A new study from Barclaycard Payments, a leading payments provider, reveals that retailers are capitalising on the growing ‘Recommerce Economy’– consisting of renting, reusing and reselling – as over three quarters (76%) of merchants now offer a more sustainable shopping format.
Barclaycard Payments has partnered with economic analysts, Development Economics, to combine thousands of consumer responses with demographic, retail and economic data from the Office of National Statistics, to calculate the true value of the Recommerce Economy.
The analysis found the growing trend of more conscious consumerism has contributed significantly to the UK’s economy, bringing in £6.99 billion in the last 12 months alone. Analysis of the Recommerce market found that this activity contributes 49,000 jobs across the UK retail sector and makes up 1.6 % of the UK’s total retail market.
The rise of the Recommerce market shows no sign of slowing down as four in 10 (40%) consumers shop second hand or rent items over buying brand new more often than they did a year ago. A further 57% say their Recommerce shopping activity has remained stable, suggesting the shift in the way consumers shop is here to stay.
The second annual Recommerce report from Barclaycard Payments found that eight in 10 retailers (82%) that offer rentals have noticed a boost in revenue since they started doing so; a further nine in 10 (89%) have seen their customer base grow and a similar proportion (87%) has seen profits increase. Those that offer such services report that, on average, a third (33%) of their revenue now comes from rental models.
Circular shopping methods prove a success for retailers
The Recommerce economy is expanding beyond traditional methods as businesses take resales in-house. Of those that offer a more sustainable service, three in 10 (29%) now provide a platform for customers to resell previously purchased goods which the business then sells on as a preloved product.
A similar number (31%) has added the option for customers to recycle products in-store, while three in 10 retailers (31%) offer a repair service so that customers can extend the life of their items.
Innovative retailers who offer a more sustainable service have also introduced ‘swapping events’ for customers to exchange items purchased through the business with others (18%), and reselling platforms for customers to re-sell goods even if they weren’t purchased at the company (22%).
The sectors at the forefront of the Recommerce market
Over two fifths (46%) of UK retailers have a resale option in place, and a further 27% are considering implementing one. Of those that offer resale, the most popular sectors are:
- Entertainment and electronics: such as laptops, headphones and musical instruments (47%)
- Clothing and accessories (43%)
- Home décor and houseware (41%)
- Baby care and children’s market (35%)
- Sports and fitness equipment (32%)
- Pet items (18%)
Online payments core to capitalising on the Recommerce revolution
In response to the growth of online shopping, over half (52%) of retailers have invested in new technology to ensure a seamless Recommerce shopping experience, with just under half of those (23% overall) having done so in the last three years. A further 23% are considering introducing this type of technology in the near future.
Of those that have invested in technology to aid reselling, popular developments include introducing a system that offers a quick, continuous check out process (46%), creating an online product resale page (39%) and contracting a third-party supplier to build a designated app enabling customers to resell their unwanted items (31%).
The key motivators for second hand sellers
The cost of living is one of the greatest motivators leading merchants to introduce second hand or rental options, as they seek to provide more affordable means of shopping (46%) for consumers looking to ease financial pressures elsewhere.
Sustainability is also front of mind: one in three who offer more sustainable ways to shop noticed a shift in consumer behaviour increasing the demand for more diverse options (33%), while almost half (46%) want to minimise the impact of their business on the environment.
Linda Weston, managing director at Barclaycard Payments, said: “Sustainability and the rising cost of living continue to impact merchant decision-making when it comes to the Recommerce Economy.
“Activity within this sector contributes significantly to the UK Economy and our research highlights that merchants are increasingly taking interest in facilitating more sustainable and cost-effective shopping methods for consumers, actively investing in new technology as well as offering recycling or reselling platforms and services. Our data demonstrates just how beneficial this can prove to revenue and income streams amidst a challenging economic climate.
“We work closely with retailers to provide tailored payment capabilities, to ensure their customers have access to a variety of ways to shop. As we continue through the golden quarter and retailers start looking to the year ahead, there is a clear opportunity to capture the demand for sustainable and affordable products and in turn drive loyalty and sales.”
Steve Lucas, economic development manager at Development Economics, said: “Recommerce is already creating important economic influences across the UK, currently supporting 49,000 jobs directly. Retailers are also reporting an increase in revenue since introducing product rental options, and these benefits will only continue to grow as consumers increase their purchasing of second hand items.”
Harry Wallop, retail expert and commentator, said: “I think it is amazing that the Recommerce Economy is increasingly valuable to the wider retail industry; a contribution of £7 billion proves that retailers and business owners can no longer ignore the trend. And it is only likely to get bigger as more high street names embrace the idea that they can rent out items or sell second hand goods alongside new product lines as a way of retaining and attracting consumers.”
Retailers looking to improve their payments offering can do so by partnering with a provider like Barclaycard Payments. The payments provider, which processed over 8.7 billion card payments in 2022, offers access to a wide range of digital services from in-store mobile payment solutions to secure payment experiences for customers.
