Inflation has been eating away at consumers’ wallets for nearly three years and some retailers are starting to see a tide change as more and more shoppers trade down. Due to this shift, off price and discount retail is experiencing a boom, offering a prosperous environment for retailers like Dollar Tree and Dollar General.
Retail sales data from Placer.ai found that while visitation trends ranged across different categories, discount and dollar stores had the highest visits in H1 2024 compared to H1 2023. Ebay also released its 2024 Recommerce Report, confirming that this sector of retail is continuing to grow in popularity.
Discount and off-price retailers are offering customers what regular-priced retailers can not: deep savings on everyday items. The more that inflation hurts consumers’ wallets, the more they will continue to turn to the discount and recommerce — the buying and selling of pre-loved items — sector.
“Recommerce has been booming the last few years and much of that growth has been led by inflationary pressures as well as the pandemic,” Kidsy co-founder and CEO Shraysi Tandon says. “Inflation reached a record high last year, so consumers are feeling their wallets getting squeezed in every regard.”
Consumers Reducing Their Environmental Footprint
Tandon explains that another aspect of recommerce has been top of mind for shoppers: sustainability and climate change. So not only are people changing their spending patterns because of the economic footprint, but also because of the environmental footprint.
Ebay’s Recommerce Report found that 26% of customers are buying pre-loved items because of its sustainability and environmental benefits. People are becoming more concerned about the planet overall, and even if shopping and selling pre-loved for sustainability isn’t the primary motivator, it remains a key element of participating in the industry.
Recommerce Is In
Tandon notes how it’s becoming increasingly destigmatized to shop secondhand or to thrift items. “Maybe a decade ago, it wasn’t seen as very cool to be wearing something that was used. Today, it’s almost celebrated to thrift an incredible find or snag a great deal,” she says.
“Today’s customer is more savvy, economically and environmentally conscious than ever before and recommerce plays into both of those factors in a really big way,” Tandon continues. “I think from 2030 and beyond, when you walk into someone’s home, it won’t be a surprise to see that their furniture, appliances and closets are predominantly gently used and off-price finds.”
A Plethora of Recommerce Options
There are more recommerce and thrift options available to customers than ever before. Aside from physical thrift stores popping up along streets across the nation, a plethora of e-commerce platforms offering gently used or off-price items are at your fingertips.
“Gone are the days where you were limited to just the stores in your neighborhood or a handful of e-commerce companies that could deliver to you,” says Tandon. “Today, the choices are endless, and when that happens, there’s often a price point competition. So now, consumers have great accessibility to great products at great prices.”
Even with this increased competition, Tandon doesn’t believe it will lead to an oversaturation of recommerce options. “If you flip that and ask whether the full price retail model will ever become saturated, the answer is no,” she states. “Instead, we’ll see companies being forced to innovate more than ever in order to compete.”
Recommerce Demographic
For Tandon, the bulk of customers that shop at Kidsy are millennials. However, she is also starting to see an influx of Gen Z shoppers as they enter into parenthood and accumulate purchasing power. “They’re starting to establish themselves as a strong cohort in the space,” she says.
According to the Ebay Recommerce Report, Millennials show the highest frequency of purchasing pre-loved goods, with 9% buying weekly and 24% monthly. Gen Z also demonstrates significant monthly engagement, with 21% shopping for pre-loved items once a month.
The Future of the Industry
As inflation and environmental concerns continue to grow, Tandon predicts the recommerce industry will progress and flourish.
“Now, we’re also starting to see off-price and recommerce happen in different niches and verticals,” she says. “We’re squarely focused on the baby and kids category, but if you look around, there are other verticals outside of your typical clothing, shoes and accessories sprouting up such as electronics, home goods, furniture and even antiques.”
