Recommerce

Recommerce or reverse commerce, refers to the recovery of products over electronic systems, such as the Internet, or through physical distribution channels.

In February 2005, in an interview for The New York Times, George F. Colony, chief executive of Forrester Research, was the first to introduce the term recommerce to answer a question about the increase in spending: "There's a lot of shelf-life issues out there. People are a couple of releases behind. Older PCs. There is a move to really go back to - we call it 'recommerce'. Instead of 'ecommerce', it's 'recommerce'". He said.^[1]

Later, the term was used by Martin Tobias on the news site Xconomy technology in October 2008,^[2] appeared in France in February 2010 in the newspaper Les Echos^[3] and in Germany in 2011 in Deutsche Startup.^[4] In October 2011, Trendwatching, an independent source for Consumer Trends and Insights, published an article presenting the recommerce as a trend for consumers to sell their property as easily as they buy them.^[5]

In March 2011, Fast Company published an article to promote some recommerce initiatives.^[6]

In November 2011, The Boston Globe published an article about recommerce.^[7]

Various private companies compose the recommerce market: Hyla Mobile (US and Europe), Recommerce Solutions (FR), ItsWorthMore.com (US), Gazelle (US), uSell (US), thredUP (US), DataServ Group (DE), Rebuy (DE), musicMagpie (UK), Wirkaufen (DE), Mazuma (UK), Envirofone (UK), Regenersis (UK), WestOne (UK), Redeem (UK), Tipket (UK) , ReGlobe (IN), Teststripz, LLC (US). They provide business-to-business solutions (online or instore) to operators, retailers and manufacturers or business-to-customer websites to final consumers.

How it works

Recommerce allows users to sell a property:

By offering a guaranteed repurchase price to the holder of the product;
By organizing the logistical return of the product. In most cases, logistics costs are supported by the recommercer;
By controlling the product's condition in a specialized workshop;
By reintroducing functional products back in the second hand market;
By recycling waste.

This kind of resale allows sellers to overcome some marketplaces drawbacks, by providing a means of simplified acquisition, and immediate and guaranteed value.

Types of purchased products

Examples of the main assets of companies acquired by recommerce include:

Consumer non-durables: disposable razors, jeans, corks, pantyhose, eyeglasses, watches
Cultural goods: books, CDs, DVDs
Jewelry: gold, silver
Technological devices: cellphones, smartphones, tablet computers, TVs, video game consoles, GPS devices, cameras, video cameras
Clothes & unwanted fashion items and accessories
Over the counter (OTC) medical supplies, particularly Diabetes testing supplies such as glucose test strips and lancets

Many ecommerce services have introduced recommerce solutions, including distributors, online retailers, and chain retailers.

The various marketing positions recommerce

Multiple types of recommerce services are available:

Recommerce, used as a method of funding, which can compensate the seller in cash or with a voucher.
Solidarity recommerce, the return of products by offering its holders an opportunity to share or redistribute the residual value with a non-profit organization or a social cause (e.g., micro-credit, or insertion).
Ecological recommerce, the recycling or proper disposal of products with strong polluting capacity (providing repair or recycling regulatory compliance).

Benefits

Many studies show that the depletion of natural resources is mainly caused by the household consumption, through the processes of manufacturing, transportating, distribution, and use of a product.

The reuse of a product is an effective means of reducing products' environmental footprint.

By leveraging the best practices of e-commerce and the geographical location of outlets, recommerce recreates, online, functions performed locally by second-hand brick-and-mortar shops that have many constraints for the product holder.

The product holder increases its purchasing power to acquire a new product by selling back its old one.

The development factors

Several factors have greatly accelerated the development of recommerce in developed countries, including:

The demand for solutions enabling consumers to separate themselves ethically from their products,
The ease of use of recommerce services, and more importantly,
The preponderance of takeover bids, which handsomely compensate the owners of recommerce services.

In France, the rise of recommerce is partly supported by the "Grenelle II" Law, which states that when they are sold under the brand name of a single dealer, it must "provide or contribute to the collection, removal and treatment of electrical and electronic equipment waste instead of the person who manufactures, imports or brings in the domestic market (...) this equipment regardless of the selling technique, including distance selling and electronic sales".

Issues of recommerce

Recommerce requires a special organization of many functions, such as: logistics management, information systems, customer relations, price control and treatment of the product in the shop, promotion, retention, and resale. Functional products recovered via recommerce solutions are usually put back on the market by the recommercer. Moreover, when this product exceeds local demand, recommercers sometimes turn to foreign markets to sell the products they have purchased. Thus, the recommercer sells some of these used functional products in emerging markets where access to technology and accelerating economic development are reserved for some part of the population.

References

↑ "As I.T. Goes, So Goes Forrester?". The New York Times. February 18, 2005.
↑ Xconomy, Kashless No More: Martin Tobias Raises $5M for New Startup, October 30, 2008 http://www.xconomy.com/seattle/2008/10/30/kashless-no-more-martin-tobias-raises-5m-for-new-startup/
↑ Les Échos, 60 millions de téléphones en quête de recyclage, February 9, 2010, http://archives.lesechos.fr/archives/2010/LesEchos/20611-48-ECH.htm
↑ Deutschland im Recycling-Fieber: Aufstieg der ReCommerce-Plattformen, March 22, 2011 http://www.deutsche-startups.de/?p=43652
↑ Trendwatching.com, "RECOMMERCE" http://trendwatching.com/trends/recommerce/
↑ "How to Get an iPad 2 for $124". Fast Company. March 2, 2011.
↑ "Making ‘re-commerce’ second nature". The Boston Globe. January 7, 2001.