Re-commerce offer booms as consumer behaviour evolves - Barclaycard report
Re-commerce — that is, rental and resale — is booming as retailers and brands wake up to evolving consumers who want to see more sustainable options when they shop.
And setting up re-commerce seems to be paying off with retailers gaining revenue and new customers.
A new Barclaycard report says that seven in 10 businesses now offer more sustainable shopping options, “giving rise to the ‘Re-commerce Economy’ of recycling, renting, reusing and reselling”.
A third of retailers agree that increasing environmental awareness and the rising cost-of-living are driving re-commerce growth and two in five retailers have created a product rental model, while almost a quarter are looking to set one up as its popularity grows.
More than half of retailers also report a fall in returns, reversing the ‘serial returner’ trend that gathered pace during lockdowns.
Barclaycard Payments, which processes £1 in every £3 spent on credit and debit cards in the UK, found that of the 71% of businesses surveyed that now offer recycling, renting, reusing or reselling shopping options, 36% have introduced more sustainable ways to shop in just the last 12 months. And 89% plan to expand their options in response to growing demand for more affordable and environmentally-friendly shopping alternatives.
In some cases the provision of re-commerce options has been driven by retailers wanting to give customers more affordable choices (37%), but 44% are doing it to reduce their own impact on the environment.
As mentioned, 40% of UK retailers surveyed now have a rental model in place, of which 61% launched in the last year, while a further 23% are considering setting one up.
And of those that have introduced a rental model in the last 12 months, 90% “have benefited from an increase in revenue” while 89% have also seen their rental customer base growing, at an average increase of 31%.
Some 39% of retailers also now have their own reselling option in place, enabling customers to buy and sell second-hand items, with 23% having introduced them in the past year, while a further 26% are considering setting one up in the coming months.
The most common items available to rent include jewellery (27%), designer clothing (24%), suits (24%), designer bag (21%) and wedding dresses (18%).
That said, we've already heard from luxury department store Selfridges, that a key rental category for adults has been ski clothing (which doesn't figure on the list here given that it's not something most retailers sell).
Meanwhile, Barclaycard also said that the most common products available to buy pre-owned from retailers are clothing in top spot on 29%, designer bags on 28%, jewellery on 27%, and designer clothing on 25%. There are also non-fashion items on the list, but other fashion-relevant categories in the top 10 include suits in sixth place on 18% and wedding dresses in eighth place on 16%.
As for that statement about ‘serial returners’ being in retreat, Barclaycard said that despite many retailers reporting higher returns rates post-pandemic, overall, 56% of retailers have reported a drop in return rates in the past year. And the number of items returned is down 14% compared to 12 months ago.
Over a third of retailers (34%) attribute this shift to consumers making more mindful purchasing decisions. Other reasons cited include buying less overall owing to the rising cost of living (26%), making more environmentally-friendly choices (23%), and the increasing use of reselling platforms for unwanted products that aren't returned to the store (23%).
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