- October 2, 2024
- Posted by: admin
- Categories: Finance & accounting, Finance & accounting, Global Supply Chain, Innovation, Reverse Logistics
According to recent trends and market data, the rise of resale may be just what the industry needs. For consumers keen on sustainability, resale reduces consumption while giving brands multiple opportunities to resell their products.
But how have companies adapted to the post-pandemic shift, where seamless interfaces now integrate new, refurbished, remanufactured, and open-box items, and mixed shopping carts are becoming increasingly common? Despite appearances, resale is no overnight success story, especially on the logistical front.
Behind the scenes, a growing network of return service providers, sorters, resale facilitators, and recyclers is powering the shift to re-commerce. These third-party logistics providers (3PLs) are the backbone of the resale ecosystem.
Shipping a new product to a customer is straightforward, but re-commerce requires a more intricate approach. Every item in resale is unique, demanding processes such as quality checks, sorting, cleaning, and even repairs before it can be resold or recycled.
Some companies have taken the lead in simplifying this complex process. One such business has streamlined re-commerce by offering a full suite of services, from cleaning and repair to logistics, all under one roof. Please contact me when you have questions in this area, Reverse Logistics Solutions is a global expert in this space.
Growth in Reverse Logistics
The surge in e-commerce returns during the pandemic was a significant driver of this expansion. What was once a steady growth pattern became an explosion as return rates jumped from 12-22% pre-pandemic to 40% during the pandemic.
Another player in the reverse logistics space saw a similar growth trajectory, starting with handling assets for companies in the early 2000s. Despite initial hesitation to venture into textile logistics, the demand became undeniable, and they expanded their services. Today, the company manages reverse logistics across various sectors and opens new facilities to accommodate rising demand.
Meanwhile, a European company has followed a different path. Having built its reputation on rental and returns services over the last 25 years, it now operates the region’s most prominent fashion hub for circular logistics. The company’s expertise in handling high-end clothing led to its current dominance, processing a significant percentage of formalwear in its home country. Now, it’s expanding into resale by leveraging existing infrastructure and partnering with technology providers to enhance its services.
Building Partnerships
The growing role of 3PLs in resale logistics highlights the importance of partnerships. No company operates in isolation, and even those that offer end-to-end solutions are looking to collaborate with other marketplaces to boost resale visibility. A notable example is a logistics company that merged with a tech-enabled service provider to offer comprehensive solutions for brands looking to resell items seamlessly. By integrating logistics with resale, companies can offer a smoother customer experience while keeping everything within the same operational ecosystem.
Another key player in the sector is expanding its footprint by partnering with logistics companies that handle front-end re-commerce, ensuring a fully integrated brand resale experience. This integration allows brands to present both new and resold items side-by-side, enhancing the shopping experience for consumers and driving traffic to their main websites.
One company leading the charge in the home and textile industry is already seeing success with this integrated approach, as nearly 40% of its resale orders come from mixed shopping carts. This trend is helping to break down the traditional barriers between new and used product sales, with customers often converting to mainline products after trying resold items at lower price points.
The Future of Resale
For resale to remain profitable, brands must rethink how they design products, focusing on durability and desirability. One industry expert emphasized the need for better communication with brands about the benefits of creating long-lasting products that can generate additional revenue in the resale market.
Meanwhile, some companies are tackling the logistical challenges of resale by developing innovative solutions, such as localized re-commerce networks. By operating in regional hubs, they aim to reduce shipping costs and environmental impact while expanding their service offerings to include repairs and cleaning.
New cleaning technologies are also driving cost efficiencies. Some companies have pioneered energy-efficient cleaning processes, while others are experimenting with advanced robotics to further reduce time, enhance recovery, and reduce environmental impact. These innovations are helping to make garment repair and resale more sustainable and cost-effective.
As resale continues to grow in popularity, brands decide whether to continue investing in the logistics infrastructure that supported them during the pandemic or risk losing the momentum they’ve gained. The real challenge will be maintaining profitability while meeting the demands of a growing, younger customer base that now expects resale as part of their shopping experience.
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