ReCommerce in retail: profitable circular economy scenarios for your brand

As climate change continues to reshape our consumption habits, the retail industry is at the forefront of today’s environmental challenges:

• Combating the waste generated by millions of unsold or prematurely discarded products every year.
• Limiting the depletion of resources (raw materials, water, energy, etc.) that are consumed in massive quantities.
• Reducing the carbon footprint associated with product manufacturing, transport, and distribution.

While some retailers have already adopted more sustainable models on their own initiative, industry players will eventually need to embrace this shift as regulatory pressure intensifies. In fact, legislation regarding recycling, sustainable development, and waste management is becoming increasingly common at both national and European levels.

Beyond mere compliance, the transition toward a more virtuous retail model addresses a growing demand from consumers themselves. Younger generations, in particular, prioritize responsible brands capable of giving products a second life. 

Within this context, Recommerce and second-hand sales represent a major opportunity for the sector, especially as the second-hand, repair, and rental markets continue to surge.

3.Opportunities and challenges for retail

While aligned with environmental goals, the circular economy also serves as a response to rising consumer demand. According to a 2023 CSA study, two out of three people in France claim to have purchased circular economy products within the last 12 months.

Nevertheless, implementing a circular economy still faces several obstacles, particularly for retail businesses:

• The cost of recycled raw materials often remains higher than that of new materials. In sectors where price competitiveness is crucial, this gap can deter companies from adopting circular models.
• Although responsible consumption practices are growing, they are not yet deeply rooted in all consumer segments. Furthermore, criteria such as price often remain the priority at the point of purchase.
• Finally, companies may lack a clear understanding of the legislative framework surrounding the circular economy.

Despite these challenges, the circular economy offers significant long-term opportunities, ranging from reduced waste management costs and resource optimization to an improved brand image.

1. What is Recommerce?

Recommerce refers to the buying and selling of used, refurbished, or returned products through digital or physical channels. Beyond second-hand sales, this concept extends to other circular practices such as rental or repair.

Within a circular economy framework, Recommerce helps extend product lifecycles, encourages reuse, and reduces waste. Given the growing focus on sustainability, it is a winning strategy for both consumers and retail businesses.

2. Recommerce vs. second-hand: definitions and differences

Recommerce can take various forms depending on the products and the digital or physical channels used. We can distinguish three main models that often complement one another: second-hand, rental, and repair.

Second-hand refers to the resale of used products, often after they have been curated and authenticated to provide consumers with high-quality, affordable alternatives to new items. 

It also includes “refurbished” goods, used products restored to high-quality standards before being sold again. Companies choosing this model can refurbish products in-house, much like Apple does with its Certified Refurbished store.

This approach enables brands to:

• Manage the entire end-to-end process.
• Maintain strict quality control, ensuring that used items meet brand standards before being resold.
• Streamline operations and maximize the value of used products.

Specialized marketplaces for refurbished goods have emerged in recent years, including Back Market (a pioneer and current leader in France), Recommerce.com, and Easy Cash, to name a few.

As consumers seek to balance responsible consumption with purchasing power, rentals are becoming a prominent alternative to traditional sales:

• Short-term rental is an attractive option for customers needing a product for a limited time, such as fashion items, tools, or equipment for specific events. It allows consumers to access quality products without a long-term purchase commitment. Ultimately, short-term rentals promote a more sustainable economy by preventing the purchase of items that might only be used once.
• Long-term rental, meanwhile, allows consumers to lease everyday goods on a monthly or annual basis. Well-known in the automotive sector, this model is now spreading to categories like furniture, appliances, and sports equipment.

Consequently, rental is a flexible and economical solution, ideal for meeting occasional needs. Furthermore, it makes premium products more accessible to consumers deterred by high retail prices. 

Retailers also benefit from this trend as it increases foot traffic in physical stores, thereby boosting overall sales potential.

Repair is another essential component of Recommerce and the circular economy, involving the restoration of damaged products to extend their lifespan. By offering repair services, retail companies not only reduce waste but also create additional revenue streams through the services provided.

Once the preparatory work is complete, it is time to select a suitable Recommerce model. 

Whether you choose second-hand resale, repair, or rental depends on various factors, starting with your industry, as some models align better with specific product types than others.

Most importantly, listen to your consumers by leveraging your earlier analysis; their expectations are the best indicators of which models are most relevant. 

In fact, second-hand, rental, and repair can even be combined, but it is often better to proceed step-by-step, testing circular practices on a small scale. The key is to refine and adapt your strategy over time.

Recommerce must be fully integrated into your retail operations, requiring a deep rethink of company logistics. This reorganization is vital for managing:

• Returns / Refunds.
• Product sorting.
• Refurbishment.
• Reintegration into the available inventory.
• Pricing management.
• Online listing.

Ensuring product quality is paramount, which is why strict quality control measures must be established. 

From a customer perspective, simplifying the process through Click & Collect or in-store drop-offs creates a Seamless experience. This leads to positive engagement and encourages deeper customer participation in the circular economy.

