Sustainable Retail: Recommerce moving in the right direction

Welcome to the latest sustainability column that takes a look at what retailing is doing to address the issues in its industry. Much of the ongoing focus will be on fashion but not exclusively.

This month’s column takes look at the progress of the markets in renting, reusing and reselling of goods that is beginning to have an impact on the broader retail industry.

We are very pleased to bring this series of columns to you with the much appreciated support of our sponsor Prolog Fulfilment.

Renting, reusing and reselling has grown to account for almost £7 billion of retail sales in the UK as a growing number of retailers embrace this new way of trading and integrate it within their existing operations.

According to Barclaycard Payments this figure represents 1.6% of the total retail market and has helped create 16,000 new jobs in the retail sector sub-category of what the company calls recommerce.

The growth in this area has come from an increased desire for non-new goods by consumers, with 40% of people now shopping for second-hand or renting goods more often than they did a year ago. On top of this, as many as 57% of people stated their recommerce activity will remain stable on last year.

Tapping into this demand, as many as 46% of UK retailers now have a resale option in place and a further 27% are considering implementing one. The most popular sectors are entertainment and electronics, with 47% of companies offering such a service, followed by clothing and accessories at 43%, home décor and homewares at 41%, and the baby care and children’s market at 35%.

H&M is among the many companies becoming more active in the market as it has recently launched a pre-loved fashion range initially in its London store that sits alongside a rental offering. Meanwhile, Decathlon is to roll-out its buyback service to stores, which involves credit given to shoppers returning old goods, which will then be sold as pre-loved.

This all contributes to what is arguably a critical mass of activity in the UK market and this is reflected in the trading activity of retailers around rentals. As many as 82% of companies that offer such a service have enjoyed a boost in revenues since they began providing it, and 89% have seen their customer base grow, while 87% have seen their profits grow. One of the most startling findings is that retailers who offer rental services derive on average 33% of their revenues from the proposition. Nobody’s Child is among the latest of a growing band of brands to offer a rental service, having recently teamed up with specialist platform Hirestreet.

Highlighting the growing commitment of retailers to recommerce is that many have brought the services in-house rather than being outsourced, which was invariably a more disjoined experience for shoppers and seemed to suggest retailers were not taking it seriously.

The Barclaycard research found that of those companies that provide a more sustainable service 29% now provide a platform for shoppers to resell previously purchased goods, which the business then sells on as second-hand product. Meanwhile, 31% have added the option for customers to recycle products in-store and 31% offer a repair service to extend the life of products.

Nobody’s Child rental

Recent launches of repair services have involved Fat Face, which has teamed up with Clothes Doctor to launchFat Face Repair Renew, and Dr Martens, which is in a partnership with The Boot Repair Company that follows on from its ReSouled scheme, which the company launched with Depop.

Operating recommerce activities in a seamless manner with the core business invariably requires investment and the research showed 52% of retailers have committed funds to new technology to ensure they deliver just such a shopping experience for customers. A further 23% are considering investing in the relevant technology in the near future.

This level of engagement by both consumers and retailers with renting, reusing and reselling of goods is a vote of confidence in the sustainability of the retail industry. But clearly there is much more to do if the recommerce market is to move markedly above its current 1.6% share of the sector.

Glynn Davis, editor, Retail Insider

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