ReCommerce
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E-Commerce Trend 2022: The Rise of Re-Commerce

2021 – what a year! There are a lot of things that we’ll certainly remember for a long time. On the business side of things, the pandemic-related measures had noticeable consequences for retailers. The trend towards online trading increased rapidly. To illustrate, Dutch consumers spent 26.6 billion euros at webshops in 2020, a growth of 7 percent compared to 2019. The total number of online purchases in 2020 rose 27 percent to 335 million.

The e-commerce boom also triggered additional changes – e.g., in the market landscape. After a long period of consolidation, the competition increased, and new providers established themselves on the market. The study “The Marketplace World 2020” lists more than 170 different marketplaces in the DACH region alone – not to mention the numerous specialized online shops. At the same time, we saw a change in the purchasing behavior of many consumers. They are not only becoming more demanding, but they are also paying more attention to criteria such as sustainability. Observing these developments, we believe “Re-commerce” will be one of the megatrends for 2022.

What is “Re-Commerce”?

The term “re-commerce” is derived from the term e-commerce for “electronic trade” and the word re-for “again” and is also linked to the expression “reversed commerce”. It stands for the resale of returned, new or used products. These are usually checked and, if necessary, repaired or reconditioned and then sold again. This brings them back into the consumption cycle.

 

Grading process

Why re-commerce will be the number 1 trend

1. Corporate Responsibility

 

The UN Climate Change Conference in Glasgow showed once again that acting sustainably is not a luxury, but a necessity. Corporate Social Responsibility (CSR) has moved very high up on the 2022 agenda of many companies. On the one hand, many companies feel they have a responsibility and want to make a targeted contribution to a more sustainable economy and society. On the other hand, they are also made responsible by laws or regulations. These address for example the handling of products that contain electrical components: from smartphones and computers to coffee machines or refrigerators.

The topic of electronic waste is a sore point on the global and European sustainability agenda. Statistics estimate that we currently produce ca. 57,5 million tons per year and expect this number to reach nearly 75 million tons by 2030. The amended Electrical and Electronic Equipment Act (ElektroG) provides for new obligations to take back electrical equipment from 2022 on and to provide consumers with better information. As part of the Recycling Management Act (KrWG) in Germany, there will be additional obligations for dealers. This e.g. includes a ban on “removing electrical and electronic equipment from the market” (meaning destroying returned or defective devices) if they could still be used after repair or reconditioning. Therefore, in 2022 many manufacturers and dealers will have to deal with the topic of processing and reselling electrical products.

 

2. Consumer preferences

 

The growing awareness of global environmental problems also influences the shopping behavior of consumers: 66 percent of consumers in a current CapGemini study from nine different countries choose products or services because of their “environmental friendliness”. The younger generations of buyers, in particular, prefer brands that represent a deeper meaning and purpose in an authentic and comprehensible manner, and they also demand ethical behavior from retailers. According to analysts, the attitude of this group has a massive impact on consumer behavior. They use their influence and their purchasing power very consciously to enforce their own values.

Surveys show that more and more consumers are actively looking for used goods, refurbished, and resold items: Seven out of ten respondents said that they have tried or would like to try buying used, repaired, or reconditioned products. 84 percent of those who have tried this plan to continue shopping this way in the future. The interest in actively supporting a “circular economy” is even stronger among Generation Z and Millennials: Almost eight out of ten respondents said they had bought or wanted to buy used products.iii

The buyers themselves are thus a driving force behind the re-commerce boom in online retail. According to current statistics, 78 percent of consumers prefer to buy used goods online rather than in brick-and-mortar stores. Therefore, this year we saw more and more specialized re-commerce platforms as well as brands and online retailers who picked up on this trend. By 2022 we expect this movement to establish itself even more firmly in the mainstream.

 

3. New buyer groups and business potential through brand positioning

 

Tying one’s brand image to sustainable actions is becoming more and more important for brand positioning. In the increasing competition of the highly competitive e-commerce market, the conscious use of resources, such as returned products, offers a good opportunity to stand out from the competition.

At the same time, the re-commerce business allows companies to reach new consumer groups. Because, while 42 percent of consumers buy used or re-commerce products because they conserve resources, the attractive price also plays a decisive role. 56 percent of consumers want to save on purchases and 36 percent buy used products that they would otherwise not be able to afford.

Re-commerce products usually offer a particularly attractive price-performance ratio. For example, buyers can purchase a product with a small scratch or other marginal defects at a significant discount compared to the brand-new counterpart.

At the same time, the re-commerce sale of returns, overstock, or slightly damaged products is also more profitable for the providers than many previous practices. When such goods are traditionally sold to bulk buyers, the products often achieve less than 10 percent of their original value. As re-commerce products, after a quality check, evaluation, and processing (if necessary), the goods can be sold much more profitably to new owners via marketplaces, auction platforms, or their online shop. Companies that cannot handle this in-house can also work with a specialized partner to handle these processes.

The future of re-commerce

The number of specialized re-commerce platforms or vendors integrating re-commerce into their business practices grows and we are excited to watch how this evolution will continue in 2022!

For companies, re-commerce sales offer many advantages: For example, they can make a targeted contribution to a more sustainable economy and society, tap into new and especially young buyer groups, and detect more profitable ways of finding new buyers for returned goods and overstock than selling them off to bulk buyers.

At BuyBay, we are working towards our vision of Zero Waste in eCommerce. We see the more intelligent handling of goods and the optimization of returns management and related processes as an important step towards achieving this goal and we support our partners in finding the best solution for them.

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