The pandemic has drawn a line in the sand with clear winners and losers in the world of retail. Those that have fared well are the business who have excelled in their omnichannel experience, meeting their customer with choice, flexibility, and ease of use.
But what if I told you that even the best, current omnichannel solutions aren’t enough to continue to win in the post-pandemic era? That there’s another competitor that is eating your lunch and growing at 20x. It’s your own brand. On second-hand marketplaces.
The pandemic saw a massive boom of consumers turning to places like Facebook Marketplace, Poshmark and Kijiji to buy and sell their used goods. With the constant desire for something “new” and purging goods to free up space at home, the second-hand economy has never been bigger. This has left brand-owners in a position where they cannot control their brand experience and are not taking a cut of the profit on second, third, etc. sales.
But there is a way to solve this problem-expand your channel strategy to include circular programming. Circular programs are a sure way to deliver on shifting consumer consumption habits, all the while finding a recurring revenue stream and enhancing brand loyalty.
A common myth is that circularity equal 100% recyclable products. However, on the contrary, businesses who have any durable consumer good can participate in the circular economy. Here are three models you can consider when looking to expand your channel offering:
Rental subscription maximizes the full useful life of a durable good. Rent your good to a consumer for a fraction of the Manufacturer’s Suggested Retail Price, they use it for a period of time and send it back to get something new. This creates a stronger loyalty loop with the brand and monthly recurring subscription fees can result in up to 5x profit on inventory vs. traditional linear ecommerce.
The On-Demand model is the perfect fit for recyclable goods. On-Demand allows consumers to subscribe to a single SKU, use it, send it back when it’s worn through and get a brand new good in its place. Running shoes are an excellent example where a runner would subscribe, train in a pair, wear them through, send them back and get the exact pair new, when they need them.
Buy Back Programs
Want to get your customers coming back to spend more dollars with your brand? Buyback programs are a great way to initiate this behaviour. Offering to purchase back your own goods allows your brand to provide that consumer with a credit to spend more dollars with you. The used good can be listed on a branded second-hand marketplace or be recycled.
While many retailers are focused on getting base business back up and running, don’t be left behind if your brand isn’t in a position to build a solution. Existing platforms can be the way to getting some skin into the circular game, quickly. loopt is a white label rental subscription solution that can quickly get your program off the ground and get a new revenue stream in the door.
Changes in the retail industry will remain fast and furious, but circular technology offers a path to more sustainable and resilient business models that not only provide customers amazing experiences, but also serve as a responsible choice.