DIpil Das
FROM THE DESK OF DEBORAH WEINSWIG
A Wave of New Resale Ventures Sweeps European Retail Resale is sweeping mass-market retail and major names in Europe, from ASDA to IKEA and Zalando, are riding the wave. Some of this momentum is driven by the scalability and accessibility associated with online recommerce platforms, which capitalize on the opportunity to match buyer and seller in a way that has traditionally been a barrier for small-scale thrift stores. However, a number of resale initiatives are also occurring in physical stores—most of which are focused on apparel and furniture. Here’s what we have seen recently:- ASDA, the UK’s third largest grocery chain, this week announced that it is teaming up with Preloved Vintage Wholesale to sell used clothing in 50 of its stores.
- On April 20, apparel platform Zalando announced plans to extend its new Pre-Owned offering to seven further markets, after launching in Germany last year.
- In late 2020, IKEA announced that it would offer a buyback-and-resale services in its UK and Ireland stores. This came soon after IKEA opened its first secondhand store, in Sweden.
- In summer 2020, department store chain John Lewis announced that entry into the resale market was one of a number of strategies being considered as part of its turnaround.
Europe Consumer Survey: Agreement with Selected Statements on Secondhand Clothing (% of Respondents) [caption id="attachment_126636" align="aligncenter" width="725"]
Base: 2,500 respondents in France, Germany, Italy, Sweden and the UK, surveyed Source: Zalando [/caption] At the same time, Zalando noted an attitude-behavior gap in relation to sustainability—in other words, what consumers do does not always match what they say, including in surveys. This is perhaps not surprising—asking a consumer to reflect abstractly on their attitudes in the confines of a survey is very different from asking them to make a choice in a busy store, when there are other pressing issues—such as fit, price, color and style, and so on. For resale, this means that while around three-quarters of European consumers surveyed had bought secondhand clothing at some point (chart above) and 61% say secondhand is important to them, only 25% regularly buy secondhand clothing (chart below). Zalando is aiming to close that gap, including by making it easier for consumers to change their behaviors, recently stating that the company aims to extend the lifespan of over 50 million of its products by 2023. Encouragingly, Zalando recently reported that its nascent Pre-Owned offering was seeing a 25% category repurchase rate, which is significantly higher than it sees for other categories.
Europe Consumer Survey: What Consumers Say Is Important to Them vs. What They Do (% of Respondents) [caption id="attachment_126637" align="aligncenter" width="725"]
Source: Zalando[/caption]
How Big Is the Opportunity?
The total opportunity encompasses online-only consignment sites; e-commerce and app marketplaces, such as Depop and Vinted as well as more established names such as eBay; specialized stores; and in-store departments in regular retailers, such as those being launched by ASDA. Across these segments, the secondhand market undoubtedly becomes a multibillion-dollar market in major European economies.
In the UK, the store-based secondhand sector saw total sales of £2.7 billion ($3.8 billion) in 2020, down 16.7% versus 2019, according to Office for National Statistics (ONS) data, as lockdown-driven store closures hit the sector. Prior to 2020, the sector had been outperforming the overall nonfood retailers’ sector, of which it is a part, as charted below. As this excludes any online-only retailers’ sales of secondhand products, including online platforms, the total secondhand market has likely been growing faster than the store-based data indicates.
The £2.7 billion in sales in 2020 constituted 1.74% of a total £154.2 billion ($214.9 billion) store-based nonfood sector total, per the ONS. For online-only, resale likely contributes a larger share than 1.74%, given the consolidation opportunities that e-commerce platforms allow.
UK: Store-Based Secondhand Retailers vs. Store-Based Nonfood Retailers in Total: YoY % Change in Sales [caption id="attachment_126638" align="aligncenter" width="725"]
Data are seasonally adjusted. Secondhand retailers are a sub-set of nonfood retailers. Store-based or store-focused retailers only, which includes any online sales made by those retailers. Source: ONS/Coresight Research [/caption] For market entrants and emerging players, the scale advantages of e-commerce look understandably attractive. But for incumbents, including large-store retailers such as ASDA and IKEA, in the trial stages of looking to add on resale offerings, a store-based approach is likely to continue to appeal, in terms of driving traffic and incorporating new resale businesses within existing retail operations.
US RETAIL AND TECH HEADLINES
Albertsons Companies Partners with Adobe Experience Cloud To Drive Hyper-Personalization (April 27) ChainStoreAge.com- Grocery chain Albertsons Companies has partnered with Adobe to drive hyper-personalization and customization at Albertsons through the Adobe Experience Cloud suite, harnessing customer data across different channels.
- Albertsons will use data insights to develop new customer services. Chris Rupp, Albertsons’ Executive Vice President and Chief Customer and Digital Officer, stated, “We are investing now in differentiated services such as temperature-controlled pickup kiosks, two-hour fulfillment and even remote-controlled delivery robots. As we boost our omnichannel offerings, we are relying on Adobe Experience Cloud apps to help us get more value from data and leverage cross-channel insights to improve the overall shopping experience.”
- In a multiyear partnership with licensing firm IMG, Gap Inc. has announced plans to launch a Gap-branded collection of sunglasses and prescription frames from Italian eyewear maker De Rigo.
- The eyewear line will debut in 2022 and will launch in Brazil, Canada, Mexico and the US. It will be distributed through De Rigo’s retail and wholesale network and via selected Gap stores. Senior Vice President of Gap Inc. Adrienne Gernand stated, “Partnering with licensees such as De Rigo gives us the opportunity to amplify our strong, globally relevant brand and extend its reach to customers around the world.”
