A new study from Barclaycard Payments has revealed that retailers are capitalising on the growing ‘Recommerce Economy’ – consisting of renting, reusing and reselling – as 76% of merchants now offer 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 Recommerce Economy.
The analysis found the growing trend of more conscious consumerism has contributed significantly to the UK’s economy, bringing in £6.99bn in the last 12 months alone. Analysis of the recommerce market found that this activity contributes 49,000 jobs across the UK retail sector and makes up 1.6% of the UK’s total retail market.
The rise of the recommerce market shows no sign of slowing down as four in 10 consumers shop second hand or rent items over buying brand new more often than they did a year ago. A further 57% say their recommerce shopping activity has remained stable, suggesting the shift in the way consumers shop is here to stay.
The second annual Recommerce report from Barclaycard Payments found that 82% that offer rentals have noticed a boost in revenue since they started doing so; a further 89% have seen their customer base grow and a similar proportion (87%) has seen profits increase. Those that offer such services report that, on average, a third of their revenue now comes from rental models.
Circular shopping methods prove a success for retailers
The recommerce economy is expanding beyond traditional methods as businesses take resales in-house. Of those that offer a more sustainable service, 29% 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 offer a repair service so that customers can extend the life of their items.
Innovative retailers who 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 re-sell goods even if they weren’t purchased at the company (22%).
The sectors at the forefront of the Recommerce market
Over two fifths 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%)
- Pet items (18%)
The key motivators for second hand sellers
The cost of living is one of the greatest motivators leading merchants to introduce second hand 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 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.
“Sustainability and the rising cost of living continue to impact merchant decision-making when it comes to the Recommerce Economy,” said Linda Weston, managing director at Barclaycard Payments.
“Activity within this sector contributes significantly to the UK Economy and the 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. The 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.”
Learn more about recommerce in the DeliveryX Top1000 Europe 2023 report, available to pre-register for now. Download the full report to discover how retailers like Seasalt, Zara, Decathlon are offering repair and resale services to remain competitive, enhance customer satisfaction, control costs and adapt to changing market conditions.