Is it Marketing or Business Model Innovation?
The best piece of the week was Joel Makower ’s, “How to Greenwash Like a Pro .”? It’s worth a read.? While it is satire, Joel’s larger points play out across the resale news this week.? We are witnessing an industry that continues to accelerate around a customer shift to buying used, look no further than the Poshmark deal. This in turn creates a competitive environment with independent marketplaces, as seen in Forbes “Battle Of Luxury Resale Business Models .” All of this places more pressure on brands to protect their brand equity and own their customers' experience. It's also a good reminder that jumping on the circular bandwagon with marketing isn’t a substitution for required innovation.?
?Let’s start with the Poshmark deal.? Bloomberg News covered the Poshmark acquisition by Naver, a leading South Korean e-comm platform.? I see this as a win for Manish Chandra , a pioneer in the resale space, and Poshmark’s investors and the industry.? The deal priced POSH at 3.4X their 2022 revenue, a 34% premium to the past 30-day volume-weighted trading average and ahead of more asset-heavy competitors.
?Other public resale companies such as The Real Real (TRR) and Thredup stock prices were up following the announcement as Olivia Rockeman points out in her Bloomberg article as an indication of additional M&A activity.? While that would surprise me, I view this as opportunistic rather than industry maturity and consolidation.?
?The competition will continue to heat up as more independent retailers such as Vestaire, StockX, and even Goodwill were in the news.? As the Sourcing Journal covered, StockX expansion into additional luxury categories will set up more direct competition with The RealReal and Vestaire.
?Forbes published a piece on Reflant vs The RealReal.? The column rightly pointed out that brands supported by B2B players such as Reflaunt will add pressure to Independent marketplaces such as The RealReal.? These marketplaces trade on premium brands with little to no value back to the brand.? Where I found the article a bit off, was in the competitive match-up as players such as StockX and Vestiaire are far more competitive for The RealReal than Reflant, at least today.
?Goodwill joins the premium resale market along with brands such as Gucci, Hermes, and Louis Vuitton.? I don’t view this as true competition for these competitive independent marketplaces such as StockX as Goodwill lacks the investment in areas such as SEO and dynamic pricing necessary to truly compete here.? Goodwill’s announcement of the program targets its aim, “to provide professional training, job placement, youth mentorship, and more to local communities.”? This is what Goodwill does best and I believe this move will create more opportunities for them here.? It will also create additional places for branded products to show up, making resale innovation and strategy more important for brands.
?Jimmy Choo, Sando, and D?EN all launched resale programs.? Jimmy Choo launched as a ‘partnership’ with The RealReal which similar to other deals with independent marketplaces is more of a marketing partnership.? Brands may gain traffic and earned media but in the end, they are not building a more circular model to stay in touch and own their customer experience.
?French brands, Sando and D?EN launched as branded experiences with B2B providers, Archive and Treet respectively.? Sando ’s storefront experience is appealing, although as with other recent launches the inventory is a bit sparse (about 75 items listed).? The challenge with low inventory is first-time customers won’t likely find relevant items and may not quickly return.? Ideally, inventory for resale will continue to come from customers via accessible programs such as mail-in and trade-in programs.? The D?EN experience was high-end and as WWD pointed out , certainly wins the ‘best pun award’ titled, ‘Hand Me D?en.’? The D?EN experience was not as clear in terms of how the program works but it appears the program is starting with always on trade-in and pop-up flash sales.
?Resale activity continues to intensify, as there will only be room for a few independent marketplace winners.? This makes it more important for brands to have a resale strategy and plan that protects their brand equity and allows them to monetize the full value of the items they design and produce.? Some of the programs we saw this week are intermediate steps but fall short of the innovation we need to shift the model–maybe they had an early draft of Joel’s article.
?The So What
?Until Next Week,
Andy Ruben, Founder and Exec Chair
Resources:
How to greenwash like a pro
As sustainability has been a growing movement for retailers, "greenwashers” have become increasingly popular as well. Making bold commitments, telling an unmatched story, and planting trees are just three of the twelve-step process to join the greenwashing movement (satire).?
Forbes Battle Of Luxury Resale Business Models: The RealReal Vs. Reflaunt
The luxury resale industry is still an infant to retail and a company’s business model can make a difference when it comes to profit and success. The RealReal follows a less traditional consignment business model by empowering individual consigners to send items directly to the company, where they can then be sold or bought directly off the site. Reflaunt operates as a resale-as-a-service model (RaaS.) Ultimately, proving to be more successful, as it acts as a facilitator for brands and retailers to welcome resale directly into their own business models.?
