The challenges of the second hand in retail
• Respond to the enthusiasm of French people who have the second-hand reflex before buying new
• Use the second hand as a brand loyalty tool
• Develop specific logistics for this new flow of products
• Set up sourcing to recover second-hand products
• Train the network in taking back and refusing items with the creation of a price list
7 billion euros in turnover. This is the weight of the second hand in France, according to KPMG. This market even reaches 86 billion on a European scale. This figure will increase further in the years to come as new consumption habits have been adopted. 74% of online shoppers, the majority of whom are women, say they now have the reflex of going to check if the product does not exist second-hand before buying it new, according to a Fevad x KPMG study unveiled during Paris Retail Week. Another strong figure, 1 out of 2 French online buyers claim to have bought at least one second-hand product in 2021.
“We are facing a major phenomenon, which represents for e-commerce one of the most striking innovations since marketplaces and m-commerce”, said Marc Lolivier, General Delegate of Fevad, during a conference on the circular economy held for Paris Retail Week. Same analysis for François-Xavier Leroux, partner advisory, customer & digital at KPMG: “The circular economy is becoming an essential pillar of e-commerce. Proof of this is that among the top 20 e-commerce sites, almost all offer a second-hand offer or are in the process of testing. »
Among the most mature second-hand markets according to KPMG, there is the automobile, where second-hand is institutionalized. Then there is fashion, especially for children and women. The second-hand textile market is estimated at 1.16 billion euros in 2021 in France. Finally, tech products, smartphones, computers or tablets, represent the third mature sector faced with the opportunity.
On the other hand, if the customer appetite is real, the offer is just beginning to take shape. The question of profitability is a tricky one… For François-Xavier Leroux, “Second-hand is a market that can be profitable if you ask yourself the right questions. » Indeed, the circular economy requires the transformation of part of the company’s activities, with significant work on the supply chain for sourcing, “the heart of the reactor”, product traceability, or at the marketing level. Champions are already emerging on the subject, with very different value chains. Marketplace, BtoBtoC or BtoC model, everyone deploys their organization to try to minimize costs and make the service sustainable.
At Vestiaire collective, tech at the heart of second-hand luxury
Marketplaces, such as Back Market, Vinted, LebonCoin or Vestiaire Collective have quickly conquered the hearts of the French. Their approach to the subject is very tech. During the round table organized at Paris Retail Week, Bernard Costa, chief strategy officer of Vestiaire Collective, a marketplace dedicated to luxury products, explained that “technology is a real asset. We systematically carry out digital authentication of the items sold. A physical authentication is carried out at the request of the buyer. The product then joins one of our five marketplace centers for verification and leaves in less than 24 hours to the buyer. 30% of the products sold on the platform have physical authentication and they represent 70% of the turnover. This organization thus makes it possible to limit costs while ensuring real customer satisfaction. And the model pleases. Vestiaire Collective has a business volume of 1 billion euros, of which 60% is done in Europe, 30% in the United States and 10% in Asia, with an average basket of 350 euros.
For Fnac Darty, product repair as a commercial argument
This stockless, tech-based model isn’t the only one to exist on the second-hand market. Fnac Darty has thus succeeded in industrializing this offer by relying on its internal logistics and its repair technicians. Sourcing is ensured by returns from online sales or by products that have had a breakdown during unpacking or during transport. “Initially, these flows were handled marginally, but the second hand has experienced a sharp acceleration to become a real activity in its own right over the past two years, explains Olivier Theulle, e-commerce and digital director at Fnac Darty. Our real difference is our ability to repair. We have also invested heavily in our supply chain. Ultimately, second-hand products represent 1.5 million orders per year. It’s an important part of our value proposition. »
For Fnac Darty, second-hand requires investment in repairs, logistics and proximity.
And the group intends to further strengthen the sale of second-hand products. Online, Fnac Darty wishes to expand its digital offer by opening its marketplace to other manufacturers of second-hand products, drawing inspiration from the Back Market model. On the other hand, “the customer must clearly identify what he is buying,” insists the e-commerce and digital director. And on the store side, for about a year, second-hand product corners have been set up in certain stores. The retailer thus wishes to promote the local resale of these products, in order to minimize the logistics costs and the carbon footprint of the resale.
Brands that want to regain control
After marketplaces or distributors, many brands, such as the ID Kids group (Okaïdi, Obaïbi, Oxybul, Catimini, etc.) or Etam are also showing renewed interest in second-hand. Via players like LeBonCoin or Vinted, they are already very often present there via consumers. “Petit Bateau has been doing second-hand for 130 years, since since the creation of the brand, products have been circulating within families without monetization of the brand”, laughs Guillaume Daroussez, CEO of the textile brand. By regaining control over the sale of their second-hand products, brands have a stake in customer loyalty and brand image with customers and also employees. “Doing second-hand must also be part of the corporate culture, believes the leader of Petit Bateau. I am pushed every day by my teams who find that we are not going fast enough on the subject. »
After launching a CtoC application in 217, Petit Bateau gave new impetus in 2021 by launching the collection of second-hand clothing at points of sale. Customers then receive a voucher, “valid for new or used products, we do not force consumption”, points the leader. Petit Bateau then repatriates these items to a warehouse to check them, which required reworking its logistics. The items are then resold in corners in stores. In 2022, around fifteen second-hand corners will be installed.
Petit Bateau focuses on omnichannel and rental
And the brand does not intend to stop there. Next steps, the brand also intends to develop this offer internationally and on its e-commerce site. Customers will be able to buy new and used items online with a single basket and a single package. “In 2030, we believe this will represent 30% of our volumes”, analyzes Guillaume Daroussez.
In addition, the leader also announces a notch further by betting on the rental of items for “become spotify for baby clothes”. The brand is part of a logic of use of articles and no longer of ownership. A state of mind that transforms the design of clothing. “Before, a t-shirt had to be able to live 5 lives, in the future, we will be on 8 to 10 lives, concludes the leader of Petit Bateau. The durability of products is a key prerequisite for promoting the second hand. »