Why Resale is the New Must-Have for the D2C Business Model | Direct 60 Insights | Post III

In the last few years, brand after brand has launched a resale offering. In our research for The Direct 60, we found many of the D2C executives on our list were primary drivers of the resale business strategy for their brands. Growing 16X faster than the broader apparel market, the resale market is expected to reach $218 billion globally by 2026. So no wonder brands want a piece of that pie. However, there is more to the story. One of the reasons brands are creating resale channels within their own direct businesses is the availability of resale-as-a-service providers like Archive, which make it really easy for brands to adopt resale quickly and get the most out of the opportunity.

Here are some ways resale is helping brands grow —

Customer Acquisition

Resale allows brands to acquire customers who may be more price sensitive or who are driven to shop more sustainably. According to Emily Gittins, Co-Founder and CEO at Archive, “What we have seen is that a majority of customers buying second hand on brand’s own site are new to the brand. Resale has helped brands expand access to new customers, notably younger Gen Z or more price-sensitive customers.”

Customer Data & Retention

With resale, brands can get any customer who owns their product, regardless of which channel it was bought through, to come to their website or store and resell those items. The brand then has the data about those customers as well as the opportunity to keep these customers in their ecosystem.

Loyalty

Resale not only shows a brand’s commitment to sustainability but also gives brands an opportunity to highlight their heritage and history through storytelling. In addition, resale builds loyalty by providing customers with an easy way to sell items from past purchases and get store credit for future purchases.

If you are still on the fence or just starting your resale program, there are things you can learn from brands that had a bit of a head start.

1) Offer Options: While some customers may be comfortable selling their items via an online resale platform, others may prefer to drop theirs at a store. Brands should explore various resale models that give customers options for how to engage with resale. Offering sellers a choice for redeeming their earnings can also incentivize engagement. According to Archive, when brands offer both store credit and cash options, 75% of sellers chose store credit.

2) Prioritize Customer Experience: Make it as easy as possible for customers to both list and buy items via your resale experience. One way to accomplish this is to work with an experienced technology partner to launch a seamless omnichannel experience

3) Focus on Profitability: Depending on the type of items being sold and the average price points, it’s essential to understand the unit economics for various resale models to ensure profitability. Some take-back models may not make financial sense for lower-priced goods. Leverage your resale partner to determine which resale model will work best for your brand.

4) Leverage Data: Resale has the ability to change how brands manufacture products over time. After a brand has been in the resale market for some time, it can start to understand what products continue to sell, what styles are coming back (or remaining in style), and even which materials are holding up over time. Brands can use these insights to create products that are better for the business — and the planet — over the long term.