The rise of reCommerce: Generating additional revenue for your online store

For online retailers, the average annual return rate is currently 20.8% — and this figure continues to grow each year. In these situations, retailers often recycle or dispose of the returned item, depending on its condition. However, many eCommerce companies are now starting to adopt a more sustainable and lucrative approach: Reselling those returned products on their site for a discounted price.

By embracing the growing popularity of reCommerce among consumers, especially those of Generation Z, your business can reduce waste, lower inventory management costs, increase sales, and ultimately facilitate a better customer experience.

Let’s take a closer look at the rise of reCommerce and how it can benefit your online business in 2022.

What is reCommerce?

ReCommerce — also known as resale eCommerce — is the process of selling used or previously-owned items online. This is typically done by consumers, for consumers via reCommerce websites such as Poshmark, ThreadUp, Depop, and RealReal — as well as more traditional marketplaces like Amazon and eBay.

Now, brands like H&M, Adidas, and Patagonia have launched their own reCommerce initiatives — creating a more dynamic online shopping experience for their customers. For example, Patagonia recently deployed a subdomain of its online store called Worn Wear, where users can not only purchase discounted products but also trade in their used clothing in exchange for store credit.

The most common items resold online are brand-name clothes, designer handbags, shoes, vintage items, jewelry, video games, and electronics.

By 2024, experts predict that the online resale of apparel products alone will be a $64 billion industry. This trend is sure to change consumer behavior, as more and more online shoppers will prefer to shop with brands that prioritize sustainability and offer second-hand items at a discounted price on their website.

How do online stores engage in reCommerce?

Let’s say you own an online clothing store that deals with a high amount of returns. And at the beginning of every spring, you have leftover jackets, beanies, gloves, and other out-of-season items that are difficult to sell at their original price.

Rather than throwing these items away or sending them back to the distributor, you could try listing them on a reCommerce marketplace like Poshmark. This is a fine way to clear out your inventory. However, as with every online marketplace, you’ll have to pay commission to the host on every sale.

By building your own in-house reCommerce solution — like Patagonia did with Worn Wear — you can get rid of used, out-of-season, or even damaged merchandise, without having to split the profits with a third party.

ReCommerce best practices for businesses

Like any eCommerce website or application, your business’ reCommerce solution will need an intelligent back-end system for managing inventory, product information, discounts, shipping, customer service, and other elements that are critical to the front-end user experience. Here are some more helpful tips for achieving reCommerce success in today’s ultra-competitive retail landscape.

  • Present highly transparent product descriptions and images, especially when it comes to the used item’s current condition, original price, age, history, defects, and so on.
  • Implement real-time inventory tracking so that customers receive accurate order updates and delivery times via email or SMS.
  • Run digital marketing campaigns to spread the word about your brand’s reCommerce opportunities.
  • Streamline the checkout process by providing flexible payment options, guest checkout, transparent pricing, and a progress bar.
  • Offer free shipping if possible, as well as the ability to ship multiple items to multiple locations under a single order.
  • Showcase positive customer reviews on the reCommerce site.

Getting started with reCommerce solutions

Implementing an in-house reCommerce system can improve sustainability, as well as increase customer engagement and sales for your online store. But how do you build, launch, and manage the necessary technological infrastructure to make it happen?

By partnering with a digital transformation agency like Codal, you can focus on running your business while a team of technical experts designs, develops, tests, deploys, and maintains a customized reCommerce solution. Our team has over thirteen years of experience optimizing eCommerce experiences for all kinds of online retailers, from clothing companies to food and beverage services. With cutting-edge digital technologies and technical expertise, we’ll plan and execute a data-driven reCommerce strategy that adds to the customer experience, and generates additional revenue for your brand.

Interested in learning more about how Codal can help enhance your business’ eCommerce experience? Get in touch with a member of our team today.

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Codal Inc.

Codal Inc.

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A digital solutions partner with a data-driven approach that empowers companies at the intersection of UX design, development, & business.