Resale Market Recommendation: 7 Challenges and Options To Overcome Them | E-Commerce


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As second-hand fashion is gaining traction among consumers, digital resale platforms have emerged in full. Platforms like Depop, Farfetch, Poshmark and The RealReal not only have record performances, but also build close, loyal relationships with buyers.

For example, San Francisco-based The RealReal posted a record gross merchandise value (GMV) of $ 327 million in the first quarter this year. While an exceptional 80 percent of The RealReal’s first-quarter business came from repeat buyers, its first-time customer base also grew 34 percent.

As resale appeals to a growing share of consumers, especially Gen Z, more and more brands are jumping on the bandwagon. Levi’s, Lululemon and Nike launched internal resale programs last year.

However, the rise of resale brings many challenges for ecommerce brands and marketplaces. Let’s take a look at the most pressing reseller barriers and solutions to overcome them.

1. Avoid disappointing buyers

When reselling used items, you cannot fully control the volume of each item or style in your inventory. Aside from approving and rejecting items for resale, there is no way you can dictate how many items you can add to your ecommerce site. Combined with the rapid turnaround of new items, this means that buyers can easily be disappointed when the item they want is out of stock.

Perhaps you’ve already sold that one vintage Chanel messenger bag that a shopper wanted, or you don’t have the New Balance 530s in its size. The challenge for brands and marketplaces in reselling is to create a journey that quickly and successfully brings shoppers together other products they will love (in the right size) so that they are motivated to buy something different and not chop off.

The solution

There are a few ways to keep the product discovery journey going and prevent your buyer from leaving the page in disappointment.

Hyper-relevant product recommendations provide a remedy here. Let’s take the example above with the New Balances. You might not be a size 9.5 in the 530, but you could view all of the similar models that your size is in.

Another option is to provide tailored inspirational content based on your past searches.

E-commerce product image carousel

By displaying a carousel of product images or an inspiration board that includes the product categories or brands they were previously looking for, you can draw the shopper’s attention to other items they might like.

2. Standardization of product tags and descriptions

Resale marketplaces like Depop and Poshmark, where buyers themselves upload items for sale, use a non-traditional inventory model.

One of the biggest challenges with this model is the standardization of product descriptions and tags, which is necessary for a consistent discovery experience and in-depth data analysis.

E-commerce product labeling

The solution

You cannot rely on individual users to adhere to the tagging and description guidelines. Ten different sellers could upload photos of the same green Michael Kors dress with different descriptive words and tags. You need a system that can analyze product photos and automatically generate robust, accurate, and standardized product tags and descriptions.

Solutions such as visual AI-based deep tagging analyze articles using a variety of visual attributes and automatically produce all possible relevant tags with standardized keywords.

AI-based product labeling

3. Re-enact “The Hunt”

For thrift buyers, one of the most satisfying aspects of the thrifty experience is digging through clothes shelves to find those few special pieces. This real treasure hunt has helped some thrift stores like certain Goodwill locations have a reputation for providing the best experience.

Now that more and more purchases are being relocated online, it is the job of fashion retailers to deliver an equally satisfying online hunt.

The solution

While many thrift shoppers have the patience to physically sort through endless clothing shelves, they are likely to have less patience scrolling through rows and rows of irrelevant items on your website. Because of this, you make sure that key ecommerce features – like on-site search and web navigation – are working properly.

Think of it as a shopper walking around a physical thrift store. Everything from the images and text on your homepage to the arrangement of your menu buttons, which categories are presented, which search functions you offer and which filters you can apply, influences how successful “the hunt” will be.

4. Authenticating items

Certain segments of resale – like sneakers – are incredibly lucrative.

Some of the most popular sneaker drops are selling on resale platforms like Goat, Fight Club, Stadium Goods, and eBay for 100 to 400 percent more than the retail price.

With such a high price tag, a system and protocol to authenticate items is essential – not just for pricing, but also to avoid annoying customers and ruining your reputation.

The solution

Each reselling platform has its own guidelines for authenticating items. While getting items verified by experts can be ideal, not all brands or reselling platforms can do it on a large scale.

In such cases, it is best to combine AI-based solutions trained to detect counterfeits with a team of “counterfeit hunters” to ensure product integrity.

For example, Poshmark has community reporting and a “content integrity” team tasked with finding and removing allegedly counterfeit products. It also has machine learning and a rules-based detection system that proactively identifies and removes suspicious product entries.

5. Set the right price

Price determination often goes hand in hand with authentication. But aside from sought-after sneakers, luxury items, and rare vintage pieces, used items generally depreciate in value, which means their resale price should be lower than their original retail price.

But how do you decide how much lower? For many brands entering resale and launching buyback programs, this may feel like a subjective decision.

The solution

Develop a standardized set of criteria and a corresponding point system for evaluating and pricing articles. Here are just a few of the points to consider:

  • Examine the products for obvious signs of damage, wear, and imperfections. Defective articles are cheaper.
  • Register the model or style of the item and use historical data to understand how popular the product was when it was launched. Popular items become more expensive.
  • Analyze current market and trending data to understand how in demand the item is now. More demand = higher price.
  • Count how many of these items you have in your resale program. Rare items can be more expensive (if they are also asked for).

After you’ve rated an item on all of your criteria, you can determine what percentage you want to rate it up or down in your resale program.

6. Exact representation of the condition of articles

This is especially relevant for platforms where users upload pictures of their own items for sale.

To accurately represent the condition of used items, sellers are required to take high quality photos from multiple angles, including those showing imperfections or damage.

The solution

While you can’t expect every one of your salespeople to invest in a professional camera, you can post guidelines to help them take quality photos with their smartphones.

For example, you can require sellers to take at least six photos with instructions on the angles to take.

Other guidelines could specify whether the items need to be included against a white background, whether they need to be shown on a mockup, whether the original packaging needs to be included, etc.

As an ecommerce site, you can also add features like super zoom so buyers can inspect items up close.

7. Impressive balance between vintage and new

Some buyers turn to thrift to find hard-to-find vintage pieces, while others are simply looking for a better deal on contemporary items.

For brands that resell used goods, they need to determine how old items are reconciled with newer items.

The solution

As with any other investment scenario, brands and retailers should use data to make their decisions. Ultimately, getting the right balance is about accurately predicting customer demand.

  • Where do secondhand shoppers look locally? What percentage are looking for current styles and what percentage are looking for vintage finds?
  • How popular were / are the pieces that consumers want to sell back to you?
  • What are the current trends saying? Is there a certain vintage style coming back? Is a new trend still picking up speed?

By considering these types of questions and analyzing relevant data, you can get a better idea of ​​which styles and pieces to resell and which to decline.

The resale wave has not yet reached its peak

Resale is still on an upward trend. Consumer demand continues to rise, and new platforms are emerging on the left and right. Investors who have watched the market succeed are lining up to join.

Even if reselling isn’t for every brand or retailer, it is worth thinking about what it might look like in the future and preparing to overcome predictable barriers.

Offer Fryman is Co-Founder and CEO of Syte.

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