When navigating the second-hand market, some retailers choose to sell directly through their own digital platforms, integrating refurbished and used items seamlessly alongside their new inventory. 

Alternatively, many brands opt to partner with specialized resale marketplaces; this strategy offers a fast track to visibility and market reach without the technical overhead of developing a separate, dedicated e-commerce site for pre-owned goods.

The same applies to repairs:

• Retailers can build internal Repair workshops to manage the entire process.
• Alternatively, they can partner with specialized external providers. This strategy is often more cost-effective for companies lacking the specific infrastructure or expertise to manage repairs in-house.

Unified commerce relies on a centralized database shared across all sales channels (e-commerce, stores, marketplaces, mobile apps, etc.). This approach enables Real-time integration for collecting and analyzing data reliably.

Key benefits include:

• Automatic synchronization of stock, prices, and orders, reducing errors and stockouts.
• Unified, duplicate-free data integrated with other IT systems.
• A consolidated view of customers, products, and sales for precise management.

Within the ReCommerce landscape, leveraging customer data, including preferences, behaviors, and expectations, allows retailers to tailor their offerings and recommend the right products at precisely the right moment, serving as a powerful engine for Personalization. Furthermore, enriched Product references, complete with detailed descriptions, photos, videos, and customer reviews, greatly enhance transparency and consumer trust. 

Beyond the storefront, centralizing this data streamlines logistics and fosters the adoption of sustainable practices. This unified data approach makes it far easier to offer circular alternatives like second-hand, repair, or rental services, all while delivering a fluid and consistent Customer experience.

Recommerce redefines the Customer experience, from discovery to long-term loyalty. Combined with new products, it offers an attractive alternative: two out of three people in France consume used goods or plan to.

Unified commerce enables hybrid journeys that ensure a fluid experience:

• Click & Collect to simplify store pickups.
• Real-time stock visibility online or in-store.
• Easy returns at any Point of sale (POS).

However, a significant hurdle remains: many buyers are still wary of potential defects and the perceived lack of protection when purchasing second-hand goods. To alleviate these concerns, ReCommerce must prioritize the following:

• A highly available and responsive customer service team,
• Solid guarantees regarding Returns / Refunds and exchange policies.

Ultimately, ReCommerce is far more than just a supplementary product line; it fundamentally redefines the relationship between brands and consumers by combining convenience, transparency, and trust.

In Recommerce, every item is unique, which complicates Inventory management. 

A unified stock solution solves this by integrating online and offline inventories in real-time. Furthermore, because each product may show specific wear, retailers must define rigorous return processes, including careful inspection, refurbishment, and efficient restocking. 

Furthermore, because each pre-owned item may exhibit unique signs of wear, retailers must establish rigorous workflows for handling Returns / Refunds, including:

• A meticulous inspection of all returned items.
• Refurbishment or reconditioning whenever necessary.
• Fast and efficient reintegration into Available inventory.

To achieve this level of precision, it is essential to leverage the right technology, starting with a robust Inventory management solution integrated within a Unified commerce system.

By bridging the gap between physical and digital shopping worlds, an Omnichannel journey provides the essential flexibility that ReCommerce requires. Services such as Click & Collect or in-store returns create a Seamless experience; for instance, an item purchased online can be easily returned to a physical shop, and vice versa.

Beyond the reach of e-commerce, the role of the physical Point of sale (POS) remains vital. In fact, dedicating specific in-store space to pre-owned goods is often a cornerstone of a successful ReCommerce strategy.

For example, Fnac offers in-store trade-ins for high-tech products, books, and games, which are then resold across both online and offline channels. Customers can also initiate trade-ins directly through the brand’s website, reflecting a truly omnichannel approach to circular trade.

In Recommerce, efficient return management is critical for : 

• Alleviating consumer concerns regarding second-hand goods 
• Establishing a foundation of trust with customers and, ultimately, securing their long-term Loyalty.

However, this process can quickly turn into a significant logistical headache. Unlike traditional retail with new goods, second-hand commerce involves managing returned products that arrive in widely varying conditions. Simply put, every return is unique and demands specific, individual attention.

Consequently, having a high-performance logistics system is absolutely vital. This involves establishing a fluid and effective return process, ensuring that items are rapidly inspected, sorted, and refurbished whenever necessary to maintain high standards.

Effectively managing these complex logistical flows often requires specialized training for employees, as well as the right digital tools to maximize both operational efficiency and flexibility.

Another challenge inherent to ReCommerce lies in the constant fluctuation of stock levels. Unlike the predictable flow of new goods, second-hand inventory can vary significantly and unpredictably.

A dynamic Inventory management system, capable of adapting to these shifts, is therefore essential. Advanced analytics tools can also help you anticipate demand and identify emerging trends in both returns and sales.

Striking the perfect balance between new products and ReCommerce items is no simple feat; it requires ensuring that neither category overshadows the other. Real-time stock visibility and clear categorization are vital to maintaining this equilibrium and effectively meeting customer demand.

Guaranteeing product quality is a fundamental prerequisite for a successful ReCommerce strategy. Every item must undergo a meticulous inspection and be restored to its proper condition whenever necessary.

