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Former The RealReal Exec Spills on Re-Commerce, Gen Z and Retail Trends
Karin Dillie has been a leader in the luxury consumer space for more than 12 years. The former Director of Business Development at The RealReal has just secured a new role as VP of Partnerships at Recurate and we sat down with her to discuss the future of resale, re-commerce and how the next-gen shopper will change the face of retail as we know it.
What began as a simple cleaning of one’s closet became the realisation of the untapped potential of the resale market. Retailers and re-commerce brands like The RealReal, Recurate and Vestiaire Collective have shaken traditional retail formats. This has continued to grow with the increased understanding of fast fashion’s impact on the planet.
“[Knowledge of resale value has] led to the next big thing: people changing what they purchase on the primary retail market, focusing on items that they see has great value on the secondary market,” Karin Dillie tells Power Retail.
The pandemic has changed a lot about the world as consumers and businesses. From the immediate closure of stores in early 2020 to the accelerated growth of e-commerce, the world we live in now is no longer black and white when it comes to retail. Omnichannel strategies are at the forefront and have become the priority for many businesses as they adapt to the ever-changing landscape.
“In many ways, e-commerce became less of a change versus an accelerant and a bridge to brick-and-mortar,” Dillie says. “Most importantly, resale became a way to bring even more consumers into a brand’s ecosystem, both on the primary (e.g. the brand’s original store) and secondary retail market. Additionally, since the pandemic, nearly every fashion brand has been trying to figure out how to give the consumer an even better experience online (e.g. sound, touch, visuals).”
The resale market has an estimated value of $5 trillion, with leading retailers gaining attention from luxury brands like Gucci and Alexander McQueen. Online marketplaces like Etsy have since acquired Depop, a favourite amongst Gen Z shoppers. Will this success will continue to grow even after the pandemic has passed? Yes, definitely,” Dillie tells us. “The resale market as a whole, both consignment and peer to peer resale, will continue to grow dramatically. Our team here at Recurate is bullish on recommerce in general and see a ton of opportunity for growth, especially amongst Gen Z consumers, across all resale channels.”
As previously mentioned by Power Retail, the Next-Gen shopper (Gen Z) is a digitally native shopper who prefers brands that align with their ethics and values. According to a report from WP Engine, Gen Z represents up to a whopping $150 billion in buying power worldwide. Moreover, they influence $600 billion in spending globally. In 2020, Gen Z accounted for 40 percent of global consumers.
For Dillie, Gen Z is a progressive and adaptable generation that has blossomed in the wake of the pandemic, especially as oncoming consumers. “I love Gen Z!” she tells us. “This generation has progressed so quickly, and the pandemic only further ignited their passion for sustainability. I love that Gen Z consumers are using their voice to demand what brands need to be. Brands need to listen to what this generation is prioritizing, such as clothing and accessories that have less of a footprint on the planet, are well made, and rare.”
So how should retailers look at the Next-Gen shopper? According to Dillie, businesses should look at what people are doing already and then respond accordingly. “For example, Gen Z is not afraid of purchasing clothes that have had a third or fourth life,” she says. “They totally normalised circular fashion and took it a step further. What’s more, Gen Z shoppers love experiences, stories and want a deeper relationship with the brands they buy from. For instance, Gen Z consumers would love to know the backstory behind the backpack that an influencer took with them on an epic backpacking trip before purchasing it secondhand.”
As more retailers understand the resale market value, bigger brands are jumping on the re-commerce bandwagon. This month, Amazon Australia entered the resale market by introducing Amazon Warehouse, and earlier in the year, Poshmark landed Down Under. While the resale market develops and expands further, could this harm the entire category?
“There is a myth that resale is cannibalising the primary retail market,” she says. “In fact, what the numbers show is that resale is opening up a totally new sales channel for brands that they never had before. Fifteen percent of the time, consumers are buying both new items and secondhand items in the same transaction. Consumers are being upsold because brands are offering both primary and secondary shopping options.
“At Recurate, we are growing the resale market even further and are bringing more and more consumers into the brand. Just five years ago, people weren’t comfortable buying resales, but now that they see their favourite e-commerce store selling resale items, they are more likely to purchase second-hand. We see that in the numbers, 50 percent of our brand’s second-hand buyers are new to the brand. We are accelerating this huge, trillion-dollar retail trend at Recurate,” Dillie explains.
So why is the resale market is so popular right now? It’s all about sustainability. “Sustainability is a growing concern for consumers across the world, but access and affordability are still major factors in why secondhand is so appealing,” Dillie explains. “A $400 dress by a brand may be unaffordable, but that same dress on the secondary market could be $200 and becomes much more accessible to the average consumer that wants to buy quality items.”
We’ve noted many trends over the years on Power Retail, but one of the long-lasting trends in the industry is the importance of establishing trust with the consumer. No truer words could be said in this day and age. “Nobody was encouraging anyone to sell on eBay five years ago,” Dillie says. “The onus was on the customer. Now, brands are encouraging consumers to sell through their e-commerce stores. More brands participating in resale will attract new customers and create much broader fashion resale participation.
“We are also seeing that brands are getting to know their customers and creating more community around their brand. Previously, brands did not offer a secondary market. Resale grew despite brands. Brands are now following this consumer behaviour.”
What does online retail look like to Karin Dillie in the next 12 months? “Candidly, every brand and retailer seems to be re-platforming!” she says. “Most brands and retailers were dramatically impacted by the pandemic and now are thinking through the best way to engage their customers. One major strategy we see is that brands are actively investing in and building out their community — we’ve seen resale become a significant way to engage and grow that loyal brand community.”