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Secondhand Shopping Is Mainstream. Now What?

Secondhand shopping has hit the mainstream, according to the numbers.

Today, more than 80 percent of U.S. consumers are engaged in shopping and selling pre-owned goods, according to data from OfferUp—and 93 percent of those surveyed through the mobile marketplace’s research with GlobalData said inflation spurred their decision to tap the resale market.

The re-commerce market has grown 15 percent over the past year alone. In fact, resale grew twice as quickly as the broader retail segment in 2021, and is expected to hit $178 billion in 2022. Shoppers have integrated resale channels into their browsing and buying habits, with 63 percent saying they always or often visit secondhand sites before investing in something new. More than half of those surveyed plan to increase their engagement with resale over the next 12 months, and by 2027, the market is projected to reach $289 billion.

The average U.S. consumer spends about 27 minutes each day browsing digital resale sites. That’s just three minutes short of the average amount of time spent on social channels like Instagram, Facebook and TikTok. Re-commerce is creating space for new technology that optimizes the experience of shopping secondhand, according to Sarah Pinner, CEO and co-founder of Beni.

The free browser extension, which launched on Chrome last week, intercepts consumers’ searches for fashion products and offers up alternatives available on sites such as The RealReal, Rent the Runway, Vestiaire Collective, eBay and Kidizen.

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Pinner’s tapped her background in fin-tech and experience at sustainability-focused groups like Xtreme Zero Waste and Imperfect Foods to build an e-commerce tool helping shoppers engage with the circular economy. “We did a lot of user research and we found that most people wanted to buy secondhand, but they didn’t want to shop secondhand,” she said. While some shoppers enjoy a bargain hunt, others don’t have the time to hunt down the perfect pair of jeans, she said.  

“Clearly the stigma around secondhand is gone, but I was really intrigued by this intention-action gap that exists for a lot of people,” Pinner added. That’s where the idea for a built-in browser extension came in. “We wanted to build a tool that integrates into existing shopping flows, and reduces the behavior change needed as much as possible,” she said.

Image- and text-matching algorithms allow Beni to pair product photos and descriptions from more than 600 brands with items found on about 20 resale sites, providing both exact matches and similar suggestions in a drop-down module. If a shopper is browsing Lululemon leggings on the brand’s site, they might be presented with options to buy from sellers on eBay or Tradesy, for example. Filters allow users to set search parameters based on size, brand, color and sales platform, and consumers can choose whether they want to shop peer-to-peer or only on managed marketplaces.

Beni

Pinner said that the product’s 1,100-user beta-testing period this spring showed that more than 60 percent fall into the “frustrated” or “aspirational” resale shopper camps. Both groups are interested in supporting resale, but find the experience to be inconvenient, burdensome or confusing. “The aspirational secondhand shoppers didn’t want to learn a whole new way of shopping just to get into resale,” she said.

Beta testing revealed that shoppers were using the extension in different ways. Some hunted for specific products like a Levi’s denim jacket or a Reformation sundress, and wanted Beni to aggregate all their buying options. Others were shopping for an occasion, like a wedding, and found the prospect of browsing a resale marketplace without a specific product in mind daunting. The plug-in allowed them to search their favorite brands’ e-commerce sites and zero in on an item. Then, Beni served up their resale options.

Moving forward, Pinner could see Beni integrating other functionality, like point-of-sale, so that users can transact through the module. She also noted that resale consumers want to shop more product categories, like home goods.

Secondhand shoppers have a strong affinity for children’s product, according to Mercari. “The resale market for kids’ and baby products is expanding rapidly—especially digitally—with economic challenges being a driving factor of this trend,” John Lagerling, CEO of the the online, peer-to-peer marketplace said. Mercari’s research with GlobalData shows that resale for kids’ and baby products, like apparel and footwear, is slated to grow from $7 billion in 2021 to $9.4 billion by 2025, on track for $12.4 billion by 2030.

Mercar’s March survey revealed that 62 percent of parents have purchased secondhand items for their children in the past 12 months. More than half of respondents (59 percent) said saving money was their motivation, while over 27 percent said that inflation led them to shop resale. Parents are also trying to recoup their spend on kids’ apparel and products, with half of those surveyed saying they also sold pre-owned products.

“Consumers are being mindful of their budgets and want to reduce waste, which are primary growth drivers in the secondhand market,” Lagerling said.

The resale boom is driving brands and retailers to develop their own secondhand channels. Trove now serves 700 stores in the U.S., from Arc’teryx to Eileen Fisher, Levi’s, Lululemon, Patagonia and REI, the re-commerce operating system announced last week.

“The re-commerce market continues to be one of the fastest-growing retail segments, propelled by consumers’ desire for more sustainable and affordable shopping options,” CEO Gayle Tait said. The California-based B Corp helps brands develop take-back programs for pre-owned products, as well as the infrastructure to facilitate secondhand sales and fulfillment. Resale platforms “enable brands to deepen their relationships with customers in real time and drive significant loyalty and lifetime value over the longer term,” she said.

Inflation is driving consumer demand for lower-priced, circular options, which puts Trove on track to nearly double its business in 2022, Tait said. During the first half of the year, the company increased its order fulfillment by 59 percent from the same period in 2021, and it has seen its client roster grow by more than one-third year-over-year. Lululemon and REI expanded their existing Trove-facilitated in-store resale programs this year, with the athleisure pure play bringing trade-ins to 390 stores. REI said that its re-commerce sales grew 86 percent from 2021, with in-store trade-in available at more than 170 locations.

Trove recently appointed Microsoft corporate vice president of global retail and consumer goods Shelley Bransten to its board of directors. “Re-commerce is growing faster than traditional retail because consumers are increasingly aware of the need for all of us to prioritize sustainability and extend the lifespan of products we buy,” she said at the time. “That makes it crucial for brands to take control of their own resale and take-back channels and maintain their direct relationships with their customers.”