Is Brand Resale at Gartner's “Peak of Inflated Expectations”?

Learn more about the Index in this week's podcast episode

This week’s Resale Edit is dedicated to the publication of the Inaugural 2023 Brand Resale Index. The index is the culmination of more than 6 months of data collection and analysis and the first benchmark for brands to measure the industry’s progress in the $100B global resale market.?

The Index is platform agnostic and evaluates leading practice adoption across 40 brands in four industry verticals: Fashion/Apparel, Outdoor, Footwear, and Luxury. Conducted in partnership between Trove and OSF Digital , brands were assessed on 147 criteria across brand positioning, commerce, and trade-in experiences, with a general consideration of how the resale business model potentially contributes to environmental sustainability benefits.

There were several takeaways from the work such as the tremendous opportunity for luxury brands to tell their story, the progress in better integrating commerce and trade-in/selling experiences, and that not all resale programs are sustainability programs.

Download the Brand Resale Index and full findings here.

However, the most significant takeaway for me is the precarious position of the industry. It’s clear that brand resale will represent a significant shift in commerce now than at any point over the past 12 years since founding Trove. We’ve seen more than 100 brands launch branded resale programs in the past 12 months. But we also see that many of these programs are more set up for PR than business model innovation.

Gartner has a framework for emerging technology known as the Gartner Hype Cycle. It’s a model used to represent the maturity, adoption, and social application of new technologies or innovations. The first stage of this cycle is known as the ‘Peak of Inflated Expectations.’ It’s in this early stage that innovation is over-hyped, and unrealistic expectations are set, which often leads to a "bubble" of excitement. However, when the innovation fails to live up to these expectations, interest decreases rapidly, leading to a "crash" in the hype cycle, which is known as the ‘Trough of Disillusionment.’ Beyond these early stages, technology matures and reaches mainstream adoption where its benefits are widely recognized.

I expect brand resale is currently at the end of the ‘Peak of Inflated Expectations’ stage. I expect there will be more skepticism where the reality of non-scalable, non-profitable brand resale models that don’t achieve over-hyped sustainability benefits tarnishes the potential benefits. The Gartner Hype Cycle acknowledges this phase is a necessary part of the technology adoption process and it often precedes a period of more sustained and meaningful transformation.

Learn more about the Index in this week's podcast episode

There is no single playbook for brand resale, but over the longer term brand resale programs that aren’t intentionally integrated into the business will never achieve the promised circular benefits of resale. The Index in 2023 made abundantly clear this wide range of programs, some of which are early starts and less set up for success than others. This is not a failure of brand resale as a powerful and necessary change in retail, it's a necessary stage of innovation.

Over the past few days in discussing the Brand Resale Index findings, many reporters have pushed for information on the ‘laggards.’ That is not the point of the Index. Early on we decided that focusing on the leaders was the best way to provide a map for all brands. Any brand, not a leader today could be a leader a year from now. We expect the Index to help show a path. Successful brand resale programs, like any other business strategy, are consistent with and elevate the brand, they add more value to customers and they are set up to scale and make money for investors.

Download the Brand Resale Index and full findings here.

I’m excited to have this work published so we can collectively make it better. As always please send questions, comments, etc. The opportunity for brands has never been greater, it’s simply a matter of how we all take advantage of it.

The So What

#1 Skepticism over the reality of non-scalable, non-profitable brand resale models represents the manner in which brands are approaching resale rather than the potential of the innovation

#2 The 2023 Brand Resale Index provides a map, of where any brand not leading today could be leading a year and thereby better positioned to take advantage of the customer and business opportunities in resale

Until Next Week,

Andy Ruben | Founder & Exec Chair, Trove

Resources:

The 2023 Inaugural Brand Resale Index: Defining the Resale Experience

The Business of Fashion : How Brands and Retailers Are Shaping the Resale Experience