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Why Branded Resale Should Be Your Growth Strategy

By Samantha Dersarkissian

According to Global Data, brands with their own resale programs increased by 275% from 2020 to 2021. Brands like Arc’teryx and Eileen Fisher, early to adopt this strategy are seeing huge success with their branded resale programs. 

It’s hard to ignore a booming sales channel that offers both a positive impact on the planet and sustainable brand growth. 

At Trove, we’re committed to bringing sustainable solutions to the fashion industry. We understand the risks and objections executives might have when it comes to rolling out a branded resale shopping experience for their customers. Here we’ve outlined some of the statistics and case studies that prove branded resale is a strong play for brands committed to sustainability. 

Your Customers Are Already Shopping Secondhand

While much of the interest in resale has been driven by Generation Z’s concern for sustainability and affordability, research shows that shoppers across all generations are shifting to resale purchases.

According to research conducted by the Baker Retailing Center at the Wharton School of the University of Pennsylvania, shopping secondhand has surged by almost 30% across all generations in the last few years

It’s interesting to note that while shoppers have different options for shopping resale, such as peer-to-peer marketplaces and clothing swaps, 65% prefer brand-operated or third-party Recommerce. This preference clearly demonstrates an opportunity for fashion brands to capitalize on. 

First Insight x Wharton

The Stigma of Secondhand Has Shifted 

Sustainability has always been a large part of why shoppers purchase pre-owned items, but inflation and the pandemic accelerated the growth of the resale market.

With less disposable income, shoppers tightened their budgets during the pandemic and became more conscious of their spending. While some bought second-hand to save money, they also dipped into their own closets to find the clothing they could resell. And, as health restrictions shuttered stores, shoppers turned to digital shopping experiences to supply their fashion fix. 

The below chart illustrates a group of respondents from 2021. Across all generations, most have purchased secondhand online. 

First Insight x Wharton

These changes in habits, combined with an ongoing awareness of our environmental footprint, are inspiring more customers to buy and sell pre-owned apparel. Not only is there less of a stigma against buying used goods, but people are also proud to share their finds. 

Branded Recommerce Reduces Counterfeits

According to data from the OECD, fake products are a $4.5 trillion market, with fake luxury goods accounting for 60-70% of that. As more shoppers go online for their favorite brands, counterfeiters are seizing new opportunities to sell through third-party marketplaces and peer-to-peer platforms.

Recent publications raise concerns regarding the in-house authentication processes of resellers like The RealReal, eBay, and ThredUp. According to an investigation by The Capitol Forum in 2019, hourly workers with the title of “copywriter” were responsible for authenticating luxury brand items. The report further explains that copywriters were pressured to meet authentication quotes of 130-155 items a day or risk being fired. 

While counterfeit items have always been a challenge for the fashion industry, luxury brands suffer more when third-party resale platforms sell counterfeit products as authenticated branded apparel. 

This poses a threat to brand reputation and could result in a loss of revenue if enough low-quality counterfeits are introduced into the market as authenticated products. 

At Trove, we partner with brands to create a branded authentication process. This way, you and your customers can feel secure knowing the products purchased through your branded resale channel are genuine. 

Branded Resale Revitalizes Brick & Mortar Locations

Outdoor gear retailer, REI is a perfect example of how branded resale channels can work together to support brick-and-mortar locations. In 2018, the brand launched its online resale channel. Then in 2020, the brand launched its online trade-in program and also offered trade-in at select stores. Members were encouraged to trade in their gently used gear in exchange for an REI gift card. 

After implementing their resale strategy, REI reported their used gear revenue increased by 86% year over year and their total year-over-year sales growth by 36%. 

Today they’ve expanded resale trade-in to all their brick-and-mortar stores after seeing the impact branded resale as a channel has had on both online and in-store sales. 

By offering used goods in-store and incentives for in-store trade-ins, REI created an opportunity to connect with customers who may be new to the brand while also serving avid brand loyalists ready to trade in and upgrade their gear. 

Executives considering branded resale should be thinking about how their resale strategy can support both online and brick-and-mortar locations. Trove offers an end-to-end solution for branded resale. We power the technology, operations, and analytics to help you gain insights into shopper behavior online and in brick-and-mortar locations. 

Recommerce Supports Brand Growth, Even During Supply Chain Shortages

Brands require a steady inventory of products to generate sales and maintain market share. As the pandemic revealed, the supply chain can be disrupted at any time by a shortage of materials and equipment, shipping and transportation challenges, and labor shortages.

Customers who can’t purchase the products they want because of an interrupted supply chain often look for similar offerings from competitors. It takes only a few clicks to switch to another brand, and businesses risk losing the customer entirely when they’re satisfied with the competition and decide not to come back.

A resale channel can help a brand through supply chain shortages by providing another avenue for shoppers to find products, and generating continuing revenue to support operations. Resale as a channel also extends the customer lifecycle with a brand. 

Trove Makes Launching Your Branded Resale Channel Easy

Premium brands such as Lululemon, Levi’s, and Patagonia are among the many businesses taking ownership of their resale products by partnering with Trove. These brands continue to drive sales from the initial purchase of their products to capturing additional revenue from resales that might otherwise be lost to third-party sellers.

To learn more about tapping into this channel, schedule a demo with us today