Second-hand: centralized management of fashion and accessories products

ReCommerce is gaining prominence in the retail industry, fueled by the rise in responsible consumerism. This model poses a dual challenge for national brands: addressing societal expectations related to CSR and boosting profitability.

Reselling second-hand items like clothing, fashion accessories, and other gear provides new business opportunities. In this article, we’ll examine how second-hand sales can drive growth for brands through effective centralized inventory management.

Maximizing the potential of second-hand

Advantages of second-hand

By incorporating second-hand products into a ReCommerce strategy, businesses can create an additional revenue stream from existing inventory. Recirculating each item prolongs its use and minimizes losses.

Retail brands across fashion, DIY, and sports sectors can reduce the need for new production and resource consumption. Second-hand items also tend to be more affordable for consumers. For retailers, this approach increases profitability by leveraging products that have already been financially accounted for.

Current consumption trends

The second-hand market, especially in the fashion sector, is witnessing remarkable growth. By 2028, it is projected to hit $350 billion. (ThredUp, 2024) Today’s consumers are looking for more responsible and affordable options without compromising on the shopping experience. This trend is encouraging retail brands to establish specialized resale spaces, including fashion programs focused on collecting clothing and accessories.

Shopping habits are evolving into hybrid journeys where customers move between online and in-store experiences before buying second-hand items. Additionally, the importance of community is growing, driven by the demand for transparency and commitment to sustainable consumption. 

This shift towards unified, sustainable commerce signifies a fundamental change in product perception. Items are now viewed as assets that maintain value over time, rather than single-use goods. Circular commerce provides a unique way to foster customer loyalty, encouraging them to return, repair, or resell items within the brand ecosystem.

Centralized management strategies

Implementing a system for inventory management

Managing second-hand sales, whether for clothing or other items, necessitates specific logistics since each piece is unique in condition and resale value. Without a centralized system, multiple points of sale can lead to confusion and hinder item traceability, increasing the risk of losing track of inventory or store availability.

Centralized systems enable:

•  tracking each item from deposit to sale, 
• assigning clear statuses (under verification, on display, reserved, sold), 
• optimizing product rotation by redirecting items to stores with higher demand.

Moreover, whether working in-store or online, each team member must have access to unified data for consistent inventory management. 

To achieve this, the company should integrate information from physical stores, the website, and ReCommerce applications into a unified platform. This comprehensive approach minimizes stockouts and improves the accessibility of information for consumers. Implementing digital tools, such as mobile readers for in-store fashion teams, can further enhance inventory management responsiveness.

Optimizing merchandising to attract consumers

Second-hand products stand out from new collections due to their variety and uniqueness. To attract customers, it’s crucial to present these items meticulously both in-store and online. 

Strategic merchandising emphasizes each aspect of the offer, aiding consumer choices, reducing cognitive load, and enhancing the shopping experience. 

Effective strategies include: 

• creating dedicated spaces like a “second-hand” corner for better visibility and quality assurance, 
• categorizing by sizes, product types, price ranges, and colors to manage stock diversity, 
• highlighting best-sellers or rare pieces with compelling stories,
• showcasing sustainability impacts, such as resources saved or carbon footprint reduction.

In-store interactive screens can offer real-time product availability, giving customers transparent and easily accessible information. 

Online, this strategy is complemented with detailed visuals, personalized recommendations, and accurate search filters to aid consumers in navigating the website effectively. 

Additionally, providing educational content helps shoppers make informed second-hand choices, underscoring the importance of engaging customers with supportive information.

Several brands have already included second-hand strategies in their business models. 

• Decathlon now purchases and resells refurbished sports gear both in-store and online, relying on its unified software for centralized management of repair workshops. 
• Leroy Merlin has embraced ReCommerce with dedicated spaces for reselling second-hand DIY tools and equipment. 

H&M is trialing clothing collection and resale, a move that aligns with circular textile economy trends, where recycling fibers and transforming waste into new garments aim to reduce the fashion industry’s environmental footprint.

Integrating distribution channels

Evaluating online sales platforms

Selling second-hand goods online via a dedicated platform can significantly expand inventory reach and appeal to customers who typically search for such items on the internet. 

Brands can leverage specialized platforms such as Vinted or Vestiaire Collective for clothing and fashion accessories; these platforms offer access to a qualified audience but restrict control over customer experience and profit margins. 

Alternatively, companies can create an integrated marketplace that combines new and second-hand products in a single shopping experience. Although this approach demands more investment, it provides control over crucial aspects like branding, pricing, and customer relationship.

Developing partnerships with specialized distributors

Specialized second-hand distributors provide companies with an opportunity to swiftly enter the market by leveraging their established logistical expertise, customer networks, and quality standards. 

These partnerships can manifest in various ways: 

• an in-store corner managed by a specialist overseeing item recovery and sale, 
• externalized recovery programs where distributors gather products from customers and reinject them into commercial circulation post-refurbishment, 
• white-label collaborations where companies incorporate second-hand offerings under their brand while delegating operational management to experts.

Measuring impact and adjusting operations

Analyzing Return on Investment (ROI)

Launching a second-hand initiative requires careful management using specific financial indicators to measure ROI, which gauges the profitability of operations relative to the investments made in logistics, digital tools, or human resources. Key performance metrics include: 

• the margin from reselling items compared to their processing costs, 
• the reduction of losses from unsold items through recirculation, 
• stock rotation rate as a measure of system efficiency, 
• customer acquisition and retention impacts of the second-hand market.

Adjusting offers based on consumer expectations

Second-hand appeals to a diverse range of profiles: bargain hunters, sustainability-conscious consumers, and buyers seeking unique items. Brands need to constantly recalibrate their offerings based on market feedback and consumer behavior. This involves:

• tracking customer preferences to identify fast-selling categories, guiding merchandising, 
• segmenting offers to cater to various expectations, 
• using customer data for personalized product recommendations in-store and online. 

Insights from satisfaction surveys, online reviews, and purchase behaviors are invaluable for refining the strategy.

Second-hand has emerged as a strategic opportunity for retail brands, with success dependent on centralized inventory management and multi-channel integration.

Beyond enhancing profitability, second-hand serves as a powerful tool to boost brand image and meet consumer expectations. Simplifying the shopping experience through centralized management solutions fortifies customer engagement and loyalty. Request a demo of our solution!