Recommerce for Brands Explained: Principles, Ideas, and Best Practices
Did you know that the most environmentally harmful period in the cycle of most products is the period of their production? For example, the life cycle of an iPhone 6 costs nature around 95 kg of CO2, and almost 85% of them are associated with its production. And if we take goods such as books or clothing, the contrast only intensifies.
In 2021, it goes without saying that brands that manufacture goods should be responsible for disposing of their products when people no longer need them. But they also have the option of repurposing or reusing items. Turns out that recycling campaigns is not the only sustainable form of marketing you can get on board with.
In this article, we look into recommerce, a trend of the last decades that you would definitely like since it can help you strengthen your market position, save nature, and generate profits.
What is recommerce?
Recommerce (shorthand for reverse commerce) as a phenomenon has been around for as long as classic commerce, but the term itself was coined by George F. Colony, the head of Forrester Research, in 2005.
The idea behind recommerce is that things can have more than one owner and used items can be resold. The argument is that repairing and selling old things are better for nature than the production of new ones and much better than discarding unwanted items straight away.
Recommerce subjects are resold and then repaired (if necessary) and reused, repurposed, recycled, or resold further.
Forms of reverse commerce include flea markets, consignment shops, garage sales, second-hand shops, as well as modern online platforms for selling new and used products (for example, eBay). According to recent research, the US recommerce market will be worth at least $51 billion by 2023.
Last century, recommerce was the relationship between a current item owner and a potential one. This model continues to exist today (you still can buy something on a flea market or from your neighbor) but you may also encounter ‘intermediaries’ that are trying to make such trade easier, faster, and safer. Thrift stores, individual antiques, or second-hand sellers are among them. Sometimes, brands also buy back their products to give them a second life or recycle them.
The most popular products that get a second life are electronic devices, books, jewelry, clothes, unwanted fashion items, consumer durables, and furniture. Certain products (such as household appliances and cars) may be purchased for being repurposed or used as the source of parts and metal.
Visual communication pro tip: If you want to sell a recommerce idea to an audience that hears about this phenomenon for the first time, refer to the official reports concerning consumer goods production footprint (for example, an Ellen MacArthur Foundation report or a report by Greer’s organization). Use numbers and icons to make information easy-to-digest and memorable.
Why is recycling important and how can brands benefit from recommerce?
We already know that the production of a new thing entails more CO2 emissions than the emissions from logistics, use, or recycling. In other words, by giving somebody’s unwanted things to another person who needs them, we significantly reduce air and water pollution and minimize the environmental footprint. For example, The RealReal platform that resells luxury items like Chanel jewelry, “softens luxury’s impact on the environment” and proves it using a sustainability calculator.
If your brand encourages people to reuse your (or any other) products, it becomes more eco-friendly and its value in the eyes of potential customers grows. Keep in mind that there is also ‘ecological recommerce’ which is about buying and then recycling or the process of the proper disposal of goods. Learn more about green marketing here (Green Marketing Tips for Brands Going Eco-Friendly in 2021).
Besides better ecology, the major benefit of recommerce for businesses is that if it’s applied to your business model as an integral part of the strategy, it can generate profits from literally nothing (avoiding the malicious production of new products).
For example, you can buy back your products at low prices, repair them and then sell at slightly higher prices. This model is widely used in such areas as the auto trading industry (see the case of Toyota that officially trades in its old vehicles in almost every country). And you don’t need to produce anything! But be careful: for most used products the profit margin is small as you have to spend money on logistics and repairment.
Great examples of businesses that integrated recommerce into their model: Toyota that officially supports trade-in, Bureo that purchases used fishing nets to produce products,
Your third advantage is that with the help of trade-in programs (you buy a used product and offer the customer a discount on a new product instead of money), you can increase the retention rate of your store.
Another advantage of recommerce programs is your chance to significantly save on raw materials or parts for future products as you can get them by recycling your old products.
And one more advantage you’ll get from going into recommerce is the following: by showing people your products can be resold and reused you prove to them that they are of the highest quality and worth their money. As a result, get more loyal customers.
Companies that can inspire you with their recommerce initiatives include Poshmark, Gazelle, RealReal, Rebag, ThredUp, and many others.
Buybacks and trade-in. How can you apply recommerce to marketing?
Like classic commerce, recommerce involves many aspects, including marketing efforts and promotion, logistics, repairing of broken items, and creating platforms for reselling them.
The good news is that you can start with a small test campaign (for example, trade-in weekends) and study the demand for this service, as well as the profitability of such a project for your company. If they perform well, you can plan large-scale projects.
