How apparel SMBs can embrace ‘ReCommerce’ in their inventory management systems

09 Mar 2022

The reCommerce industry is seeing a huge boom in the fashion industry — and you might not know anything about it. 

Current predictions suggest that the reCommerce sector will account for 14% of the apparel, footwear, and accessories market by 2024. That’s substantial enough that every SMB should have their finger on the pulse of this growing trend. 

So what is reCommerce, why is it growing, and how can you get in on the action? 

Let’s dive in. 

What is reCommerce?

Short for “reverse commerce”, reCommerce is the practice of selling goods that have already been sold before. It’s similar to resale, though it encompasses upcycling and luxury resale as well and has a focus on quality products. 

Unsurprisingly, clothing and apparel hold dominance in the reCommerce market, expected to take up $51 billion of the market share by 2023. ReCommerce examples include apps like Depop and Vinted and traditional charity and vintage shops. 

Why reCommerce is growing in popularity

There are a few key reasons behind the growing popularity of reCommerce. All of these reasons are largely attributed to Gen Z and Millennials, who are becoming a dominant consumer base worldwide. 

These demographics are interested in affordable products, environmental sustainability, and product sharing. We can see this reflected in the popularity of micro-mobility and ride-sharing services and apps like Etsy and eBay, which make it easy to resell products online. 

ReCommerce meets all of these desires at once. It provides consumers with high-quality products at an affordable price, reduces the impact of clothing on the environment, and encourages a culture of sharing and reusing. 

How apparel SMBs can embrace reCommerce

With the popularity of reCommerce comes an immense opportunity for apparel SMBs. Businesses can capitalise on this growing section of the fashion industry and build a brand around affordable, sustainable clothing. Below are key strategies to help you get in on the reCommerce trend. 

Use it to promote sustainability

First and foremost, make it clear that reCommerce is about promoting sustainability. You can present your mission as reducing the carbon footprint of clothing and helping consumers make eco-conscious purchasing decisions. 

Many businesses are beginning to adopt recycling programs for clothes. These brands repurchase clothes from customers and resell them at a discount to new customers. This kind of cycle not only helps your business earn more per item sold but also create a community that’s excited and passionate about what you’re doing. 

As mentioned, sustainability is one of the key reasons reCommerce is growing in popularity, so it’s important to stress this point in your marketing and positioning. 

Make the reCommerce experience as fun and gratifying as the traditional experience

For many consumers, the experience of buying reCommerce products is as fun or potentially even more fun than traditionally buying clothes. Rather than looking for their next outfit, individuals can shop for hidden gems and give new life to old garments. 

Make this excitement core to your brand! Have a rotating catalogue of products, host popup shops if possible, celebrate and announce great finds, and if you have a physical location, organise it in such a way that it’s easy and rewarding for customers to find unique items. 

ReCommerce may be a responsible way of shopping, but that doesn’t mean it needs to feel stiff. Mix the responsibility with the fun of thrifting and create an experience unique to your SMB. 

Make flexibility a core part of your brand

Customers don’t want to feel like they’re buying from the same tired brands. So make it clear that your SMB is not one of those brands. ReCommerce presents an opportunity to be flexible, unique, and innovative in the eyes of your customers. 

You can present a flexible, modern front by having omnichannel ordering, offering sales and deals, using unique pricing models like pay-by-weight, incorporating tailoring and embroidery into your services, and more. 

Additionally, while consumers are likely to be a bit lenient about how “trendy” your catalogue is, this doesn’t mean that your business should completely throw trends to the wayside. Stay on top of what’s popular and keep trending items in rotation. 

Turn returns into an investment

In a more traditional apparel sector, getting returns from customers is generally negative. But in reCommerce, it’s just the opposite. Returns are an opportunity and an investment. 

When garments are returned or sold back to you, ask your customers why they’re bringing things back. Maybe the sizing is a bit off for a particular line, or the fabric wears unevenly. From there you can make tweaks before reselling. That could mean labelling the item more appropriately, improving the sizing information, or recycling the fabric to use in other parts of your production.

Take advantage of physical and digital spaces

Customers are no longer limited to physical shops, and you shouldn’t be either! Ensure your brand has an online presence by sprucing up your social media or website. This will keep your business accessible in as many ways as your customers expect it to be. 

That said, physical space is still important to apparel. It provides a space for buyers to experience clothing in person. Brands embracing reCommerce should take advantage of both physical and digital storefronts. 

Invest in an inventory management system that serves your needs

Lastly, as you might expect, moving into the reCommerce space will change how your business handles its inventory. Your brand might be much more local than it has been in the past, and managing returns, new merchandise, and buy-back items could get complicated. 

That’s why your brand needs to invest in an inventory management system that best serves your needs. Let’s dig into how that might look.

How reCommerce will reshape the way you manage your inventory

Reframing your inventory management in the context of reCommerce will primarily come from the way your SMB handles returns. Traditionally, returns are viewed as a loss. Sending a product backwards along your supply chain is costly, and so returns are usually handled in a way that saves as much money as possible. 

ReCommerce changes this completely. Rather than sending items backwards or simply discarding them, they’ll need to be reentered into your inventory management system as a new, returned product. This will reduce the timeframe of returns, change where returns are sent, and utilise in-country channels. 

Your inventory management system will need to work across borders

To make this work, you’ll need a system that is as effective across borders as it is within them. Products that are returned are less likely to be discarded or sent back to where they were manufactured. 

Instead, they’ll be kept in-store or shipped to another local resale channel. And when you’re working in reCommerce, this will happen more often than in traditional apparel businesses. You need an inventory and order management system that can accurately keep track of these items as they move back and forth through your channels. 

Flexible pricing will become core to your inventory management 

ReCommerce is an opportunity to earn more per item — but only if you can properly keep track of it. You’ll need your order management platform to help you keep up with an item’s changing price and status as it moves through, leaves, and comes back to your business. 

You can use this data to see how much you’re earning from reCommerce strategies and adapt accordingly. 

Manage your reCommerce inventory the right way with Workhorse

Reach out to the team at Workhorse today, and we can tell you about an inventory management system that’s ready to support your reCommerce strategy. Our platform is fully configurable to give you exactly what you need and nothing you don’t. Book a free demo to see Workhorse in action!

Ready to transform your inventory management?

Ditch the spreadsheets and provide your team with the tools they need to make better inventory decisions.