ReCommerce: integrate second-hand products into your offer
ReCommerce is set to grow by nearly 30% between 2023 and 2025, making it an attractive market for European retailers. By incorporating ReCommerce into their strategies, retailers can offer sustainable alternatives to environmentally conscious consumers and enhance their commercial performance with new revenue streams.
How can retailers effectively structure a second-hand offering within a unified commerce framework? What strategies can maximize its impact? This article delves into the challenges and best practices of ReCommerce.
Integrating ReCommerce into a unified commerce strategy
What is ReCommerce?
ReCommerce refers to the trade of second-hand goods. It involves purchasing used items, refurbishing them, and reselling them. This can be done by the brand itself, like Apple does with its Apple Certified Refurbished site for iPhones and other devices, or through specialized marketplaces like ReCommerce.com for reconditioned mobile phones.
ReCommerce necessitates a reorganization of a company’s logistics processes to efficiently handle returns, sorting, refurbishment, and reintegration into inventory. Pricing must be updated in real-time, considering product condition, demand, and market trends. This requires a unified stock management system for both new and used products.
This strategy aligns with the principles of a circular economy, aiming to reduce carbon footprints and minimize waste by extending product lifespans. It involves pooling logistics to avoid unnecessary transportation and prioritizing local refurbishment to lessen environmental impact.
ReCommerce also serves as a compelling marketing tool for brands. A study by Odoxa for Bearing Point found that 74% of French consumers consider sustainability before making a purchase. Additionally, younger generations favor second-hand purchases for both economic and ecological reasons. The ReCommerce market in the European Union is projected to grow from €94 billion in 2022-2023 to €120 billion by 2025, marking a 27% increase. This presents a significant opportunity for retailers looking to expand their sales.
Orisha Commerce provides innovative ReCommerce solutions, enabling retailers to streamline the management of repairs, rentals, and resales of second-hand products. These solutions present new growth opportunities while promoting a more sustainable consumption approach. Kiabi’s new concept, Kidkanaï, focuses on second-hand children’s and baby clothes. The brand has implemented the Orisha commerce solution to support second-hand clothing sales and launch a synchronized e-commerce site.
Impact on customer experience
Integrating ReCommerce significantly transforms the customer experience, from product discovery to loyalty. It adds a new dimension to the product offering alongside new items. Indeed, 83% of buyers are drawn to the extensive selection of second-hand items and brands.
ReCommerce demands unified commerce, with seamless synchronization between physical and digital channels, as retailers need to manage returns and second-hand inventories alongside new product stocks. Unified commerce enables hybrid journeys, offering options such as click and collect for convenient in-store pickup, real-time stock displays online and in-store, simplified returns, and fast deliveries.
ReCommerce also requires a dedicated after-sales service. A GroupM study reveals that 41% of French consumers worry about the lack of warranties and after-sales service for second-hand products. To reassure them, ReCommerce must prioritize responsive customer service and provide guarantees.
How do returns work in ReCommerce?
In ReCommerce, each item is unique and may exhibit specific signs of wear. Effective returns management requires clear policies:
- thorough inspection of returned products,
- refurbishment if needed,
- prompt reintegration into stock.
Additionally, providing options like in-store returns or relay points simplifies the process for consumers and encourages their participation in the circular economy.
Optimizing customer experience with ReCommerce
Personalize the second-hand product offering
80% of consumers are more likely to purchase from companies that provide personalized experiences. Analyzing behavioral data helps identify the types of products that attract your customers, ensuring the right items are presented to them. Artificial Intelligence (AI) aids in this personalization by delivering tailored offers to each user in real-time. Detailed product pages, with precise descriptions, photos, videos, and customer reviews, help reassure customers about quality.
Specific loyalty programs for second-hand customers can also be established. These programs should be accessible both online and offline, facilitated by synchronized sales channels.
Create incentives for resale!
To sustain a second-hand commerce, customers must be encouraged to resell their old products.
