How can brands be active in the second hand market for their products?
There are many benefits for brands that are active in the second-hand market for their products, from controlling brand image, improving sustainability, to new revenue models.
As the second-hand market becomes more popular, brands are starting to take notice. Indeed, it is the perfect example of circular and sustainable fashion since rather than being disposed of, products are resold and reused which extends their life and reduces the need for new products to be produced. Many brands are still unsure of how they can be active in this space, but there are a few things they can do.
The second-hand market today
The second-hand market is a thriving reality, with an annual growth rate of 39%. However, at the moment, much of the second-hand fashion market is managed by consumers themselves, who sell and buy items through social platforms (Facebook Marketplace), apps (Vinted), and specialised web sites (Vestiare Collective). The majority of brands take no active role in the second life of their products, although some of them have quickly understood the opportunity behind the second-hand market. For example, back in 2019 - before the pandemic caused online commerce to explode - Burberry and H&M launched reCommerce and rental projects.
As reported by the Resale Report 2022 by threadUP, the brands that resell their items increased by 275% between 2020 and 2021, but they are just a few: "we are still at the beginning of this trend”.
Why brands should be more active in the second-hand market
There are several reasons why brands may want to be more active in the second-hand market for their products:
To meet the demands of the consumer
People want to buy luxury items that elevate their wardrobe but without breaking the bank - they want quality at affordable prices. But there is more: many consumers today are interested in sustainability and want to make their contribution by both buying used garments, and selling their products as a means to fund new purchases. Why not give them what they want?
To protect brand image and reputation
Consumers search out discounted channels and both unwittingly as well as knowingly end up buying counterfeits as a more accessible way to wear the brand. Cultivating the second-hand market provides a more accessible and safer solution to both brand and consumer that can make a counterfeits a less appealing alternative, and ensure consumers experience the true quality of original brand products. The second-hand market however represents a massive opportunity for counterfeiters as a channel to convincingly dispose of fake goods. Brands must take care to remain in control of their brand in this market.
To increase engagement
Each time a product is sold as a second hand purchase, it is a consumer experience in which the brand was not present. These purchases represent an opportunity for the brand to still remain active in these moments, as we will discuss later in the article.
To be more sustainable
By encouraging the resale of second-hand products, brands can leverage their consumers to help to reduce the amount of waste produced each year.
To increase revenue
Up until now brands have been concerned by the on off sale of new products. But by taking an active role in the resale of their products, brands create opportunities to monetise the same product many times and increase the lifetime revenue of a product.
To improve market insights
The second hand market is where the new trends first take shape. It is the playground where the savants and opinion formers scout and gather garments to create new outfits and looks. Knowing which products are rising in popularity can provide brands with valuable insights to predict which products they should be bringing to market. Brands will benefit from insights to help them better create products that are timeless and evergreen.
What brands can do
There are three main things brands can do to be active in the second-hand market for their products: product authentication, product collection, and product resale.
Product authentication is a hygiene factor for brands wishing to improve their sustainability by encouraging the resale of their products. Without a trusted means to authenticate a product, buyers will apply a discount to compensate for the risk that they are taking. Where as products that can autonomously certify their authenticity help sellers to create trust and credibility in the product they are selling, removing doubts in the minds of the buyers. Products with a means of authentication are both more appealing and easier to sell, and command higher prices, so sellers are able to recover a greater amount of their initial investment.
Brands that endow their products with product authentication make them far more likely that they will become successfully resold and lengthen their product life, as well as helping to counter the threat from counterfeit products.
Solutions such as that provided by Certilogo, make it easy for consumers to instantly verify a products authenticity with their smartphone, and for sellers to demonstrate their product is genuine, even when they are selling it online. Certilogo's anti-counterfeiting technology is unique in being able to not only certify an authentic product's genuine status, but also to intercept fake products on the market.
During the authentication process, consumers can access content, services and experiences, which represent opportunities for the brand to engage with consumers that were previously out of reach. Consumers can register their products, providing new qualified leads to the brand, and opportunities to market services and products to a new extended consumer base.
To incentivise product engagement brands should offer quick and easy methods, such as QR codes and mobile apps, and incentives such as access to special content or a digital loyalty program.
Another way for brands to be active in the second-hand market is through product collection. This is when a brand collects used products from customers.
Product collection has several benefits for brands. First of all, it helps to ensure that products are disposed of properly and not just thrown away. Second, it allows brands to have more control over the second life of their products. Brands can then either recycle the products to create new ones or resell them.
Connected products with digital authentication, make it easier for consumers to return products to the brand, and for the brand to more easily check, process and sort returned products, without the risk of processing inauthentic items.
The third way for brands to be active in the second-hand market is through product resale. This is when a brand buys unsold products from retailers, and used products from consumers and marketplaces and resells them through their own brand channels. Brands can also decide to sell its product through a partner second-hand marketplace. This phenomenon is called reCommerce, a combination of the words "recycled" and "commerce", and it is a growing trend among brands.
By reselling second-hand products, brands can have total control over the second-hand market for their products. They can also ensure that items are of good quality and that they are being sold at a fair price. Indeed, there are a few things that a brand approaching reselling needs to consider. First, products must be cleaned, repaired and restored if necessary. Second, the brand needs to provide accurate descriptions of the products, including any imperfections. Finally, the price must be appropriate to the type of product and its conditions.
In general, brands should also consider offering a warranty for second-hand products. This would give customers more confidence in the products and could increase sales
By endowing their products with a smart digital ID, brands can make it easier for consumers to connect seamlessly to the most ideas reCommerce platforms, and publish their items for sale, automatically uploading the necessary descriptions and images, and certifying the products authenticity.