However, maintaining a consistent level of quality across all products represents a significant challenge. A single unidentified defect during quality control is all it takes to cause customer dissatisfaction and tarnish your brand’s credibility.

To ensure that every refurbished item meets your customers’ expectations, we recommend:

• Implementing standardized reconditioning protocols.
• Hiring qualified technicians or partnering with a recognized service provider.

Ultimately, Recommerce serves as a cost-reduction lever by allowing retailers to resell unsold or returned stock. Instead of discarding products that represent a total loss, you can recover a portion of your investment through resale. 

This strategy maximizes value while minimizing inventory Costs, contributing significantly to your company’s overall profitability.

Marketing and communication play a pivotal role in building a community deeply invested in the circular economy. By fostering dialogue and sharing ideas, you can inspire consumers to adopt more sustainable habits while strengthening their sense of connection to your brand.

Digital channels, in particular, provide highly active spaces for discussion and exchange regarding best practices for responsible consumption.

However, why not consider hosting physical events to bring your community together and showcase concrete alternatives? For instance, a Repair workshop open to the public can demonstrate firsthand that it is truly possible to extend a product’s lifespan.

By actively involving your customers in this journey, you can:

• Increase overall consumer engagement.
• Strengthen your brand’s credibility.
• Encourage long-term brand Loyalty.
• Benefit from valuable feedback and innovative ideas to improve your products and services.

One of the primary challenges within the circular economy is shifting consumer mindsets and consumption habits. Consequently, marketing and communication campaigns serve as indispensable levers to educate the public on the positive impacts of ReCommerce.

To communicate the environmental advantages of this approach, several strategies are available to you:

• Launch awareness campaigns highlighting the benefits of recycling, reuse, and repair.
• Share impactful statistics regarding resource waste and the environmental consequences of specific consumption habits.
• Provide practical solutions for adopting more sustainable lifestyles.

To avoid accusations of “green washing,” brands must ensure their communication regarding circular economy initiatives is clear, transparent, and authentic:

• Publish factual data on the environmental footprint of specific products.
• Share updates on achieved progress and future sustainability goals.
• Feature third-party certifications, reports, or independent audits to validate commitments and maintain credibility.

Beyond raw data, storytelling is a compelling engagement tool. By narrating the “life story” of your products from their design and initial lifecycle to their eventual recycling or reuse, you can forge a deep emotional connection with your customers. This effectively reinforces your position as a responsible and sustainable brand.

The success stories of retail leaders offer several key takeaways.

• Recommerce can serve as a powerful Loyalty driver: for instance, through premium repair services exclusive to Loyalty program members or vouchers issued in exchange for second-hand trade-ins.
• Buying and reselling used goods increases foot traffic at the Point of sale (POS), which often has a positive knock-on effect on new product sales.
• The Decathlon case study illustrates this perfectly: far from being just a green initiative, Recommerce is a value-creating engine in its own right, delivering a tangible impact on total revenue.

On the contrary, their complementarity means they actively fuel one another. For example:

• A Repair workshop can draw visitors to the store and spark purchases, whether for new or second-hand products.

Rental can act as an initial step toward a final purchase, allowing customers to test a product at a lower cost for a period.

Recommerce cannot succeed in isolation.

• It must be integrated into the business operations through a Unified commerce strategy, ensuring that new and second-hand products are no longer managed in silos.
• It must be supported by technological solutions designed to streamline the management of repairs, rentals, and the resale of second-hand items.

One of the most frequently used indicators for measuring progress in the circular economy is the recycling and waste recovery rate. This simple yet effective metric assesses the proportion of waste diverted from landfills or incinerators and reintroduced into production cycles.

However, more comprehensive tools can be utilized to evaluate the overall environmental impact of a product or service across its entire lifecycle, from raw material extraction to its eventual end-of-life.

Consequently, Life Cycle Assessment (LCA) has become an essential tool for companies aiming to reduce their ecological footprint. By quantifying various impacts (such as greenhouse gas emissions, water consumption, and pollution) at every stage of the lifecycle, retailers can identify critical areas for priority improvement.

Many businesses go even further by calculating the total environmental footprint of their entire operations, including indirect impacts associated with their Supply chain or the way consumers use their products.

From Decathlon to Kiabi, Fnac, and Boulanger, major brands are leading the charge in developing the circular economy. 

Far from being a mere “green” image tactic, Recommerce is a genuine growth lever for retailers:

• It generates additional value.
• It supports new product sales.
• It builds Loyalty among consumers seeking responsible consumption.

The share of refurbished products is growing rapidly across the retail sector, particularly in high-tech goods, household appliances, and sporting equipment.

From a consumer perspective, traditional barriers are dissolving: when sold by a reputable brand and backed by reliable warranties, second-hand products provide the reassurance needed to attract an increasingly broad audience.

The true challenge now lies in expanding and sustaining the supply to ensure the circular economy becomes a permanent fixture. The good news is that this booming market is filled with opportunities for retailers and brands that are prepared to seize them.