Expect a Rise in Recommerce in 2023, and Here’s Why
The e-commerce industry has grown massively over the last few years, in part due to the COVID-19 pandemic. However, there’s another subsidiary trend that has risen dramatically in 2022 and that will likely continue to grow in 2023: “recommerce.”
If you’re not sure what recommerce is or what it might mean for your business’s future, read on. This article will break down everything you need to know about recommerce and its incoming rise in 2023.
Simply put, recommerce (also known as “resale commerce”) is an e-commerce practice that means buying and reselling preowned items, typically at discounted rates.
Recommerce has expanded from being primarily the domain of brick-and-mortar or retail stores to online marketplaces. Of course, reselling presold products is nothing new. Vendors have bought products already sold to one user before, then resold them at lower prices for centuries. But with the tools and reach afforded by online shopping and e-commerce infrastructure, recommerce has now come to the digital domain and is more successful than ever.
Think of selling a product line of pre-used, vintage clothes to customers looking for hipster style or pre-owned stuff to reduce their carbon footprints. Or think of selling recommerce products like pre-owned tools, furniture, and other household goods for those shopping on a budget. Those are just two examples of target audiences you can reach with a new e-commerce selling strategy.
How does Recommerce Business Work?
Recommerce businesses take various forms and fulfill different needs depending on their target customer groups. Here are some examples of how recommerce businesses work:
- Peer-to-peer or P2P marketplaces. Peer-to-peer recommerce marketplaces connect consumers with those who have presold or used products so they can directly transact with each other. Examples include Craigslist and Facebook Marketplace.
- Managed recommerce solutions are more in-depth and comprehensive as they require brands or sellers to go through rigorous verification processes. Examples include The RealReal and Rent The Runway.
- In-house recommerce programs, which are run by brands that offer other e-commerce products. For instance, Patagonia and Levi’s both have their own in-house recommerce programs. These are beneficial since they allow brands to keep selling pre-used or pre-owned products within their selling economies, making more money as a result.
The Rise of Recommerce in 2022
Recommerce experienced a meteoric rise throughout 2022, partly because any stigma of purchasing pre-owned clothing and other products has diminished. Nowadays, people are more than comfortable purchasing things someone else has used previously, provided those products are still in good condition.
According to one source, a whopping 93% of consumers are interested in recommerce products because they can be purchased for less cash. Most customers say that high prices affect whether they will buy or sell pre-owned products to save a bit on their monthly budgets.
The recommerce industry grew to around $178 billion in 2022 compared to $160 billion in 2021. The market is expected to grow to nearly $289 billion by 2027. That’s a growth trend your company should definitely hop on!
Why will Recommerce Continue to Grow in 2023?
Those numbers are impressive, but you might wonder whether you can count on the recommerce industry to keep growing in 2023. Here are a few reasons we believe recommerce will continue to experience high growth and a rise in profitability in the years to come.
It’s Cheaper for Consumers
For starters, the recommerce industry is often cheaper for consumers, particularly those looking for products like clothes and furniture. Many of these product categories can be pricy, but recommerce sales are usually much cheaper.
If the brand or marketplace is trustworthy and the product is still in good condition, customers can get away with saving a ton of cash while also purchasing products they need in their everyday lives. It’s a win-win for everyone involved.
It Offers Marketing Benefits
Pursuing recommerce may also yield marketing benefits for your brand. Since recommerce revolves around purchasing and selling secondhand products, you can highlight this fact as yet another way your brand pursues sustainability and eco-consciousness.
More and more customers want to buy products that don’t put too much pressure on the environment. Even more don’t want their products to simply end up in a landfill when they are done using them. By buying and selling recommerce products, you do your part to ensure that things aren’t unnecessarily thrown away and connect consumers to pre-owned products they can still use and enjoy.
Brands Have Greater Reach
The above benefit will help your brand enjoy greater reach to its target audience members, particularly if your primary customers are young and middle-aged adults of the millennial and Gen Z generations.
Many younger consumers are highly concerned about the environment and global warming. Recommerce allows them to shop to their hearts’ content without compromising their ideals. In this way, offering recommerce products enables your brand to be a more attractive option relative to its competitors.
With greater reach, you’ll expand your customer base, which leads to the next big benefit and the reason why recommerce will continue to grow…
Recommerce Results in More Revenue
There are many ways to make more revenue and cut costs, like choosing a business bank account with features like automated spending tracking and savings accounts with good interest rates. But you can also use the resale commerce model to bring in more revenue, which will help you stay in the black throughout 2023 and beyond.
Indeed, when you resell pre-used products, you’ll gain access to an additional source of revenue that doesn’t require you to expand as many resources as it does to create new products from scratch. For example, if you run an in-house recommerce program, you can sell a product once, then host the sale for reselling the product from the original buyer if they decide they no longer want it.
Alternatively, you can make your own recommerce brand that exclusively sells pre-owned products. In either case, there’s certainly a market for these kinds of products, both among the budget conscious and the folks who simply want to reduce their carbon footprint and do their part for the environment.
As you can see, recommerce is here to stay, and it might pay for you to lean into this market trend sooner rather than later. With the right business plan, you can start your own recommerce marketplace or product line, even if you don’t already have an online store.That’s where CS-Cart comes in. With our marketplace platform, you can quickly and easily build an online marketplace for recommerce or traditional e-commerce products, depending on your preferences. Check it out today and consider launching your new online enterprise ASAP!