Day: June 10, 2025

The concept of a second life for products is not new. People have been thrifting, consigning, and vintage shopping for a long time. In some instances, items like clothing from well-known designers can even have a higher value the second time around. In essence, recommerce and a circular economy have been around for a while.What has changed, however, is where and how gently loved products are sold. For example, some brands are taking their items back and reselling them. Recommerce pioneers like Eileen Fisher, Apple, IKEA, REI, and Patagonia have all explored different methods of offering a more sustainable and/or affordable shopping experience. But now, as a rising number of consumers value eco-friendly ecommerce practices, recommerce and a circular economy have become more popular, and new tools and partners are letting brands implement recommerce and product recycling programs more easily. The rise of recommerceAccording to Statista, in 2024, the recommerce market (including things like apparel, electronics, furniture, etc.) in the United States was estimated to be worth more than 200 billion US dollars, an increase from nearly $140 billion in 2020. That growth is expected to continue, with a forecast close to 292 billion dollars by 2029. Moreover, in ThredUp’s 2024 Resale Report, online apparel resale is expected to more than double in the next 5 years, growing at a CAGR of 17% to reach $40 billion in 2028.The growth of recommerce and the circular economy makes it worthwhile for brands to take a close look at whether it’s a good option for their products and how to implement a successful program.Understanding recommerce and a circular economyRecommerce, in short, is “reverse commerce.” It encompasses the buying and selling of pre-owned or refurbished products through digital and physical channels. Recommerce often involves buy-back, trade-in, rental, leasing, or subscription of products, and aims to reduce the amount of waste in landfills. Recommerce is part of the circular economy. The goal is to move away from a linear product lifecycle and extend an item’s life. This is done through reuse and regeneration, demanding that products be more durable, repairable, and recyclable. In the circular economy, a product may be resold (like an apparel item) or regenerated (turned into something new). Consumers are drawn to recommerce and the circular economy because it:Extends product lifecyclesReduces wastePromotes sustainable actions like reuse and recyclingConserves resourcesIt also offers some excellent benefits to both brands and consumers. Brand reputation increases through sustainability efforts, and a new revenue stream is unlocked. Consumers can shop ethically while finding unique items and afford higher-end products they might not be able to otherwise. Furthermore, secondhand is often where consumers turn in an unstable economy, making recommerce a worthwhile endeavor for both brands and customers. Tariff troubles and the case for circularIn 2025, diversification has become a key theme in the retail industry. As brands deal with ongoing ups and downs (think pandemic, port issues, tariffs), it’s essential for them to find ways to be nimble. By creating alternate strategies to deal with challenges and disruptions, retailers are more likely to see continued success.Currently, on-again, off-again tariffs have taken a toll on the industry. While diversifying suppliers and building a strong and agile supply chain are helpful, it’s also crucial to find new revenue streams. Circular economy strategies like resale, refurbishment, and repair can reduce the dependency on new imports. Moreover, through recommerce, brands can maintain inventory availability and profitability by building a thriving program. Tariffs affect both brands and consumers, driving new needs and behaviors. For example, it’s common for consumers to start “thrifting” as prices skyrocket and the economy slows. For retailers, the need for revenue demands new strategic opportunities, like recommerce. And right now is a good time for brands to explore buy-back programs, refurbished product sales, and launch a recommerce program online and/or in-store. Experts are predicting a secondhand boom, meaning brands can leverage the potential.Why consumers are all inMore consumers than ever desire sustainable and affordable goods. When the economy faces challenges and disruptions drive up prices, customers look for deals while buying from brands with a mission. These are only a few reasons consumers are all in for the circular economy and recommerce. Breaking it down further:The demand for sustainability: There is a growing global demand for sustainable products, and items that are resold, refurbished, or made of recycled materials fit the bill. According to McKinsey & Company, a recent study by NielsenIQ found that 78 percent of US consumers say that a sustainable lifestyle is important to them.Consumers like mission-driven brands: People respond to a brand’s reputation. For instance, 71% of consumers said they’d buy from a purpose-driven company over the alternative if cost and quality were equal. For younger consumers, purpose, value alignment, and a brand’s positive impact create trust and a deeper connection. This drives them to seek authentic brands that display accountability and action.Cost matters in a tough economy: Let’s look at the economy’s impact on apparel sales. Price is a priority, and in 2024, 55% of consumers said that if the economy didn’t improve, they’d spend a higher proportion of their apparel budget on secondhand. When the economy takes a hit, consumers face reduced spending power and begin to prioritize needs and seek value. Brands must adjust accordingly, even as they face their own financial challenges.Getting started with recommerceA circular economy can benefit both consumers and brands, but before diving in fully, it’s important to take a few helpful steps. Audit products for resale potentialBrands should start by assessing products and cataloging them: gently used, returned, refurbished, overstocked, etc. Look at which products have a long lifespan or high resale value. This step will also determine the criteria for what condition and usability are brand standards for recommerce. Build a reverse logistics workflowTo successfully launch a recommerce program, brands must have a system for collecting returns, inspecting items, and routing them through cleaning, repair, refurbishment, and repackaging as needed. Logistics partners play a critical role in this step. Identify sales channelsNew tools and channels are facilitating the recommerce industry. Brands now have options to resell directly through their website, partnering with platforms like ThredUp and Trove, on marketplaces, or in-store. Retailers can decide whether they want a more branded experience, what level of control they want, and which recommerce solution gives them the most exposure.Design the recommerce customer experienceLike any aspect of the customer journey, the recommerce customer experience must be well-defined and seamless. Set expectations around returning, reselling, and trading in items. The more transparent you can make the experience, the better. Simplify participation through things like pre-labeled returns, intuitive interfaces, and incentives. Bolster these efforts with the right messaging and value. How 3PLs power the circular economyMany of today’s 3PLs are evolving to handle the varying needs of brands beyond traditional fulfillment. When assisting brands in the circular economy, they’ll help with returns handling, refurbishment, resale prep, grading, and repackaging.One of the most helpful components is reverse logistics, which plays a large role in simplifying recommerce. And when a tech-enabled 3PL is used, it integrates with resale platforms, data tracking, and circular inventory management. The future is circularToday’s retail climate is full of disruptions, ups and downs, and a need for agility. The more brands can diversify, add new revenue streams, and build a reputation through purpose, the better the chances for continued success are. If you’re ready to turn returns and slow-moving inventory into new revenue streams, talk with a fulfillment expert who knows how to close the loop and open up new growth.

Day: June 10, 2025

Recommerce and the Circular Economy: The Future of Retail

Recommerce and the Circular Economy: The Future of Retail