New research from Barclaycard Payments has revealed retailers are introducing more sustainable ways to buy and sell products and services, amidst pressure from consumers to shop more consciously and reduce their discretionary spending as living costs increase.
Barclaycard Payments, which processes £1 in every £3 spent on credit and debit cards in the UK, found seven in 10 (71%) of the businesses surveyed now offer recycling, renting, reusing or reselling shopping options. Over a third (36%) have introduced more sustainable ways to shop in the last 12 months, and 89% plan to expand their options in response to growing demand for more affordable and environmentally friendly shopping alternatives.
A third of retailers (32%) agree that the rapid expansion of recommerce has been driven by the growth in environmental awareness and the impact of the rising cost of living on consumer spending behaviour. Close to four in 10 said they have introduced more sustainable ways to shop to provide customers with more affordable options, with 44% doing so to reduce their own impact on the environment.
The rise of rent and resell
As shoppers look to rent items that they would have in the past purchased new, retailers are responding at pace. While, two in five UK retailers now have a rental model in place, of which 61% launched in the last year alone, while a further 23% are considering setting one up. Encouragingly, of those that have introduced a rental model in the last year, nine in 10 have benefited from an increase in revenue. The majority (89%) have also seen their rental customer base grow, at an average increase of 31%.
In an effort to provide an alternative to traditional online reselling platforms, 39% of retailers now have their own reselling option in place, enabling customers to buy and sell second-hand items. Responding to the increasing demand from shoppers, almost a quarter (23%) of retailers offering reselling options have introduced them in the past year, while a further 26% are considering setting one up in the coming months.
The study found clothing items are the most common products available to buy pre-loved from retailers, while jewellery is the most popular rented item.
Serial returners trend begins to retreat
In a move away from the ‘serial returner’ trend that boomed during lockdown – where shoppers sent back large proportions of their purchases – 56% of retailers have reported a drop in return rates in the past year, with the number of items returned down 14% compared to 12 months ago.
Over a third of retailers (34%) attribute this shift to consumers making more mindful purchasing decisions. Other reasons cited include buying less overall owing to the rising cost of living (26%), making more environmentally friendly choices (23%), and the increasing use of reselling platforms for unwanted products that are not returned to store (23%).
Counting down to a conscious Christmas
Half of retailers (48%) expect Brits to be more mindful about their spending this Christmas as the cost of living impacts consumer spending, and recommerce continues to grow.
Furthermore, four in 10 retailers predict Christmas shopping will start earlier as Brits aim to spread costs, while 42% believe shoppers will opt for less expensive presents. A further 23% also expect more gifts to be purchased second-hand this year.
In response, 26% of retailers are looking at ways to offer customers more suitable ways to shop – such as by selling second-hand product lines – while 15% plan to introduce a ‘gift swap’ service enabling customers to exchange unwanted presents from loved ones.
Linda Weston, managing director at Barclaycard Payments, said: “The recommerce economy continues to grow as retailers make sustainable ways to shop available to customers. Whether launching rental models to drive new streams of income, offering reselling services in-store, or by increasing second-hand or pre-loved product lines, our data shows how offering alternatives to buying new can increase a business’ customer base and revenue.
“The ability to launch new sustainable shopping options at pace, and under challenging circumstances, demonstrates how agile British retailers continue to be. It’s the businesses who diversify and adapt to the shifts in consumer demands that will be best placed to thrive, especially as the cost-of-living impacts consumer spending and the world becomes more environmentally conscious. At Barclaycard Payments, we work closely with retailers to provide tailored payment capabilities as they expand into new lines of revenue, ensuring their customers have frictionless access to alternative, cost-effective ways to shop.”