Brands bet on the second-hand market

Sustainability has become one of the main positioning areas for brands. Companies from all kinds of industries are working to build models that are more respectful of the environment in their supply chains, while at the same time putting in place marketing systems and programs for their products and services that respond to the expectations of an increasingly conscientious, demanding and informed.

On the way to achieving the common goals set by the Sustainable Development Goals of the United Nations Organization, more and more brands and users are embracing movements such as the circular economy and upward trends such as second hand. And it is that according to the consulting firm Boston Consulting Group, this market will grow between 15% and 20% annually globally until 2026. In our country, it has reached a turnover of 110 million euros in 2020, without counting the automotive sector, which represents an increase of almost 25% compared to 2019, as indicated by the figures of the Spanish Confederation of Commerce (CEC).

The boom in the purchase and sale of second-hand items has been boosted, in the same way as electronic commerce as a whole, by the pandemic and an unfavorable economic situation derived from it that has led to the search for lower prices. low by consumers. However, it seems that it will be a new form of consumption that users will maintain in the long term, according to the report "The Change Network: new ways of consuming, living and leading sustainable development", carried out by Wallapop in collaboration with Ipsos, which indicates that 1 in 5 Spaniards say they will spend more on second-hand products than on new items in the next five years.

The growth of second-hand apps

The contribution to the sustainability of the planet, its more accessible prices and the wide variety of available offer seem to be the main motivations of those who turn to second-hand to make some of their purchases. According to the platform's analysis, among those who buy and sell second-hand, 57% admit that giving their objects a second life provides them with well-being. Of these, 55% attribute this positive feeling to the fact that it allows them to collaborate with the sustainability of the planet, 52% value that it represents a source of extra income and 41% feel that it helps other people.

All this has given rise to a notable growth of specialized platforms in the second-hand market. Wallapop closed 2020 with revenue growth of more than 50%, thanks to the consolidation of its monetization channels and its business model, and raised its company valuation to 690 million euros. For its part, Vinted achieved 250 million euros in a financing round last May, which raised the value of its platform, which already has 45 million users, to 3,500 million euros.

For its part, in the United States, where according to an analysis by GlobalData, 33 million people bought second-hand for the first time in 2020, companies such as Depop or Poshmark -both second-hand applications specialized in fashion- have captivated consumers of Generation Z and millennials. The first has users in more than 150 countries and 30 million users under the age of 26. Its 2 million active sellers sold $650 million worth of second-hand clothing and other fashion items last year, of which the app took $70 million. For its part, Poshmark has registered 81.8 million dollars in net income in the second quarter of this year and 7 million active buyers in the last 12 months.

All this growth of second-hand platforms and applications has put brands on alert, which for some time now, and especially in recent months, have opted to launch their own services for the sale of used products and articles or focused on reuse. Reverse or second-hand trade, present on the market for years, has now been renamed by some as recommerce, to refer to this activity but from the point of view of electronic commerce and digital transformation, since it is far from traditional markets and flea markets. , the business has moved to online portals and mobile applications.

Fashion bets on recommerce

The latest to join this type of movement has been the fashion firm Urban Outfiters, which has announced its plan to launch Nuuly Thrift, as a sister brand of Nuuly, the subscription shopping service that the company launched in 2019 Urban Outfiters' goal is to turn their customers into sellers within their own ecosystem and prevent them from resorting to selling their used clothing on other second-hand platforms. Nuuly Thrift will be released as an iPhone app this fall.

"Our job is to grow," said David Hayne, President of Nuuly and Chief Technology Officer of Urban Outfitters, according to The Wall Street Journal. “From an economic point of view, we know that if we don't provide the platform, we won't stop sellers from selling on other platforms. These secondhand experiences are happening whether we're playing in them or not." Products and items from Urban Outfitters and its brands, including Anthropologie and Free People, are popular in secondhand markets.

However, other traditional retailers have taken similar steps in recent times. In June of this same year, H&M expanded Sellpy's reach to 20 new European markets, including Spain. The Swedish firm acquired the online second-hand clothing sales platform in 2019 and has since invested up to 4 million euros in its international expansion. The service is available in Germany, Hungary, Italy, the Netherlands and Austria, among others.