- Sally Beauty has partnered with Revionics, an artificial intelligence (AI)-based pricing platform, to strengthen the beauty retailer’s pricing performance strategy. The retailer expects the partnership to enable it to offer competitive price points and deliver better-targeted promotions, which would maximize sales and margins, as well as boost customer loyalty and support value generation.
- Pamela Kohn, Senior Vice President and Chief Merchandising Officer at Sally Beauty,stated, “Revionics’ pricing solutions offer trustworthy, data-driven recommendations that will adjust with our customers’ evolving expectations and prepare our business for both short-term and long-term success.”
- Beauty retailer Sephora and department store chain Kohl’s have announced that over 125 prestige beauty brands will be available from Sephora at Kohl’s in August 2021, as part of the companies’ omnichannel retail partnership. Of these 125 brands, 75% are exclusive to Sephora US and Sephora at Kohl’s, including Drunk Elephant, Fenty Beauty, Milk Makeup and Tatcha.
- Initially, the 125 brands will be available in 200 Kohl’s stores and online at Kohls.com. Sephora and Kohl’s plan to expand the offering to about 850 stores by 2023, alongside plans by Kohl’s to open 400 new retail locations in 2022.
- Target has announced a collaboration with plant enthusiast and interior stylist Hilton Carter to launch a limited-edition collection of live and faux plants and accessories, including ceramic pots and watering cans. Carter began his career posting plant styling content on Instagram in 2011—he now has over 1 million followers and has written three books.
- Hilton Carter for Target will be available at selected Target stores and on Target.com from May 14, 2021. The collection will feature more than 65 products in the price range of $5–$130.
EUROPE RETAIL AND TECH HEADLINES
LVMH Announces Launch of Its First Digital Materials Resale Platform (April 26) Company press release- French luxury goods conglomerate LVMH has launched Nona Source, an online platform designed to resell unused materials from its Fashion and Leather Goods business at competitive prices.
- The launch of Nona Source supports LVMH’s wider environmental strategy—the platform encourages sustainable sourcing by enabling new designers to reuse LVMH’s deadstock to create new merchandise.
- Nestlé has announced plans to acquire all or part of The Bountiful Company, a US-based manufacturer and retailer of health and wellness products including supplements, probiotics and multivitamins.
- The deal will help Nestlé to strengthen its position in the US wellness and health markets. The company has acquired several wellness brands since the appointment of Mark Schneider as CEO in 2017.
- Superdry has announced the appointment of Peter Sjolander as its new Chairman. Sjolander replaced previous Chairman Peter Williams on April 29, 2021.
- Sjolander brings many years of experience in advisory, executive and non-executive positions. He was CEO of clothing retailer Helly Hansen for almost eight years and spent 13 years at NIKE across multiple leadership roles in marketing, product and general management.
- Waitrose reported a 213% year-over-year increase in its picnic and food-to-go items in March 2021. There has been an increase in outdoor eating due to the easing of lockdown restrictions in the UK and demand for items including fresh antipasti, seafood antipasti and dips has increased considerably.
- Due to increased demand foroutdoor picnic food, Waitrose has announced plans to introduce new picnic boxes during National Picnic Week, which runs from June 19 to 27, 2021.
- Plus-size clothing retailer Yours Clothing has announced plans to open shop-in-shop locations in Tesco supermarkets as part of a new partnership deal.
- The first of these new locations will open on April 30, 2021, in the Tesco store at the Serpentine Green Shopping Centre in Southern Peterborough. The new long-term project is likely to create multiple job opportunities in the near future.
ASIA RETAIL AND TECH HEADLINES
Bombay Shirt Company Partners with Handcrafted Fabric Company Safomasi (April 28) FashionNetwork.com- India-based bespoke clothing brand Bombay Shirt Company has launched a new collection in partnership with Safomasi, a handcrafted fabric and home-furnishing company.
- The gender-neutral collection comprises shirts with three specially designed prints, featuring crossed fingers, horseshoes and a waving cat. The shirts are priced at ₹2,500 (around $33.60) each.
- Luxury watchmaker Breitling has jointly opened its fourth Hong Kong boutique in partnership with Japanese watch brand Oriental Watch. The store is located on Queen’s Road Central in Central District, Hong Kong.
- The store showcases an interactive augmented-reality feature that offers a phone filter of the Curtiss Warhawk jet, the inspiration for Breitling’s aviation collection. To unlock the feature, shoppers have to scan a QR code and point their phone camera at a wall featuring Warhawk graffiti.
- The Confederation of All India Traders (CAIT) has petitioned India’s Commerce and Industry minister Piyush Goyal against e-commerce companies selling nonessential goods, which is against the lockdown rules.
- CAIT General Secretary Praveen Khandelwal has alleged that Amazon and Walmart-owned Flipkart have made “illegitimate financial gains” by selling nonessential items, including phones and electronic accessories, in areas that are under lockdown.
- Japan’s retail sales grew 5.2% year over year in March 2021, ahead of the consensus estimate of 4.7%. This marked the fastest rise in retail sales since the 6.4% increase in October last year.
- Retail sales grew 1.2% versus the previous month, on a seasonally adjusted basis. The increase was driven by higher spending on clothing and accessories as well as on general merchandise.
- Jingxi has opened its first store focusing on baby and maternal care products. Jingxi is Chinese e-commerce giant JD.com’s online platform targeted at price-conscious shoppers in lower-tier markets.
- The store is located in Chengdu, the capital of Sichuan province. The store offers numerous product categories including apparel, nutritional supplements, sanitary care and wash care products and has a designated support area where shoppers can purchase cross-border products.