Here are some basic ideas for brands that are about to start with a small recommerce project:
— Buyback and trade-in days
— Create a platform where sellers can meet buyers
— One-day garage sales
The most common forms of recommerce for international brands are trade-in and buyback (also: buybacks, buy back) programs. Trade-in is about buying a new item from a manufacturer with a partial payment made with an old product (usually, similar or of the previous generation).
And buyback programs are about the initial buying of used products from owners by their manufacturers. In this case, a person can receive a monetary reward or a certificate that allows them to purchase goods in the manufacturer’s store. The manufacturer rarely returns to the owner more than 40% of the original price.
Depending on the specifics of your product and business, you can choose one of these models. However, do not forget that they become effective only if you know
what you will do with the bought back products. You can:
— Disassemble them into parts
— Repair and sell them again
— Safely dispose of used products
Take into consideration that you would also need to store them and resolve logistic issues.
Sold something on eBay? That’s also recommerce
Another type of recommerce is the informal recommerce market, that is, the sale of used things from person to person. The internet and social media, as well as delivery services, simplified such trades significantly. Places where people can sell and buy used goods are flea markets, garage sales, or online global platforms like Amazon and eBay.
And yes, as a brand, you can also benefit from informal recommerce. For example, you can repost ads featuring your products on your platforms (Facebook, Instagram, and others), or even help people make reviews of their product, and then share stories of successful deals.
These days eBay encourages its users to use YouTube to promote goods they sell on eBay. So why not help people who are dealing with products made by your company? This is a good way to prove the durability of your product.
3 inspiring recommerce practices from sustainable marketing pioneers
Ikea buys back on Black Friday (2020)
In 2020, this Ikea project was simultaneously launched in 27 countries (excluding the USA) on Black Friday and its goal was to slow down climate change. The brand offered customers to sell their Ikea furniture back to Ikea instead of buying something on Black Friday.
If your furniture remains unused, the company buys it for 50% of the price in the store, and the price is reduced if the furniture is damaged. Once it has been bought back, the furniture will be sent for restoration and then found in the ‘As-Is’ section of the store.
The cornerstones of this visual communication: an expressive Ikea-style movie telling the story of an old cupboard that changed owners, with a solid eco-focused brand message at the end.
thredUP offers used fashion products at 90% off (since 2009)
Fashion is one of the leading industries with environmental footprint issues. Today, thredUP is the world’s premier platform for buying used branded items, featuring over 35,000 brands and offering them significant discounts compared to retail prices (up to 90%).
The company claims that buying each product helps reduce 82% of carbon, waste, and water footprints. thredUP is a company that was founded as a recommerce business and it is investing heavily in research concerning the harmful influence of fast fashion on our planet. You can find the facts about this on their website.
The cornerstones of their visual communication: thredUP raises the value of its services through publishing official reports regarding the harmful impact of fashion, they use infographics and illustrations that help them highlight the value of what they do and believe in as a brand.
Jonsered promoting trade-in days (2011)
We’ve already found that trade-in days is a format that allows you to quickly realize if recommerce can bring you business benefits and if its idea matches well with your products and audience. This limited-time campaign is a great example of such an experiment, it was launched in 2011 by the Swedish brand Jonsered, named after the town in which ‘the world’s first easy one-man chainsaw’ was invented.
Jonsered often uses engaging and emotional storytelling featuring lumberjacks to communicate with clients, but this time they have outdone themselves. The trade-in days ad contained the text: “Make sure your old workmate doesn’t end up in misery. We will buy your used machine regardless of manufacturer or condition. Visit your local dealer or www.jonsered.com”. The posters featured lonely used machines.
The cornerstones of the visual communication here: the visual focus is put on the Nordic nature and Jonsered chainsaw, which seem almost alive.
Source: Ads of the World
Wrapping up
No doubt recommerce initiatives can help transform your brand to an environmentally friendly one and give you a reputation boost as well. They also bring you revenue and can help you draw additional attention to your products or give you the tools to go viral.
And in 2021, by taking a recommerce route, you can make your brand and product more relevant to an environmentally-conscious audience, since caring for nature and health seems to be among their priorities this year (see Visual Trends 2021 by Depositphotos).
Unfortunately, there are also a number of issues related to recommerce. For example, for your trade-in initiatives to be justified, you need to think in advance about a strategy for sorting, storing, and selling collected secondhand goods. It is also important to explain to your audience what is recommerce, how exactly you’re applying it to your business, and why you’d like to invite them to join your initiative.
Explore the articles from the Depositphotos blog to learn more about sustainable marketing and design (Green Marketing Tips for Brands Going Eco-Friendly in 2021 and Here’s Why Sustainable Design is Important) and use our design templates and stock visuals to get an easy start and make your first recommerce messages expressive and noticeable.
