Have you bought anything pre-owned online yet? Resale is a large and fast-growing segment of e-commerce. According to Statista, online sales of resale items were projected to exceed $77B in 2022 and rise to almost $200B by 2030. Online resale revenue will exceed offline by 2026.
Online retail is the fastest-growing segment of the second-hand market, according to the 2022 ThredUp Resale Report. The study showed that North America leads the world in the growth of second-hand retailing, with a rate 6X the global average.
In the US, resale has achieved tremendous levels of household penetration. The ThredUp study revealed that 57% of consumers resold apparel in 2021, and half of those who have not yet resold say they are open to it. On the buy side, 74% of consumers said they have shopped or are open to shopping for resale apparel, and 55% reported purchasing it in 2021. ThredUp says the resale market accounted for 9% of US apparel sales in 2021 and will increase to 18% by 2031.
Definitely Not Rundown Thrift Shops
A growing number of dedicated online resale marketplaces and retailers are driving this trend. They offer appealing merchandising, excellent quality standards, and attractive marketing messages. Most are building elite and smart brand images emphasizing the quality, desirability, and prestige value of the goods available at highly accessible prices. Sustainability is also part of the appeal for several of these brands.
Luxury Goods are Front and Center
Even a quick examination of these sites will convince you that access to luxury brands is core to their appeal. Marketplace users emphasize luxury brand names whenever possible and often try to mimic the visual style of luxury ads and magazines. Top brands that have created resale shops, like Eileen Fisher and lululemon, work hard to ensure their online presentation sends the same quality signals as their new item stores.
For many consumers, online resale shops provide access to items that are sometimes out of reach. These customers are highly motivated by luxury brands and leverage resale to buy more of the pieces luxury seek out.
Resale offers an accessible way to purchase high-end goods and can act as an entry point for luxury shopping.
Cash Back and the Luxury Buyer
Vogue Business says cash back is appealing to most prestige brand shoppers. Almost two-thirds of luxury buyers say they plan to use cash back sites like Rakuten for purchases in the next year.
The study also showed that recent economic headwinds have prompted more luxury shoppers to use savings strategies like trading down brands, waiting for sales, or purchasing fewer luxury items.
“Thirty percent of luxury shoppers in the US said they would consider slashing their designer spend, with around 20 per cent anticipating a switch to less expensive products and brands over the next year. American luxury consumers are also likely to be more discount savvy, with 46 per cent expecting to hunt for sales and discounts to fund their designer purchases.”
Resale merchants can capture these value-sensitive luxury buyers by appealing to their brand passions and love of deals.
The cash back member mindset perfectly aligns with the resale model. Cash back customers love to shop and care deeply about brand names and quality. They view cash back as a “smart” buying strategy that empowers them to use rewards to purchase more things they love. The same motivations propel cash back usage as resale shopping. According to Vogue Business,
With thousands of designer deals on the line, Rakuten’s Cash Back programme has the potential to impact buying behaviour across the user experience funnel — right from discovery to loyalty. For luxury brands this translates into an opportunity to not only attract consumers with a propensity to switch, but also build long-term loyalty and increase customers’ lifetime value.
Dozens of the world’s top luxury merchants work with cash back communities like Rakuten to gain promotional lift while safeguarding brand equity. Cash back encourages customers to have ongoing relationships with those brands. Kristen Gall, Rakuten President, said, “Retailers need to be investing in rewards strategies that provide the value consumers are looking for in the short term while pulling those shoppers into the brand’s ecosystem where they can cultivate a longer-term relationship.”
Tools to Achieve Any Goal
Rakuten offers many ways for resale merchants to drive outstanding sales from our members. We consult with each advertiser to craft programs that deliver revenue scale and contribute to goals like customer acquisition, repurchase, and shopper loyalty.
Rakuten has the largest cash back community in the US, with more than 17M active members. We offer a range of strategies and tactics, from cash back strategies, to personalization and targeting solutions, and media to drive outcomes from your business and complement onsite activities..
Get in touch with your Rakuten representative for more information on how we can help you achieve your goals. Or contact us, and we’ll schedule a consultation.