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How recommerce is taking shape with big name retailers and changing the industry

recommerce industry growing
Posted at 3:58 PM, Nov 03, 2022

DENVER, Colo. — Shopping for adults is like a kid in a candy store. Every corner you turn, there is something that catches your eye. However, those wants and needs in many cases are a big commitment on your wallet, because let's face it: new retail is expensive.

Jimmy Funkhouser is the owner and founder of Feral. They are a locally-owned indie outdoor shop in Denver known for having a large selection of used gear and clothing.

"The outdoors is a place that fundamentally should have no gatekeeping," Funkhouser said. "And price remains the biggest barrier for people accessing the outdoors. I come from a retail background. I worked at a corporate retailer for about 10 years."

Those years of experience helped influence the concept of his business with the goal of creating affordable opportunities.

"If you woke up this morning and decided, 'Shucks, I want to try backpacking,' it would cost you what it would cost a trip to Disney World this weekend with your family to get all of our gear if you were to go to a major retailer and buy everything new," Funkhouser said.

However, we are starting to see that change as big boutique-type brands are incorporating the recommerce model into their businesses. Some examples are Lululemon, Patagonia, Madewell, and Levi's. Whether it's in-store or online, customers can trade in their used items from that company for a gift card to the store. Shoppers can then purchase these second-hand items at a much lower cost than new retail.

Newer companies like Threadup have been built on the concept of high-quality secondhand items. They are an online consignment and thrift store where customers can both sell and purchase items.

"The recommerce and the used part of the retail industry needs to look and feel like what the retail shops have looked like historically. You're seeing a lot more boutiques. You're seeing a lot more fun vintage resale stores," Funkhouser said.

The recommerce industry grew nearly 15% in 2021, which was twice as fast as the broader retail market. By purchasing secondhand, shoppers save nearly $150 a month or close to $2,000 a year. Chewie Pasque is a retail sales manager for REI. He points out that while REI has been in the recommerce space for quite some time, it wasn't until recently that it became readily available in person and online. In the past, it only happened once every six weeks.

"We have a larger market share and a larger customer base, so by doing this we are able to launch something at a national level that's going to have a bigger global impact," Pasque said. "We've been in the business of selling used gear for the last 60 years, but really back in 2018 is when we made that push to online as well and really helped opened that door for more folks to have access to that gear."

Right now, at REI online, a women's jacket that was sold for $179 new is being sold for $64.44 secondhand. Many of their items posted online are more than 50% cheaper.

"We have a goal by 2030 to cut our carbon footprint by at least 50% and the only way we can do that is going to be by expanding that resupply area. We also have a goal to expand our resupply sales to over $1 billion, and we know we need to continue to push on that," Pasque said.

Whether it's to broaden access to people of different socioeconomic backgrounds or to help the environment and cut waste, these experts say the recommerce revolution has a lot of stake in the future of retail.

"And I think brands are finally realizing buying and selling used items is not a threat, it's an opportunity, and I think as more brands see it as an opportunity the industry will keep coming on board," Funkhouser said.