“We see a constant growth in the demand for sustainable consumption, where the second hand is a great option. Each second-hand garment purchased saves resources for our planet”, commented Michael Arnör, CEO of Sellpy in February of this year when incorporating new markets to the activity of the platform. “So it is very exciting that we continue to grow and empower more customers in Europe to live circularly.”

For its part, in October last year, the clothing brand Levi's launched the Levi's Second Hand platform as a place where fans of the brand can go to find and buy used Levi's products. As the company explained at the time, “the platform gives products a second, third or fourth life and lets consumers know that they are getting something that is still in good condition and uses a fraction of natural resources. that would require a new pair.”

As reported by the company on the platform's website, if a customer brings worn Levi's that can be resold, they are offered between 15 and 25 dollars in store credit, a price that rises to 30 or 35 dollars if It is a vintage garment. The brand later listed the garments on the SecondHand marketplace on levi.com, selling them for anywhere from $30 to $100. For all this, Levi's has the support of the company Trove, specialized in recommerce, and which is responsible for cleaning clothes, inventory processing and order management.

Similarly, if the used clothing offered by customers is not in a suitable condition to be resold, the company offers $5 for a future purchase and sends the fabric to Blue Jeans Go Green, a company that converts the used garment into insulation. for buildings, a greener alternative to standard insulation. “Our industry makes too many clothes, period. And people wear their clothes less often. That's a disaster for natural resources: all the water used, all the chemicals, all the energy. It's not sustainable at all,” said Jen Sey, Levi's Senior Vice President and Chief Marketing Officer. “We make products that are built to last with timeless style. We can make them last even longer through SecondHand. This is a win for everyone."

For their part, other more traditional fashion firms, and to a large extent belonging to the premium or luxury segment, have chosen to associate themselves with the different second-hand platforms and applications that have appeared in recent years on the market. Thus, Gucci has teamed up with The Real Real to offer its customers the opportunity to purchase second-hand products from the brand, while Alexander McQueen has promoted the "Brand Approved" program with Vestiaire Collective, with which it facilitates and authenticates seasonal items. passes so that users can sell on the platform in exchange for store credit.

beyond fashion

Beyond the world of clothing, an industry that perhaps traditionally has the most deeply rooted mentality of reuse, other sectors have also recently joined the recommerce trend in a commitment to the circular economy. A line similar to Levi's is used by Ikea in its Buy Back service, launched in October last year, with which customers can return their used furniture to the brand. This offers up to 50% of the original price on a card for a future purchase in the store.

Also, in November, the Swedish company opened its first second-hand pop-up store in the city of Eskilstuna, in the ReTuna Shopping Center, where all the products sold are reused or recycled. The company's objective is, on the one hand, to promote its sustainability objectives and, on the other, "to inspire more people to live a more sustainable life within the limits of the planet, paving the way for the transition from a linear business model to a circular one.”

In the field of technology, where constant innovation tests the durability of devices, Media Markt has also opted for the second hand through the "New Life" initiative. As the company explains on its website, "NewLife offers us the possibility of advancing together to a more eco-responsible world, either by choosing one of our renewal plans, reselling your old mobile or buying a refurbished smartphone." Based on three fundamental pillars -Rerelease, Recycle and Renew- it offers consumers the possibility of giving mobile phones a second life.

Likewise, in the retail sector, Carrefour launched a collaboration with Cash Converters in March last year to promote the Carrefour Occasion initiative in the French market. From jewelry and books, to televisions or small appliances, the supermarket chain offers consumers the chance to sell their used items, which are valued by Cash Converters professionals to offer the best price. As the multinational highlights on its website, this service "is for all those who think that all occasions are good to give a second life to objects that they no longer use, but also for those who want to do good business!"

In this way, whether pursuing goals of sustainable transformation, as a way to defend their position in the market or to meet the expectations of responsible consumers, companies from all over the world and from various sectors have found in the second hand a way to boost their growth. In a context marked by digitization and the search for models that are more committed to the environment, this form of commerce has freed itself of its negative connotations and is consolidated as an alternative for brands and users in achieving conscious consumption.