- Seven in 10 businesses now offer more sustainable shopping options, giving rise to the ‘Recommerce Economy’ of recycling, renting, reusing and reselling
- A third of retailers agree that increasing environmental awareness and rising cost-of-living are driving Recommerce growth
- Two in five retailers have created a product rental model and a quarter are looking to set one up as popularity grows
- Consumers are also shopping more mindfully as more than half of retailers report a fall in returns, reversing the ‘serial returner’ trend that gathered pace during lockdown
New research* from Barclaycard Payments reveals retailers are introducing more sustainable ways to buy and sell products and services, amidst pressure from consumers to shop more consciously and reduce their discretionary spending as living costs increase.
Barclaycard Payments, which processes £1 in every £3 spent on credit and debit cards in the UK, found seven in 10 (71 per cent) of the businesses surveyed now offer recycling, renting, reusing or reselling shopping options. Over a third (36 per cent) have introduced more sustainable ways to shop in the last 12 months, and 89 per cent plan to expand their options in response to growing demand for more affordable and environmentally friendly shopping alternatives.
A third of retailers (32 per cent) agree that the rapid expansion of Recommerce has been driven by the growth in environmental awareness and the impact of the rising cost of living on consumer spending behaviour. Close to four in 10 (37 per cent) say they have introduced more sustainable ways to shop to provide customers with more affordable options, with 44 per cent doing so to reduce their own impact on the environment.
The rise of rent and resell
As shoppers look to rent items that they would have in the past purchased new, retailers are responding at pace. Two in five (40 per cent) UK retailers now have a rental model in place, of which 61 per cent launched in the last year alone, while a further 23 per cent are considering setting one up. Encouragingly, of those that have introduced a rental model in the last year, nine in 10 (90 per cent) have benefited from an increase in revenue. The majority (89 per cent) have also seen their rental customer base grow, at an average increase of 31 per cent.
In an effort to provide an alternative to traditional online reselling platforms, 39 per cent of retailers now have their own reselling option in place, enabling customers to buy and sell second-hand items. Responding to the increasing demand from shoppers, almost a quarter (23 per cent) of retailers offering reselling options have introduced them in the past year, while a further 26 per cent are considering setting one up in the coming months.
When asking retailers what products they are currently renting and reselling, a combination of jewellery, clothing and handbags are the items most readily available to customers:
|Most common products available to rent from retailers:||Most common products available to buy pre-loved from retailers:|
|2.Designer clothes (24 per cent)||2.Designer handbags (28 per cent)|
|3.Suits (24 per cent)||3.Jewellery (27 per cent)|
|4.Designer handbags (21 per cent)||4.Designer clothing (25 per cent)|
|5.Wedding dresses (18 per cent)||5.Electrical goods (20 per cent)|
|6 .Furniture (18 per cent)||6.Suits (18 per cent)|
|7.Electrical goods (17 per cent)||7.Furniture (17 per cent)|
|8.Party supplies (15 per cent)||8.Wedding dresses (16 per cent)|
|9.Tools (14 per cent)||9.Tools (12 per cent)|
|10.Sports and Fitness equipment (13 per cent)||10.Party supplies (10 per cent)|
Serial returners trend begins to retreat
In a move away from the ‘serial returner’ trend that boomed during lockdown – where shoppers sent back large proportions of their purchases – 56 per cent of retailers have reported a drop in return rates in the past year, with the number of items returned down 14 per cent compared to 12 months ago.
Over a third of retailers (34 per cent) attribute this shift to consumers making more mindful purchasing decisions. Other reasons cited include buying less overall owing to the rising cost of living (26 per cent), making more environmentally friendly choices (23 per cent), and the increasing use of reselling platforms for unwanted products that are not returned to store (23 per cent).
Counting down to a conscious Christmas
Half of retailers (48 per cent) expect Brits to be more mindful about their spending this Christmas as the cost of living impacts consumer spending, and Recommerce continues to grow.
Four in 10 (38 per cent) retailers predict Christmas shopping will start earlier as Brits aim to spread costs, while 42 per cent believe shoppers will opt for less expensive presents. A further 23 per cent also expect more gifts to be purchased second-hand this year.
In response, 26 per cent of retailers are looking at ways to offer customers more suitable ways to shop – such as by selling second-hand product lines – while 15 per cent plan to introduce a ‘gift swap’ service enabling customers to exchange unwanted presents from loved ones.
Linda Weston, Managing Director at Barclaycard Payments, said: “The Recommerce economy continues to grow as retailers make sustainable ways to shop available to customers. Whether launching rental models to drive new streams of income, offering reselling services in-store, or by increasing second-hand or pre-loved product lines, our data shows how offering alternatives to buying new can increase a business’ customer base and revenue.
“The ability to launch new sustainable shopping options at pace, and under challenging circumstances, demonstrates how agile British retailers continue to be. It’s the businesses who diversify and adapt to the shifts in consumer demands that will be best placed to thrive, especially as the cost-of-living impacts consumer spending and the world becomes more environmentally conscious. At Barclaycard Payments, we work closely with retailers to provide tailored payment capabilities as they expand into new lines of revenue, ensuring their customers have frictionless access to alternative, cost-effective ways to shop.”
Harry Wallop, Retail Expert and Commentator, said: “As belts get increasingly tighter, it’s the businesses who demonstrate that they have the customers’ best interests at heart that will go the distance. This means offering viable alternatives to buying new. Recycling, renting, reusing, and reselling options give consumers the chance to get hold of what they need, while being kinder on the pocket – essential as the cost of living continues to rise.
“Those businesses that flex and create new alternatives to traditional shopping methods can in turn build wider, more diverse customer bases while driving future loyalty.”
Retailers can find out more about how Barclaycard Payments can support with their payments solutions at: https://www.barclaycard.co.uk/business