes during the pandemic, to find out they could very easily sell their used clothes through platforms like Vinted.

And then they discovered the art of finding the perfect second-hand catch. A lot of people are addicted to visiting flea markets. Now, many more people are addicted to the digital alternative: finding the perfect bargain on resale platforms. And it’s second-hand, so it must be sustainable. Guilt-free shopping at its best.

Enter the opportunity for brands: what if consumers wouldn’t buy their second-hand Hugo Boss shirt on Vinted, but on a dedicated Hugo Boss resale channel?

  • A greener image? Check.
  • Increased customer loyalty? Check.
  • A higher customer lifetime value? Check.

It almost sounds too good to be true. That’s probably the reason why, according to Forbes, the resale market is growing 11 times faster than traditional retail. Also according to Forbes, the resale market is projected to reach around 77 billion USD in the next five years.

Patagonia leads the way

When it comes to setting up a recommerce channel, fellow B Corp Patagonia led the way in the apparel industry by launching Worn Wear in 2017. In an official statement, Patagonia claimed: “Worn Wear is a set of tools to help our customers partner with Patagonia to take mutual responsibility to extend the life of the products Patagonia makes and customers purchase. The program provides significant resources for responsible care, repair, reuse and resale, and recycling at the end of a garment’s life.”

Patagonia got it right: the goal of their program was to celebrate the longevity of their products, and to change the way people think about all the stuff they own.

 

Picture credits: Patagonia

4 mistakes to avoid when setting up a resale channel

1 – Forgetting what it’s all about

In my opinion (I might be a bit biassed), reselling products is all about sustainability. It’s about making sure your products are used as long as possible and aren’t thrown away while someone else could use them.

We want people to use existing products longer, so they buy less new products. Because new stuff equals more resources needed, more greenhouse gas emissions and, eventually, more waste.

And that’s the catch, of course. The ultimate goal of most producers or fast fashion brands is to make consumers buy more of their products. So some of those brands merely consider their resale channel as a marketing tool and as a way to keep consumers engaged so they buy more new products.

We see brands setting up a resale program and then giving their customers gift cards, vouchers or discount codes to stimulate participation in the program. Unless these codes or vouchers can only be spent on the resale platform (which is hardly ever the case), this becomes just another way for brands to incentivize their customers to buy new stuff. These brands are missing the whole point of recommerce to begin with. Can you smell the greenwashing?

We cannot allow resale platforms to become an incentive to buy even more new stuff

Michael, Founder - Quest

2 – Not making it an essential part of the brand’s (impact) strategy

We see brands jumping on the resale train rather hastily. “It’s a trend and we need to follow quickly before we miss the boat”. Yes, but you also need to follow in a smart way.

Having a resale program should become an essential part of your general and your impact strategy. You need clear short- and long-term goals on how many used items you sell and how that will impact the number of new items you produce and sell. Continuous monitoring and communication will be key as the importance of authenticity, transparency and full traceability will continue to grow in the next few years. Those brands who play their cards right from the start, will be able to turn their resale program into a real long-term differentiator instead of being a one-off gimmick.

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3 – Doing more of the same

Resale platforms offer brands an enormous opportunity to improve their customer journeys. The potential to create extra touchpoints that stimulate brand loyalty can hardly be overestimated. And yet we see way too many boring resale channels that all look alike and don’t add any value to the customers’ experience or the brand’s image.

 

4 – Not using the revenue potential

Some brands are so focused on the marketing potential that they completely downplay the revenue potential. Resale is here to stay and its importance will only increase in the following years. So you better have a sustainable, long-term business model that uses the potential of resale optimally by turning it into an important revenue stream.

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