Article written by Nikki Baird, VP of strategy & product at retail tech company Aptos
Resale is having more than just a moment. It has gone from a curiosity to a full-blown trend with no signs of stopping.
Between sustainability concerns leading to more emphasis on reuse and recycling, to economic concerns driving consumers to lower cost options, the growth of sites such as Vinted and eBay is heralding resale as a mainstay of the retail offering.
But one place where resale has not really gained traction is in the store. Most often it is tucked into a back corner, perhaps next to the clearance racks, but it is certainly not integrated into the retailer’s offering.
Why is that? Most of the time, a resale programme is run through the marketing department, rather than through traditional operations. A company will partner with a third party who will run the online site and the logistics of gathering product at stores to be included for resale, with a share of the proceeds going back to the retailer.
How resale works for the typical retailer
There are plenty of variations, but the most typical programme offers a discount on future purchase or a store credit awarded in exchange for turning in a product for resale.
Merchandise accepted from a consumer does not usually go straight into that store’s inventory – it is gathered up and sent to the third party’s central processing to be evaluated, sorted, and made ready for sale. Anything that isn’t sellable is donated, recycled or worst case bundled off to landfill or destroyed. Some retailers make commitments that these last two things don’t happen, but it’s not always guaranteed that everyone in that supply chain follows through.
Items for resale are rarely inventoried. Luxury goods might, but a lot of product data has been lost over the years so at best you might get a brand, a category (“short-sleeve blouse”) and a size – but rarely anything about the material makeup or any sizing guidelines. Items are usually photographed for online listing with a price and a bare-bones description. In some cases, items might be sent to a store to be featured there, but this is rare.
Additionally, the flow and the depth of product information may differ, depending on if you are a brand reselling your own brand, or a retailer reselling a lot of different brands.
Three opportunities for stores
What’s missing in all of this in most cases, is the store. If retailers and brands really want to commit to resale, they need to invest to make real connections in stores. Here are three big missed opportunities.
Driving traffic to stores: in resale, every item is unique. Even if you have ten of the same handbag, for example, each one has a different wear and tear which makes for potentially a unique price, or at least hits a unique level of preference among consumers shopping resale.
Stores are a great answer for helping consumers decide if a “pre-loved” product is exactly the one for them. Distributing sought-after items to stores – especially without advanced warning to consumers, much like brand drops – will bring people to stores looking for their unique match of must-have pre-loved item.
And if you guess wrong, omnichannel capabilities mean you should be able to still give an item its maximum resale opportunity by listing it online, whether through click & collect, or through ship from store. Any incremental (i.e. unplanned, net-new) trip is a net-new opportunity to sell something to a customer that you didn’t have before.
Store events: not only can you drive traffic to stores for resale items themselves, especially more unique or high-value items, you can use resale as the basis for all kinds of in-store events. This is where stores can really lean into their local communities to build events that will attract new and long-time shoppers alike.
Offer recycling drives that are timed for either end of season discounts or big pushes behind new season offerings. Or events aimed at helping shoppers keep their existing products longer – resale does not have to focus exclusively on reselling past designs. It can also be about helping customers get more value out of what they own, while still exposing them to new pieces.
Restyle events where customers bring a loved piece in to find new ways to wear it serve exactly that combination of objectives. Offering repair or refurbishment, even cleaning services or classes can help customers keep what they own in top condition. Again, any incremental visit to a store is a net-new opportunity to convert a shopper or drive additional lifetime value and loyalty in a customer.
And obviously, trunk shows or vintage drops also serve as high profile events that can drive traffic from even beyond a store’s usual trading area. Not to mention that all of these events have enormous potential for social sharing, influencer partnering and all kinds of earned exposure in digital channels.
Enhanced store assortments: retailers all too often consign resale into a back corner or some other similarly challenged area of the store. However, luxury retailers are increasingly bringing resale right out in front, mingling it directly with new items, as demonstrated by Balenciaga, Coach, and Bottega Veneta in recent catwalk shows.
While there may have been concerns in the early days of resale that you wanted to ensure that the consumer knew what they were getting with a resale item, these days it’s more about just offering unique things in unique ways to help a consumer build their own unique fashion profile. Resale is no longer something you stick in the dusty corner, but potentially even a cornerstone of your brand’s commitment to reducing your environmental impact – Mulberry’s Buy Back Programme being one such example. If it’s something to be proud of, it should not be hidden away – it should be featured just as proudly as any other product in the store.
It’s also a testament to the brand to show off how well an item may wear over time. This helps a consumer with their own value equation of price vs. quality, to know that the new item is sitting right next to something twenty years old and still looking great.
And it’s something of a secret that resale is actually considerably more profitable than new sales, especially if you bring it all in house and integrate it into your offering. While the startup costs might be high, every time you resell something, it’s nearly 100% profit.
Only the holding and any transportation costs go into product costs, the rest is already paid for from when you sold it new. This is doubly true if you are intaking resell product through discounts on future purchases, rather than credit.
Don’t leave stores out in the cold
Retailers often significantly under-estimate how much of a disconnect it is between their online site and social channels, and what goes on in their stores. Nowhere is that more apparent than if resale is offered online, but stores serve only as an indifferent collection point and not much more. Or if resale in stores is treated as a distraction, rather than the traffic and loyalty driver that it could be.
It’s easy to get caught up into over-complicating resale – worrying too much about what to offer for resale items vs. what to sell them for; what to do about unsellable items that inevitably make it into the resale supply chain; how much information is needed about an item to make it easy to sell; even how to balance promoting resale vs. new items.
However, retailers often get so wrapped up in avoiding complication that sometimes they over-simplify as a result, leading to something too disconnected from the brand and what it’s trying to accomplish with resale to begin with.
You can have the best of both worlds – you can attract shoppers with new items and demonstrate the value and longevity of the brand with resale. You can have local unique assortments and also put any item into the hands of any customer who wants it, whether in store or online. With just a bit more effort in product catalogue, omnichannel, and in-store event planning, resale can become as much a driver for new business as it is an important and increasingly relevant channel of its own.
Nikki Baird is a long time retail analyst and expert, and her career to date includes spells at Forrester and RSR Research, where she studied and monitored all aspects of the tech, supply chain, and customer experience evolution within the retail industry. She joined Aptos in 2018 as VP of retail innovation.
[image credit: Aptos]
