UK sees a ‘recommerce revolution’
A new study by Barclaycard Payments and Development Economics has explored the impact of ‘recommerce’, discovering that this section of the economy generated just under £7 billion in revenue over the past twelve months.
The wider ‘recommerce economy’ was defined in the study as being “the actions of renting, reusing and reselling consumer goods and products rather than buying new.” With this taking place through physical or online distribution channels. The actions covered were renting (hiring items instead of purchasing new), reusing (buying second hand items), and reselling (selling used items rather than discarding).[i]
With consumers becoming increasingly mindful of both the financial and environmental implications of purchasing new, the trend for second-hand shopping is on the rise. 44% of UK consumers say that they buy more second-hand items than they did a year ago, while over half (57%) say their recommerce shopping behaviour has remained consistent.[ii] This, Barclaycard Payments suggests, means recommerce is here to stay.
The research finds that this growing trend for more sustainable shopping has contributed a significant amount to the UK economy, where in the past year £5.92 billion was spent on second hand products, and £1.07 billion on renting items rather than purchasing them new[iii].
The main motivator for this change in shopping habits stems from the rising cost of living, with 62% of consumers saying that this is causing them to think more carefully about the purchases they make, crucially this is up by 19 per cent year-on-year. However, notably the desire to adopt more sustainable shopping practices is also a significant motivator, with 43% stating this as a factor in their purchasing decisions.
“The rising cost-of-living and a shift towards more sustainable habits are changing the way Brits shop. Our data shows we’re increasingly opting to shop second hand, or rent items for a short period of time, rather than buying outright. The trend is permeating a range of sectors, from childcare to pet care and from fashion to fitness.” - Linda Weston, Managing Director at Barclaycard Payments[iv]
In a further sign that consumers are adopting the concept of a ‘circular economy’[v], many consumers who utilise resale platforms to sell their unwanted possessions are then using these funds to purchase second hand goods. On average, UK consumers are making £25 a month from selling their unwanted processions on online marketplaces or in-person, and almost a quarter (23%) of these sellers are then using their profits to purchase second hand items for themselves in the same setting.[vi]
Recommerce economy expands, as new business models emerge
In a sign of how the recommerce economy is growing in the UK, sports retailer Decathlon has recently launched its ‘BuyBack’ service to allow consumers to resell their old bikes back to Decathlon for up to 45% of the RRP in store credit. Used bikes will then be prepared for resale and placed on Decathlon’s Second Life marketplace[vii], the retailer aims to refurbish 15,000 bikes per year in the UK by 2025. Decathlon also hopes to extend its BuyBack offer to all product categories including kayaks, stand-up paddle boards, rackets and fitness equipment in due course. BuyBack is already operational in several other European markets, and the scheme has so far proven a success, with over 250,000 products refurbished so far.
The recommerce economy offers the potential for a range of new business models, and Linda Weston, Managing Director at Barclaycard Payments suggested that businesses need to take heed of the opportunity the recommerce economy provides, and must act to meet evolving consumer demands, she said:
“This demonstrates an exciting opportunity for the UK economy, as well as retailers, with more than a third of Brits saying they plan to embrace more sustainable shopping practices in the years ahead. In order to capitalise on this trend, businesses should think about how they adapt to provide consumers with a range of more sustainable and affordable ways to shop in the future.”[viii]
References
[ii] Ibid
[iii] Ibid
[iv] Ibid
[vi] Ibid
[vii] Buy Back - Decathlon
