Secondhand products and services have shed their image as the goods of choice for the thrifty and poor to be a staple of the retail market, bringing in nearly £7bn to the UK economy in the past 12 months alone.
According to a new study from Barclaycard Payments, retailers are reaping the rewards of ditching the “throwaway culture” that typified the market for so long, to capitalise on the so-called “Recommerce Economy”– consisting of renting, reusing and reselling. It reveals that three quarters (76%) of merchants are now offering a more sustainable shopping format.
Barclaycard Payments has partnered with economic analysts Development Economics, to combine thousands of consumer responses with demographic, retail and economic data from the Office of National Statistics, to calculate the true value of the market.
The analysis values the sector at £6.99bn, and, although this is just 1.6 % of the UK’s total retail market, it does support 49,000 jobs across the industry.
And with four in 10 (40%) consumers shopping more for secondhand items than they did a year ago, in addition to a further 57% saying their shopping activity has remained stable, the market would appear to be here to stay.
The second annual Recommerce Report from Barclaycard Payments found that eight in 10 retailers (82%) that offer rentals have noticed a boost in revenue since they started doing so; a further nine in 10 (89%) have seen their customer base grow and a similar proportion (87%) have seen profits increase. Those that offer such services report that, on average, a third (33%) of their revenue now comes from rental models.
The recommerce economy is also expanding beyond traditional methods as businesses take resales in-house. Of those that offer a more sustainable service, three in 10 (29%) retailers now provide a platform for customers to resell previously purchased goods which the business then sells on as a preloved product.
A similar number (31%) has added the option for customers to recycle products in-store, while three in 10 retailers (31%) offer a repair service so that customers can extend the life of their items.
Some retailers that offer a more sustainable service have also introduced swapping events for customers to exchange items purchased through the business with others (18%), and reselling platforms for customers to resell goods even if they were not purchased at the company (22%).
Nearly half (46%) of UK retailers have a resale option in place, and a further 27% are considering implementing one. Of those that offer resale, the most popular sectors are entertainment and electronics, such as laptops, headphones and musical instruments (47%); clothing and accessories (43%); home décor and houseware (41%) baby care and children’s market (35%); sports and fitness equipment (32%); and pet items (18%).
In response to the growth of online shopping, over half (52%) of retailers have invested in new technology to ensure a seamless recommerce shopping experience, with just under half of those (23% overall) having done so in the last three years. A further 23% are considering introducing this type of technology in the near future.
Interestingly, the cost of living crisis is only one of the motivators leading merchants to introduce secondhand or rental options, as they seek to provide more affordable means of shopping (46%) for consumers looking to ease financial pressures elsewhere.
Sustainability is also front of mind: one in three who offer more sustainable ways to shop have noticed a shift in consumer behaviour, increasing the demand for more diverse options (33%), while almost half (46%) want to minimise the impact of their business on the environment.
Barclaycard Payments managing director Linda Weston said: “Sustainability and the rising cost of living continue to impact merchant decision-making when it comes to the recommerce economy.
“Activity within this sector contributes significantly to the UK economy and our research highlights that merchants are increasingly taking interest in facilitating more sustainable and cost-effective shopping methods for consumers, actively investing in new technology as well as offering recycling or reselling platforms and services.
“Our data demonstrates just how beneficial this can prove to revenue and income streams amidst a challenging economic climate.
“As we continue through the golden quarter and retailers start looking to the year ahead, there is a clear opportunity to capture the demand for sustainable and affordable products and in turn drive loyalty and sales.”
Related stories
Brand new second hand: Brits turn to refurbed tech
‘Repair shop Britain’ puts used items on shopping list
Grocers must get smarter to fight shopping basket cuts
New tool provides insight into UK cost of living crisis
Crank it up: Skint Brits forced to fix their own motors
Can brands help consumers fend off financial crisis?
Healthy eating off the menu as Brits tighten their belts
