Recommerce economy now worth £7bn in the UK

Resale and rental is booming in the UK with "recommerce" now accounting for 1.6% (almost £7 billion) of total retail sales.

According to a new study from Barclaycard Payments, in partnership with Development Economics, the growing trend of more conscious consumerism has contributed significantly to the UK’s economy, bringing in £6.99 billion in the last 12 months alone. Analysis of the recommerce market also found that this activity contributes 49,000 jobs across the UK retail sector.

Recommerce (in particular rental) has also boosted the fortunes of those retailers who engage in it, with eight in 10 retailers (82%) that offer rentals noticing a boost in revenue since they started doing so; a further nine in 10 (90%) have seen their customer base grow and a similar proportion (87%) has seen profits increase. Those that offer such services report that, on average, a third (33%) of their revenue now comes from rental models.

Fashion has been at the forefront of the recommerce revolution and is the second largest sector in the space.

The sectors at the forefront of the Recommerce market:

• Entertainment and electronics: such as laptops, headphones and musical instruments (47%)
• Clothing and accessories (43%)
• Home décor and houseware (41%)
• Baby care and children’s market (35%)
• Sports and fitness equipment (32%)
• Pet items (18%)

The trend across the board in retail has been for businesses to bring resale and rental in-house and fashion too has led the way in this with companies such as John Lewis, Marks & Spencer, Selfridges, Flannels, Mango, ASOS and H&M among those to enter the rental space in earnest.

Flannels entered rental in October 2022

The Recommerce economy is expanding further will brands also offering their own resale services. According to Barclaycard Payments, of those retailers that offer a more sustainable service, three in 10 (29%) now provide a platform for customers to resell previously purchased goods which the business then sells on as a preloved product.

A similar number (31%) has added the option for customers to recycle products in-store, while three in 10 retailers (31%) offer a repair service so that customers can extend the life of their items.

Innovative retailers who offer a more sustainable service have also introduced ‘swapping events’ for customers to exchange items purchased through the business with others (18%), and reselling platforms for customers to re-sell goods even if they weren’t purchased at the company (22%)

Marks & Spencer has been a pioneer in this space. Its 'Shwopping' scheme was launched in partnership with Oxfam in 2008. Since then it has collected more than 36 million items, which has contributed an estimated £23 million to the charity. This year it expanded the initiative in partnership with eBay inviting consumers to returned used school uniforms to be sold on the resale platform (main image). 

In response to the growth of online shopping, over half (52%) of retailers have invested in new technology to ensure a seamless recommerce shopping experience, with just under half of those (23% overall) having done so in the last three years. A further 23% are considering introducing this type of technology in the near future.

Of those that have invested in technology to aid reselling, popular developments include introducing a system that offers a quick, continuous check out process (46%), creating an online product resale page (39%) and contracting a third-party supplier to build a designated app enabling customers to resell their unwanted items (31%).

With the cost of living crisis ongoing, this space is only set to grow further still with 46% of consumers saying they are looking to recommerce to help with their finances and the same amount saying they do so to reduce their environmental impact.

Harry Wallop, Retail Expert and Commentator, said: “I think it is amazing that the Recommerce Economy is increasingly valuable to the wider retail industry; a contribution of £7 billion proves that retailers and business owners can no longer ignore the trend. And it is only likely to get bigger as more high street names embrace the idea that they can rent out items or sell second hand goods alongside new product lines as a way of retaining and attracting consumers.”

Linda Weston, Managing Director at Barclaycard Payments, added: “Sustainability and the rising cost of living continue to impact merchant decision-making when it comes to the Recommerce Economy.

“Activity within this sector contributes significantly to the UK Economy and our research highlights that merchants are increasingly taking interest in facilitating more sustainable and cost-effective shopping methods for consumers, actively investing in new technology as well as offering recycling or reselling platforms and services. Our data demonstrates just how beneficial this can prove to revenue and income streams amidst a challenging economic climate.

“We work closely with retailers to provide tailored payment capabilities, to ensure their customers have access to a variety of ways to shop. As we continue through the golden quarter and retailers start looking to the year ahead, there is a clear opportunity to capture the demand for sustainable and affordable products and in turn drive loyalty and sales.”