While online product sales decline, second-hand goods continue to grow and attract more and more distributors looking for profitability, but also in-store traffic.
Can the second hand bring customers back to the store? While online product sales fell 12% in the first quarter of 2022, according to Fevad, a second hand, they continue to grow. Foxintelligence estimates that online used fashion grew +31% in 2021 versus +16% new fashion, impacting the period for 19% of the value of online purchases in the fashion category. To increase this phenomenon, the destruction of unsold non-food items has been prohibited since 1Verse January 2022. These unsold items represent 3% of the company’s turnover, 4 billion euros of merchandise each year, including just 1.6 billion euros for the apparel and footwear segment, according to a November 2021 study by Ademe Comerso.
As a result, retailers are changing their offerings to offer more and more opportunities on their platforms and in their stores. It’s also a way to offer some customers the brand at reasonable prices before pushing them to buy new later. This is the case at Sézane according to figures compiled by Foxintelligence. In 2021, 75% of used and second-hand brand buyers purchase second-hand goods first before purchasing a new item. Previously worn items significantly affect Sézane sales: second-hand products represented 1% of the brand’s sales value in 2017 and about 10% in 2021.
Kiabi is one such clothing brand that is opening its doors to already worn clothes. The distributor wants to equip 100% of its French stores with space for these parts by the end of 2023. After testing a first used corner near Maubeuge (59) in August 2020, Kiabi has opened 55 stores and aims to have 129 by the end of the year. In these areas, from 35 square meters for the smallest to 65 square meters for the largest, there are between 2000 and 5000 references for all brands that were sold 40-80% less than the new product. In 2022, the brand plans to generate 3 million euros in sales from these corners. Besides second-hand physical spaces, the clothing brand, in the style of Vinted, has opened up a buying and reselling platform for its customers as it registered at least 1.5 million ads in 2021.
Also at Decathlon, refurbished products are available both online and in stores. With its rental and Trocathlon offerings, Decathlon has already been a second hand leader. The brand has advanced its offering with a dedicated Second Life space in the store and offers refurbished products both in a dedicated location and directly in its market. It fuels this service thanks to products retrieved from rental services, but also through products returned by its customers. Decathlon takes back the products of all brands for an amount of at least 30-40 euros.
Traffic crane inside the store
The second hand is also a way to get customers back into the store. Ikea has changed its Good Find Corner, where the brand has been offering series end and display furniture for 40 years, to the Circular Hub. On its platform, customers can take a look at the used furniture available in the store nearest to them and reserve it before receiving it. IKEA France assured us of our interest in this approach: during a process carried out in November 2021 for each piece of furniture returned, customers received a voucher equal to one and a half times the redemption price. In fifteen days, Ikea collected about 17,000 pieces of furniture.
Also in Kiabi, the second hand is the traffic driver inside the store. Its customers can deliver bags of already worn clothes of at least 12 items, all they have to do is collect the shipping labels either via its dedicated platform or in-store. In return, the customer receives a €5 voucher worth €25 for purchase in the store. While selling on the used buy and resale platform, the customer can choose a cashback or voucher that Kiabi will match for up to 20%. “More than half of our customers opt for the coupon with a top-up, notes Jeremy Haley, Co-President of Pre-Owned Kiabi. Our approach is omnichannel and our goal is to enhance product circularity, by creating buying power for our customers and in-store traffic.”