The Resale Revolution

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Week 322 | Strategy & Business Model Section | 1

Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Since September 2017 | Week 322 | November 10-16, 2023

The Resale Revolution

By Thomas S. Robertson | Harvard Business Review Magazine | November–December 2023

Extractive Summary of the Article | Listen

In 2021 the research and consulting firm GlobalData estimated that each U.S. household holds on to a trove of potentially reusable goods worth $4,517, on average—and a similar pattern holds internationally. That’s a lot of trapped value, and companies are at last getting serious about accessing it.  How? By developing their resale capabilities.

Resale has been with us a very long time—at yard sales, on used car lots, in classified ads. What’s changing is the magnitude of the market, boosted to a significant degree by Gen Z consumers and a growing demand for sustainability. The dominant categories are apparel, electronics, and home goods. All sorts of major brands, from Apple and Nike and Rolex to Walmart and Lululemon, are moving into the market. The resale market for sneakers alone today is estimated to be more than $5 billion, with international markets outselling the U.S. market.  What should really worry companies is this: If they don’t sell their own used products, someone else will. 

If your brand appeals to younger consumers, and especially members of Gen Z (born between 1997 and 2012), a resale program might be for you.  In many respects they are the ones who have fueled the explosive growth of the resale market, in part by rejecting the long-standing stigma associated with buying secondhand items. Clothing is a powerful and visible means of displaying status, and what we’re now seeing among Gen Zs is a kind of reverse conspicuous consumption, in which they convey status by showing themselves to be “good thrifters.” The guiding principle seems to be “admire me not for how much I spend but how much I save.”

If you’re wondering how to participate in the resale space, you can learn a lot from the experiences of major brands that have entered it. During recent conversations the author have had with a number of their executives, several principles for action became clear: design friction-free processes, work with a third-party platform, transition to the Gen Z consumer, integrate brand-loyalty initiatives, and build an integrated portfolio.

3 key takeaways from the article

1. In 2021 each U.S. household holds on to a trove of potentially reusable goods worth $4,517, on average—and a similar pattern holds internationally. That’s a lot of trapped value, and companies are at last getting serious about accessing it.  How? By developing their resale capabilities.
2. Resale has been with us a very long time—at yard sales, on used car lots, in classified ads. What’s changing is the magnitude of the market, boosted to a significant degree by Gen Z consumers and a growing demand for sustainability. The dominant categories are apparel, electronics, and home goods. All sorts of major brands, from Apple and Nike and Rolex to Walmart and Lululemon, are moving into the market.
3. Several principles for action on how to participate in the resale space are: design friction-free processes, work with a third-party platform, transition to the Gen Z consumer, integrate brand-loyalty initiatives, and build an integrated portfolio.

Full Article

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Topics:  Sustainability, Marketing, Resale