WWD For Resale’s Love of Puns, D?en’s ‘Hand Me D?en’ Is a New Contender?
D?en, the earthy label, is entering resale with the launch of its new “Hand Me D?en” program. The solution simplifies resale through an online portal targeted towards customers who value the brand's efforts in efficiency and transparency.??
GoodwillFinds Reimagines Purpose-Driven Resale Shopping
To further Goodwill's mission to provide more professional assistance to local communities, GoodwillFinds launched its secondhand marketplace to fund community-fueled programs across the U.S. GoodwillFinds.com is a curated marketplace for shoppers to find hundreds of thousands of unique items. The money spent on a GoodwillFinds product, will go back to the region the item was sourced from.?
Poshmark Deal Points to More Acquisitions in Resale Market
领英推荐
As the resale market explodes in popularity, brands and secondhand marketplaces compete to own the industry. Brands like OnRunning, Jimmy Choo, and Balenciaga are partnering with companies like Trove and The RealReal to run their resale units. That's bad news for peer-to-peer marketplaces that take a cut of any of its transactions.?
FashionUnited Jimmy Choo to offer resale via The RealReal partnership
Jimmy Choo launches a partnership with The RealReal that will enable its customers to give their luxury items a second life. Launched on October 6, Jimmy Choo shoppers can consign their pre-loved pieces on The RealReal.?
Introducing Secondhand Sunday: Encouraging Everyone to Shop Secondhand this Holiday Season
The Sunday after Thanksgiving weekend is no longer just for leftovers, as Poshmark and The Registrar at National Day Calendar just announced November 27th as National Secondhand Sunday. This is the first holiday that is fully dedicated to supporting secondhand and circular sellers during the peak holiday shopping season. The creation of this day is more than just a holiday, it’s a movement encouraging everyone to shop secondhand.?
The Washington Post As counterfeits rise, sneaker authenticators sniff out real from fake
The legitimate sneaker industry represents $72 billion of the global market and is projected to grow nearly 8 percent per year through 2027. Just last year, the counterfeit market was estimated to be worth $450 billion. With that being said, counterfeit products are keeping pace, threatening the future of legitimate footwear. Secondhand retailers have had to invest in sneaker authenticators to protect and ensure customer purchases.?
FASHIONPHILE 2022 Ultra-Luxury Resale Report
Although 2022 has been defined by creative investments, both digitally and physically, the real world still faces the effects of the global pandemic, specifically relating to ultra-luxury items. This has driven a high demand in the secondary market. Fashionphile’s Ultra-Luxury Resale report deep dives into popular trends within the luxury resale section by exploring collaborations, growing demands, and trend forecasting.?
Retail Dive Another Goodwill resale site launches as the market takes off
Goodwill introduces GoodwillFinds, a group of Goodwills in the Midwest and West launched an online marketplace and the net proceeds from purchases will go to the region it was sourced. Recommerce is expected to hit $80 billion by 2026 and GoodwillFinds will be a great addition as it is good for the people and even better for the planet.
Glossy Inside D?en’s flash sale approach resale?
The Resale renaissance continues but the D?en fashion resale program, Hand Me D?en is doing things a bit differently. D?en will have the traditional buyback exchange for store credit but instead of making approved products available ASAP, D?en has decided to host flash sales throughout the year.
Sandro, Madewell Expand Resale Plus New Eco-Collabs: Short Takes
New Eco-Collabs: Sandro introduces re-commerce website Sandro Secondhand, Michigan-based outdoor brand, Merrell expands the ReTread program outside the U.S., Goodwill continues with the designer re-commerce website “GoodwillFinds” and so much more news.
Sourcing Journal Resale Giant's New Launch Steps on The RealReal’s Toes
StockX upgrades from just sneakerheads to include luxury footwear and accessories. With one-third of StockX shoppers being women interested in scoring luxury pieces and with StockX’s enhanced authentication process, this is a natural step for the platform.
The Business of Fashion Luxury’s Big Resale Experiment is Just Getting Started
A shift in luxury brands’ attitudes toward the secondhand market is just the beginning of designer houses capturing more of the market share. Many high-end brands are investing and collaborating with authentication technologies and resale platforms. Recommerce was once seen as a threat but now it’s viewed as a sustainable business model that helps build customer loyalty and engagement.
Visionary Brand Director growing global businesses where the outdoors, fashion, tech and sustainability meet. Serial Founder, Board Member, GM, Investor.
2 年It's bizarre that businesses think resale closes the loop. It's one stage, and it's better than nothing... but it doesn't complete a product's end-of-life, it just shifts it downstream.