The Covid-19 pandemic likely influenced both retailers and shoppers toward more resale, according to Marcus Shen, COO of B-Stock, the world's largest B2B online platform for resale merchandise.
"The pandemic certainly hurt brands and retailers from two angles: supply chain issues causing them to miss an opportunity to sell inventory in season, and a strain on demand due to the economic crisis," Shen told Retail Leader. "This economic crisis further fueled consumers' focus on getting a good deal."
The unemployment impact of the pandemic may also play a role in the surge in demand, coupled with the rising desire to reduce carbon consumption.
"Many consumers saw their income dramatically impacted by Covid-19 and the subsequent lockdowns and were forced to be more thoughtful about spending," Shen said. "Consumers have leaned heavily into thrift and off-price. The growth of secondhand retail has been outpacing primary retail for the past couple of years and is likely to continue."
With the rise of conscious consumerism, brand loyalists may not have the appetite or ability to pay full price in the current environment; plus, sustainability and buying used have become cool, particularly with the coveted Gen Z buyer base.
Vancouver-based lululemon announced its recommerce initiative in mid-April as part of its overall sustainability agenda, which it calls its Be Planet pillar and focuses on better products for people and the planet. The trendy athletic wear brand saw a huge surge in demand in 2020, with sales skyrocketing 21% in the fourth quarter of 2020. For the year-end, the company saw net revenue rise 11% to $4.4 billion.
On the resale side, lululemon ranks among other brands like Patagonia, Ray-Ban and The North Face when it comes to resale value, according to ThredUp. Its new recommerce market, lululemon Like New, allows consumers to trade in gently used lululemon items at one its 80-plus participating stores or through mail in exchange for an e-gift card. The online program launches June 2021. Consumers can also purchase Like New items, which are up to 50% off the normal price. All profits from the Like New program will go toward lululemon’s sustainability initiatives, the company said.
Before online secondary marketplaces became prevalent, Nike was the dominant resale footwear brand, with huge secondary markets. Some specialty, limited-edition Nike shoes reap enormous sums on secondary markets as collector’s items, such as a pair of Nike’s collaboration with rapper Travis Scott asking for more than $1,700 on a secondary website. Released in May 2019, the shoe originally retailed for $175.
With high resale prices, it makes sense Nike would finally want to collect some of the resale value. The brand announced its recommerce move earlier this month, Nike Refurbished, which allows consumers to return a pair of shoes that are then tidied up by Nike and placed back up for sale at a lower price. Like lululemon, Nike markets the offering as a solution “at scale to help reduce its carbon footprint.”
“Once the shoes land back in a Nike store, the price is based on footwear type and condition grade,” Nike announced. “Handy messaging on the boxes make it easy to see what kind of shoes are inside, the condition grade, and more."
The Refurbished plan will first launch in 15 Nike stores, with more plans to expand later. Shoes that aren’t in condition to be resold will be donated or recycled when possible by Nike.
Both lululemon and Nike announced their plans around Earth Day 2021 (April 22), ensuring their messaging to consumers was based around sustainability efforts. In reality, the brands will also recapture a portion of revenue from consumers who already love their products.
"Brands are beginning to see the need for sustainable consumption, these secondary markets not only keep items out of landfills but now add new buyers and additional revenue streams," Shen said.