The resale and rental ‘recommerce’ market is continuing to grow in the UK and is now worth 6.99 billion pounds and accounts for 1.6 percent of the total retail market, according to new research from Barclaycard Payments.
The report, in partnership with Development Economics, reveals that 40 percent of consumers shop second-hand or rent items over buying brand new “more often” than they did a year ago, as a change in consumer behaviour has led almost a quarter of retailers to introduce new technology to support more sustainable shopping in the last three years.
Rentals have seen a particular boost, with the report adding that eight in 10 retailers (82 percent) that offer rentals have noted an increase in revenue since they started doing so, while a further nine in 10 (89 percent) have seen their customer base grow and a similar proportion (87 percent) has seen profits increase.
In addition, those that offer such services report that, on average, a third (33 percent) of their revenue now comes from rental models. Currently, over two-fifths (46 percent) of UK retailers have a resale option in place, and a further 27 percent are considering implementing one. Clothing and accessory rental is at the forefront of the recommerce market, notes Barclaycard Payments, and is the second largest sector in the space with 43 percent, behind entertainment and electronics, such as laptops, headphones and musical instruments at 47 percent.
Fashion is closely followed by home décor and houseware (41 percent), baby care and children’s market (35 percent), sports and fitness equipment (32 percent) and Pet items (18 percent).
Circular shopping methods prove a success for retailers
The recommerce economy is expanding “beyond traditional methods,” adds Barclaycard Payments, as brands take resale services in-house. Of those retailers offering a more sustainable service, three in 10 (29 percent) now provide a platform for customers to resell previously purchased goods which the business then sells on as a preloved product.
A similar number (31 percent) has added the option for customers to recycle products in-store, while three in 10 retailers (31 percent) offer a repair service so that customers can extend the life of their items.
Innovative retailers who offer a more sustainable service have also introduced ‘swapping events’ for customers to exchange items purchased through the business with others (18 percent), and reselling platforms for customers to re-sell goods even if they weren’t purchased at the company (22 percent).
Fashion brands already operating rental and resale services include Marks & Spencer, John Lewis, Asos, Flannels, Karen Millen, Toast, and footwear retailer Schuh. Swedish fashion chain H&M also launched a pre-loved concept in the UK earlier this month, dedicated to second-hand clothes and accessories, from its Regent Street flagship store in London.
In response to the growth of online shopping, over half (52 percent) of retailers have invested in new technology to ensure a seamless recommerce shopping experience, with just under half of those (23 percent overall) having done so in the last three years. A further 23 percent are considering introducing this type of technology shortly.
Of those that have invested in technology to aid reselling, popular developments include introducing a system that offers a quick, continuous checkout process (46 percent), creating an online product resale page (39 percent) and contracting a third-party supplier to build a designated app enabling customers to resell their unwanted items (31 percent).
Linda Weston, managing director at Barclaycard Payments, said in a statement: “Sustainability and the rising cost of living continue to impact merchant decision-making when it comes to the Recommerce Economy.
“Activity within this sector contributes significantly to the UK Economy and our research highlights that merchants are increasingly taking interest in facilitating more sustainable and cost-effective shopping methods for consumers, actively investing in new technology as well as offering recycling or reselling platforms and services. Our data demonstrates just how beneficial this can prove to revenue and income streams amidst a challenging economic climate.”
Harry Wallop, retail expert and commentator, added: “I think it is amazing that the Recommerce Economy is increasingly valuable to the wider retail industry; a contribution of 7 billion pounds proves that retailers and business owners can no longer ignore the trend.
“And it is only likely to get bigger as more high street names embrace the idea that they can rent out items or sell second hand goods alongside new product lines as a way of retaining and attracting consumers.”