- Effective strategies include offering financial compensation or vouchers. Decathlon, for instance, provides a buyback service for sports equipment both in-store and online. After evaluating the product, the customer receives an immediate voucher, encouraging another purchase at Decathlon and reinforcing loyalty.
- You can also establish a virtuous cycle where customers regularly resell their old products to renew their equipment, similar to H&M’s clothing buyback program. The brand offers discount vouchers for future purchases in exchange for bags of used clothes.
To encourage resale, the process must be seamless. Backmarket has created an ultra-simple process: customers describe their product in a few clicks, receive an instant offer, and send it for free. For optimal ReCommerce, customers should be able to report a product’s condition and easily modify their listing if needed.
Every step of the process should be simplified. For instance, a customer looking to resell a smartphone should be able to report its condition, modify details if necessary, and easily follow the subsequent steps via their phone. An intuitive and user-friendly platform builds trust and encourages repeat experiences. User reviews on the quality of the ReCommerce process can also help reassure new sellers.
ReCommerce is built on strong ethical and environmental values. Ikea recognizes this and offers to buy back its second-hand furniture in exchange for vouchers. The brand emphasizes the ecological impact of the program to motivate participation.
Maximizing the performance of distribution channels
Resale platforms
Resale platforms offer several options for retailers looking to sell second-hand items:
- a proprietary resale platform, such as your e-commerce site or a white-label solution;
- a specialized marketplace in your sector;
- or specialized second-hand partners.
Ba&sh, for example, created its own space on Vestiaire Collective, featuring premium quality control and a community engagement strategy. This helps the brand maintain a strong image while accessing a qualified second-hand market.
Harmonizing physical and digital points of sale
A second-hand business requires seamless integration between various sales channels, both physical and digital. In ReCommerce, each product is unique (condition, model, accessories…), complicating stock management. Unified stock enables real-time integration of online and offline inventories, allowing customers to check in-store product availability online.
Click and collect and in-store returns provide complete flexibility between online and offline channels. These hybrid options ensure a smooth customer experience, allowing for in-store returns of online purchases and vice versa. Ikea ReCommerce exemplifies this by enabling customers to buy second-hand furniture online and pick it up in-store.
Physical stores can bolster ReCommerce by dedicating spaces for reselling refurbished items. Fnac Seconde Vie, for instance, buys back tech products like smartphones in-store and resells them on both its online and offline platforms.
However, consistency is key! Customers should not find more attractive prices online than in-store, or vice versa. Consistent pricing prevents confusion. Retailers can utilize dynamic pricing tools to adjust prices in real-time, ensuring synchronization across online and offline channels.
Measuring the success of an omnichannel approach
Tracking performance indicators
The effectiveness of a ReCommerce strategy can be gauged through specific indicators:
- Sales performance: average revenue per channel, cart abandonment rate, and analysis of conversion peaks following cross-channel interactions;
- Logistics performance: real-time product availability, average order processing time, and logistic cost per order;
- Operational performance: customer acquisition cost, average margin per ReCommerce product (online vs offline), and return and re-routing costs between channels;
- Environmental performance: product reuse rate via ReCommerce and the percentage of refurbished products reintroduced across multiple channels.
Adapting to market trends
The ReCommerce market evolves rapidly, necessitating precise trend monitoring: new consumption modes, technological innovations, and ecological demands. For instance, the rise of clothing rental and subscription services, a trend embraced by Zalando.
Another emerging trend is the demand for ultra-personalized experiences, even when purchasing second-hand. AI can facilitate intelligent recommendations for refurbished products. Innovations in technology enhance the buying experience, such as using augmented reality to visualize a refurbished product before purchase.
ReCommerce fundamentally redefines retail business models. By incorporating second-hand products into their offerings, brands position themselves as agents of change, providing more responsible alternatives that align with current consumer expectations.
For this strategy to be effective, it must rely on unified stock management and seamless synchronization between sales channels. A unified management platform allows retailers to structure their ReCommerce offerings, blending commercial performance with sustainable commitment.
With Orisha Commerce, drive your business growth and align with your customers’ values.
