Why the future is second-hand, not e-commerce

E-commerce, a negative trend

Many retail chains believe online is the way to grow. It is not. For the first time in 17 years (since 2006), PostNord’s E-barometer has measured negative results for e-commerce. The Swedish online trend appears broken: bankruptcies in the sector rose 59% in 2022 compared with 2021. E-retailers do not know how to act – a downturn is a new situation for the industry, and the phasing out of third-party cookies makes it harder to collect data on online purchases. The E-barometer shows that recent years have not been stable, and 2022 figures confirm that e-commerce is pulling back. That is likely directly related to the downturn and the end of pandemic restrictions.

Hybrid is better than e-commerce – do not fall behind

Customer interest in the circular economy cannot be denied. Stores that are not ready to make the changes the market expects will have a hard time. Forward-looking stores see the second-hand market as a way to reach more people, and have already started the changes required. Companies willing to try new paths – such as hybrid solutions between digital commerce and physical stores – are believed to have the best chance of staying competitive, as the trend shows that people prefer to buy clothes in person.

Flexibility and new thinking are the winning combination if you do not want to fall behind.

Second-hand successes, retail’s fastest-growing segment

The second-hand trend is not new, but combined with a downturn and higher sustainability demands the market is expected to explode. Vinted, for example, is simplifying C2C buying, while Arkivet STHLM, one of the Nordics’ leading sustainable fashion chains, creates a more glamorous experience for its customers.

Other circular successes include Cervera Vintage, the second-hand store Erikshjälpen which keeps breaking sales records, and Tradera, which increased Christmas sales by 24% between 2021 and 2022 – and among the items that sold the most were clothes and shoes.

In an interview with Ehandel, the Nordics’ largest e-commerce meeting place, Vinted CEO Adam Jay said the second-hand market in Sweden was expected to reach SEK 1.5 billion. Their research also showed that 46% of Swedes choose second-hand because they want to shop sustainably.

Why should chains invest in resale?

The mistake chains often make is that they do not identify with second-hand and are afraid of losing customers in their primary target group. That means they miss enormous potential in both their own inventory and market share. Larger players already have stores, visitors and staff. Adding second-hand as a concept is then simple. It creates new traffic to the store, and drop-off occasions turn into selling occasions.

The world is changing, and the second-hand market is the fastest-growing, with fashion as the leading category. Second-hand means more customers for stores, not fewer.

Social commerce – Sweden following the US

To better understand the potential of social commerce happening online in Sweden, look at the US. Unlike pure e-retailers, social commerce platforms reach consumers where they already are and feel community. In the US, social commerce is expected to make up five percent of total e-commerce by 2025, equivalent to USD 80 billion. Products recommended in a familiar environment create safety and trust, and the path to purchase becomes more natural.

Sustainable commerce means sustainable customer relationships

Just as social commerce platforms reach consumers where they are, your store can do the same. When customers can buy and drop off their clothes in the same store, the relationship is extended – and strengthened. Stores that offer sustainable choices have a better chance of surviving. Strong customer relationships are decisive for a brand’s success, and stores that share their customers’ circular values are better placed to secure their future.

Want to know more about how your store can take part in the circular economy and become part of the solution to fast fashion? Get in touch.

Sources: E-barometern, thredUP, Lund University, ehandel.se