What’s happening?
There’s a growing need to challenge the status quo as the current labels, structures and even business models don’t reflect the needs of the emerging generations. Consumers are increasingly rejecting traditional milestones and life stages or going through them in a different order. Whichever route they choose, the common theme is that they are navigating things differently and the old ways no longer make sense.
What’s causing it?
The huge disruption caused by the pandemic was a watershed moment for consumers and many aspects of their everyday routines, from their eco-ambitions to their working habits. A study by the World Economic Forum and IPSOS found that 72% of consumers want their personal lives to change significantly, rather than going back to the way things were before Covid. They’ve seen how living in the era of peak stuff has wreaked havoc on the environment, and as a result they want to do things differently going forward.
Outlook for 2024
Traditional systems and ways of doing business are being dismantled to make way for new avenues of commerce and new ways of perceiving products. In 2024, we will see non-linear retail models begin to reach the mainstream, although it could take years to realise the full scale of the changes. This year the priority will be to experiment and iterate as consumers reevaluate their perception of newness and possessions become assets.
05. New Commercial Hierarchies
Four years on from the initial outbreaks, the world is still reeling from the unprecedented scale of change brought about by the Covid pandemic. As people and brands continue to adjust we’re living in an era of transformation and experimentation. Companies are recalibrating and reconstructing, moving away from old narratives towards systems that align more closely with the outlook of younger generations and post-Covid lifestyles.
The perception of ‘new’ is changing. The word itself no longer only means ‘brand new’, but increasingly encompasses items acquired through resale, rental or other non-linear commercial models. In Stockholm, Sweden, outdoor brand Houdini Sportswear has launched a retail concept that flips the script on previously held notions of newness and ownership. In its new flagship store, customers decide how they want to access the products on offer, with any item available to buy, rent or subscribe to, whether it’s new or secondhand, or a repaired or reworked item. “We give the customer the choice of how they want to access Houdini garments and the user the destination for maintaining, rebooting, or reselling them,” says Angelica Molin, global head of D2C at Houdini. With this approach, access and ownership are given equal weighting, allowing the brand to tap into four different streams of commerce that complement rather than cannibalise one another.
Non-linear approaches will no longer be seen as a supplementary category for retailers but will blend seamlessly into existing strategies, in line with consumers’ changing perceptions around newness. According to ThredUp’s 2023 Resale Report, 75% of consumers have shopped or are open to shopping secondhand apparel, rising to 83% for Gen Z, while one in three items of apparel bought in the last 12 months was secondhand.
Resale concepts are now reaching a tipping point on their journey towards mainstream adoption. In August 2023, a branch of Finnish secondhand store Relove opened in Helsinki Airport. The world’s first second-hand store in an airport will allow customers to pick up unique pre-loved items with a backstory over a generic airport souvenir. Elsewhere, Tomo offers a reconstructed take on the department store format. Opened in 2022 at Westfield Mall of the Netherlands, the core focus is on circularity, helping customers shop in a more sustainable way through a range of in-store re-commerce services encouraging them to resell, rent, refill and repair. The store’s fresh approach to scaling up resale could hold relevance for big multi-brand retailers and department stores.
China’s DejaWOOO is the world’s first fashion resale aggregator. The platform is designed to allow users to search and shop for pre-owned fashion just as easily as the latest collections. The platform has partnered with the likes of What Goes Around Comes Around in the US, The Luxury Closet in Dubai and Collector Square in France, offering secondhand product acquisition on a global scale, and showing that the constantly evolving journey of search and discovery is not only relevant to traditional retail.
06. Asset Culture
As perceptions of newness begin to shift, customers are beginning to think of possessions as assets. Within this burgeoning asset culture, consumers are being encouraged to think of the value of a product throughout its whole lifecycle, far beyond the initial purchase. Sustainability concerns play a major role here, with a use and discard mentality increasingly being replaced by a more circular approach.
Digital product passports (DPPs) are set to be gradually rolled out across Europe from 2024, with the EU proposing for them to be mandatory by 2030. The regulation is designed with circularity in mind and will mean that many products are required to hold a DPP in the form of a QR code, an NFC chip or an RFID tag containing information about the materials used, the manufacturer, ownership, repair history, how best to recycle the product and even the conditions in which it was made. Brands must also enter information about resale and reuse value, forcing them to design with product longevity and durability in mind, as well as encouraging consumers to think about their possessions as future assets.
While many details of the wider rollout of the scheme have yet to be revealed, innovative retailers are already using DPPs as a brand building tool and as a way to embrace circularity. Look to sustainable fashion brand Pangaia, which has launched its resale platform Pangaia Rewear, integrating QR codes onto garments to make the resale process as seamless as possible. In November 2023, Balenciaga launched a collection of hoodies and T-shirts embedded with NFC chips linking directly to exclusive music from British trip-hop collective Archive, imbuing the products with extra value for customers and demonstrating the storytelling potential of the technology.
In June 2023, Selfridges held its Stock Market pop-up, inviting customers to ‘go long’ and have their pre-loved items of clothing valued, repaired and exchanged. Playfully decorated to look like the London Stock Exchange, the idea was to allow customers to discover the value in the things that they already owned. The initiative comes as Selfridges aims to make 45% of its transactions based in circular practices, including repair and resale, by 2030.
Even when it comes to peer-to-peer selling online, asset culture is seeing the rise of more contextual selling, giving items a new lease of life by telling their story. In 2023 we saw the rise of ‘Xianyu Literature’, where users on e-commerce app Xianyu (‘Idle Fish’) added lengthy backstories to product descriptions on their used items to make them stand out. Confessionals, personal anecdotes and humorous tall-tales served to add emotional value to items, allowing users to feel as if they were buying a little piece of history. With over 500m monthly active users, the platform is second only to Taobao in the Alibaba ecosystem and is the largest secondhand trading platform in China.
Launched in 2023, US fintech start-up Croissant helps drive new full-price sales by offering guaranteed buybacks within a year of making a purchase. Shoppers are incentivised to buy items they see online while locking in value from what the item will be worth once they are ready to sell it. Rather than encouraging shoppers to use credit to afford new purchases, Croissant positions them as assets in a portfolio, thanks to a browser plug-in that tracks the buyback value of goods purchased – almost like a savings account. Buyback value will increasingly impact consumers’ purchase decisions: “Research shows that over 80% of younger shoppers consider the resale value of a good before making a purchase,” says Croissant co-founder and CEO, John Howard. The Chrome browser plug-in also gives retailers access to a resale ecosystem without the hassle of managing it themselves, or requiring users to process the sales themselves.
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