By some accounts, re-commerce today is where e-commerce was two decades ago: a more customer-centric retail model where customers satisfy their increasing expectations for greater value, experience and sustainability.
That’s why resale is worth $100 billion today, growing five times the retail rate and expected to represent 23 percent of all retail in 2030, according to the Ellen MacArthur Foundation. Just like in the 2000s, brands have an unmatched opportunity to emerge on top with more than 100 brands now owning their resale channels.
“In boardrooms all over the United States, everyone is trying to figure out how can they do this,” said Gayle Tait, CEO of Trove, the re-commerce provider to Lululemon, Patagonia, Arc’teryx and Levi’s.
The company’s just-released “The Brand Resale Index: Defining the Resale Experience” report unpacks the state of the e-commerce market.
The report evaluated leading practice adoption and trends across 40 brands in fashion/apparel, outdoor, footwear and luxury. Brands were assessed against 147 criteria and scored on brand positioning, commerce and trade-in experiences, on top of the business model and impact potential of sustainability benefits. Criteria were defined from the customer’s point of view, including policies, range of available items, ability to trade in/sell brand items and brand positioning.
Of the 40 brands analyzed, 11 were powered by Recurate, 10 by Trove, six by Archive, five by ThredUp, and two by ReCircled. Six were powered by other platforms.
“I founded Trove with the belief that this next era of commerce was inevitable—brands and retailers will get the full value from the items they design, produce and sell, often across several owners. In doing so, they will reach new customers, drive loyalty with existing customers and elevate their brand through deeper storytelling,” Andy Ruben, Trove founder and executive chair, said. “Brands that lead this shift will benefit and play an outsized role in advancing our relationship with stuff; shifting society from the current ‘take-make-waste’ model to a smarter, less resource intensive circular model. Brands will grow and profit without direct growth in new production.”
Trove believes scale, commerce integration and ease of trade-in will guide the evolution of resale. While it’s still early days for a budding industry, leaders are starting to emerge.
Overall, REI scored the highest at 72 percent. Arc’teryx led outdoors brands with 68 percent while Amour Vert led in fashion/apparel with 66 percent. On led footwear with 59 percent and Phillip Lim dominated luxury at 53 percent. Patagonia got top marks for brand positioning at 78 percent, Coach led commerce at 78 percent, Frye led digital trade/sell at 85 percent and Lululemon led store trade/sell at 69 percent.
Though luxury lags in the resale space, outdoor brands emerged as the most mature. They naturally align with the resale mission and customer values, product durability, and higher-priced items. Fashion/apparel and footwear have grown the most over the past year. Interestingly, fashion/apparel has the highest representation across all categories with 23 brands but falls short on execution and has a harder time turning a profit.
REI showed leading practices across brand positioning, commerce, trade-in and business model integration. The co-op has a long history of in-store “Garage Sales” and took the Re/Supply program online in 2017. Integrating the program into its co-op membership program resold over 1 million items in 2021. REI members can shop pre-owned in stores and online with integrated item content across new and used and two dedicated physical stores for used gear. Members can trade in items digitally and in stores, making REI a leader in omnichannel commerce and trade-in.
Arc’teryx’s ReBird program led the outdoor industry and was the top score on brand positioning with highly integrated customer marketing across online, social and stores. On’s Onward led footwear with a well-designed and efficient commerce experience consolidating size, color and condition variants in an interactive digital experience. Amour Vert’s ReArmour was the highest-scoring brand in fashion/apparel, providing single-cart checkout and awarding loyalty credit for new and pre-owned purchases. Phillip Lim 3.1 scored highest for luxury.
What set winners apart
Sixty-three percent of companies created specific resale branding to communicate how the program supports and integrates with the brand mission and values. Ninety-four percent include branding on the pre-owned order email notifications, and 51 percent use resale branding on the packaging for used item purchase deliveries.
Ninety-seven percent of brands clearly explain the trade-in process on the site while just 14 percent do so with physical store signage. Fifty-five percent are clear about how long the trade-in process takes, while 85 percent offer trade-ins by mail. Forty-four percent allow customers to trade in their items in physical stores, and 29 percent return unacceptable items to customers by mail.
Brand scores ranged from 30 percent to 85 percent in trade-in/selling, a relatively new capability for brands. Frye got the nod when it comes to digital trade-in while Lululemon‘s brick-and-mortar store trade-in scheme led the pack.
Not all resale programs are good sustainability programs. Brand resale programs based primarily on new product purchase incentives are risky for brands that want to tout sustainable claims and likely amount to marketing.
A genuinely circular resale program can profitably scale by selling pre-owned items without incentivizing the customer to buy a new product.
The future of resale for brands
Trove expects luxury to get serious about the resale opportunity.
“Luxury brands need to be connected to younger consumers, and those younger consumers may not be buying the items today. Resale is a way for them to buy those items,” Tait said.
Success in setting up owned resale takes some strategizing.
“I think one of the biggest correlations for success is leadership in a company, and progressive leaders understand how their customer base is always changing,” Ruben said. “It’s always dangerous for a brand to age with their customers; they’ve got to stay on top of trends and decide which trends really matter. Resale is one that absolutely matters.”
The report was the result of five months of combined effort between Trove and OSF Digital (formerly FitForCommerce), a research and strategy group, with support from Anthesis, a global sustainability services and solutions provider. Trove sponsored the Branded Resale Index but remained independent of data gathering and analysis.