Consumer spending is more polarized than ever.
On the one hand, shoppers are incredibly price sensitive, cutting back on unnecessary expenditures and searching for bargains. On the other, the demand for ethical, sustainable, and luxury goods - which come at a higher price - is also high.
Balancing these behaviors seems to be an impossible task.
In a report by Nosto Solutions, 57% of customers want retailers to become more sustainable.
But here's the thing: in the same survey, 61% of customers said they were more concerned about cost than sustainability.
In fact, only 39% said they'd pay more for sustainably made versions of the same fashion item. At the same time, Research and Markets predict that the fast fashion sector will surpass $200 billion by 2023.
This points to a significant gap between what consumers say they want and the 'inconvenience' that they are willing to put up with to achieve those wants.
In the case of sustainable e-commerce, this inconvenience may be higher prices, reduced product choice, longer production times, slower delivery, delivery fees, and more.
And while consumers may feel that sustainability is important, things like convenience and cost are also important to them. This makes the 'inconveniences' of buying sustainably harder to just accept.
But it's not only consumer behavior that e-tailers must worry about.
At an operational level, e-commerce is grappling with the same seemingly mismatched concerns.
Second-hand shopping has accelerated in every sector from fashion to luxury to homewares.
According to Coresight Research, the US resale market for fashion was worth $28.1bn in 2022. In Europe, Research and Markets reported that the second-hand luxury goods market was worth $16.6bn in 2022. And resale is still growing.
While some of this is undoubtedly driven by consumers looking to reduce their spending, sustainability is another key motivator.
Embracing a circular model can save e-tailers money by enabling them to sell the same product multiple times rather than producing more. It's also far more sustainable to resell goods than to have them go into waste streams.
To make online re-commerce work, retailers need to embed it within their existing e-commerce operations.
Outdoor clothing company Patagonia is undeniably a leader in sustainable retail practices. Its Worn Wear program sees the company buy back used Patagonia products which are refreshed and sold online.
What's powerful about the Worn Wear initiative is that Patagonia doesn't hide it away. There is a button to look at used options right on the product page of the brand's e-commerce site, making it a clear alternative to buying new.
By comparison, fellow outdoor clothing business REI lists its used products on a separate page of its website which is not as visible and could easily be missed by shoppers.
Notably, in 2022 Patagonia reported that 70% of Worn Wear purchases on Cyber Monday were to new second-hand customers. This demonstrates not only the demand among consumers but that second-hand can be a driver of new business.
If e-tailers don't make re-commerce part of their business directly, other companies will do it for them.
Beni is a free browser extension that scours the internet to find resale versions of products that consumers are looking at and displays them right on the page. The shopper can then click on the results to be taken to the second-hand alternative on one of Beni's partner marketplaces.
By doing the hard work for the consumer and showing them used alternatives to what they're browsing for, Beni simplifies the second-hand buying process.
Rather than losing out on sales through initiatives like Beni, embracing re-commerce can provide e-tailers with another revenue stream, as well as increase their customer base, strengthen consumer relationships, and make their business more sustainable.