Reduce, Reuse and Recycle: Recommerce as an Opportunity in Online Retail

In the past, people tended to think of second-hand goods as “shabby” or “tatty”. These days, however, the second hand movement has become cool, a trend backed up by the rising popularity of vintage and thrift sales, clothing swaps, upcycling, and resale services. Rapidly growing second-hand online marketplaces like eBay and Vinted represent a new kind of circular economy service that helps consumers buy, recycle and reuse goods – a lucrative trend that has not gone unnoticed by the big online retailers. This blog explains how online shops can integrate recommerce into their e-commerce ecosystem with the help of APIs.

What is recommerce?

Put simply, recommerce refers to buying and reselling second-hand goods. Transactions take place mainly online and cover a wide range of products, from clothing to electronics to furniture. The reasonably sudden popularity of recommerce can be explained on the one hand by the high savings potential. This is an important consideration with the current cost of living. At the same time, the mantra of reduce, reuse, recycle is very much part of the megatrends of sustainability and conserving resources. This blog post looks at the opportunities in this booming business segment and shows how you can use APIs to integrate recommerce into your online store.

Why is recommerce important for the retail industry?

The increasing demand for second-hand goods goes hand in hand with the growing desire of consumers to minimize the environmental impact of excessive consumption. This is also reflected in the results of the Statista Global Consumer Survey 2021, which found that 44% –nearly half – of Germans had bought a second hand product in 2020. According to another Statista report, the value of the online resale market in the United States is forecast to exceed the value of offline resale by 2026. Electronics are particularly popular, followed by clothing, books and furniture.

Based on Ecommerce Delivery Benchmark Report 2023: Impact of inflation & consumer behaviour on online retail

Another current study has found that in 2023, over a quarter of consumers surveyed (26%) are planning to buy second-hand products more often or to use online resale platforms. These figures reflect a growing appreciation for a circular, sustainable economy which uses resources efficiently and minimizes waste. A successfully implemented recommerce strategy will therefore not only help increase customer satisfaction and loyalty, but also appeal to a new target group that is willing to invest more time and money in conscious, responsible consumption.

The advantages of recommerce

Sustainability

These days, there are ever more voices criticizing fast fashion, consumerism and the high consumption of resources that both entail. More and more consumers are basing their purchasing decisions on sustainability, environmental protection and social justice credentials. Passing on pre-loved items which still have life in them not only means that there is less going to landfill. It also means you don’t use resources to make new products. Recommerce makes a significant contribution to a circular economy in which products and materials are kept in circulation for as long as possible. It reduces the amount of raw material consumed and helps us all reduce our environmental footprint.

Reaching – and retaining – new target groups

Recommerce helps companies appeal to environmentally minded people who tend to reject classic consumerism. Instead, they have a strong interest in second-hand products and sustainability. They are often willing to invest time and money in more conscious and responsible consumer behaviour. By targeting their needs and interests, a successful recommerce strategy can help reach this relatively hard to reach target group. However, it is also important to consider sustainability in both marketing and product development in order to credibly position a company as a reliably eco-conscious market player. A company-branded second-hand platform to sell and swap pre-loved items from previous collections gives you another opportunity to increase your environmental credentials and helps increase customer retention.

How does recommerce work?

There are many sides to recommerce, ranging from the classic second-hand platforms to innovative refurbishing concepts and cashback campaigns. Online marketplaces, for example, give private sellers the opportunity to sell on pre-owned products. This type of reselling is similar to the classic second-hand trade of old and lets buyers purchase used items in good condition at a reasonably low price.

Refurbished goods mean that the online retailer has bought back its own products replaces or cleans components as necessary and offers them for sale again – generally online – after quality assurance checks. This is an opportunity for customers to buy clothing from a previous collection at a lower price, while being assured that the quality of the items has been guaranteed by an authentic partner. This type of recommerce is also valued by large chains. Well-known examples include H&M Pre-loved and Zalando Pre-owned.

Other stores let consumers return used or even damaged goods to a company to receive a discount on a new product. C&A has invited customers to trade in their old jeans for a voucher for 10% off a new pair of jeans. These old jeans were recycled and used as raw material to make new jeans. Such cashback schemes go a long way to reducing the amount of waste produced and optimizing resources.

How can you add recommerce to an existing online store?

Online traders looking to integrate recommerce need to adapt their systems and processes to support this. In most cases, retailers will need to at least extend their current online shop with a platform where customers can offer their second-hand items for sale. This platform should be as easy to use as possible and include transparent pricing so that customers can immediately see what they could get for their second-hand goods. Furthermore, traders need to be able to check the quality of the second-hand products and make sure that they meet customer expectations. Specialist software and tools, such as price comparison and rating platforms, enable customers to compare prices and valuations of second-hand items.

However, integrating second-hand products into an existing shop system also requires a rethink of how you handle merchandise management. Online traders need to ensure that they have enough storage capacity to accommodate and manage the influx of second-hand items. In addition, they need to check their inventory regularly and have a process for clearing out items as necessary to make room for new second-hand items.

Image 1: How SEEBURGER provides a typical recommerce provider with full lifecycle API management.

How do APIs enable recommerce?

APIs enable data flow between different applications, platforms and systems. This not only optimizes the sales process, but also lets you offer your customers a greater range of services. Crucially, they enable retailers to sell their products on several platforms at the same time and customers to post and sell their used items on retailers’ platforms. However, they can also be used to integrate payment systems or logistics service providers into the workflow. Wherever they are used, APIs facilitate smooth data flows and make it easy to manage multiple used goods listings.

Behind the scenes, an API management system keeps track of API traffic, ensures that APIs can be reused and documents who/what system is using them at any time. API management is essential to successfully integrating and managing APIs, and ultimately delivering a smooth workflow and a positive user experience.  Its importance to recommerce and in digital transformation projects in general cannot be exaggerated.

How SEEBURGER helps 

B2B e-commerce is experiencing dynamic growth. This makes it all the more important to integrate attractive new fields such as recommerce quickly and easily. End-to-end integration, as offered by the SEEBURGER BIS platform, lets you continue to expand your e-commerce business and integrate new systems on an ongoing basis and with minimum fuss. Exploit the full potential of API-based connections and consolidate all the systems and business processes for your online offering on one single platform.

Source: https://blog.seeburger.com/reduce-reuse-and-recycle-recommerce-as-an-opportunity-in-online-retail/