How to Turn Resale Into a Customer Acquisition Channel | #621

The conversation in most ecommerce businesses right now is about which channels to double down on. Meta is getting more expensive. CAC is going up. Every dollar of paid spend aimed at reaching a customer who hasn't found you yet.

But some of those customers have already found you. Through a different door.

Right now someone is buying your jacket secondhand on eBay. Someone is renting your dress through a peer-to-peer platform. Someone is picking up your shoes from a Facebook buy-swap-sell group. For many of those people, that's their first real experience of your brand. That's acquisition. It's just acquisition you're not in.

In this playbook, we cover three things ecommerce operators can take into their business:

• Your secondary market is already running without you
• Secondary buyers aren't defectors. They're the top of your funnel.
• The brand experience of the secondary sale is yours to own or lose
  
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Transcript

Secondhand Becomes Mainstream Shopping

Tracking Resale With Seamlist

SPEAKER_01 0:01

Look, you probably know this already, but customers aren't just Googling products anymore. They're asking AI what to buy. And if AI can't understand your brand, it won't recommend it. That's why Studio Hawk, Australia's largest dedicated SEO and AI search agency, is offering a Descartes Listeners a free SDO and AI search master plan. You'll get an in-depth audit of how your brand appears across search and AI platforms, plus a custom roadmap to improve your visibility. And to help you get started straight away, you can also download their free e-commerce AI visibility toolkit. It's packed with prompts, checklists, wireframes, and a step-by-step digital PR framework. Head to studiohawk.com.au forward slash add to cart. That's studiohawk.com.au forward slash add to cart to download your exclusive toolkit and request a personalized master plan. We'll put the link in the show notes as well. Think about what secondhand shopping used to mean, especially in Australia. Saturday morning at the Salvos or St. Vinny's, walking through the racks, hoping to find something interesting, maybe even clean. Some people loved it, but most people did it occasionally at best. Wasn't fashionable. It was practical. Now that version of secondhand still exists, and it's come a long way. But it's probably not the story anymore. These days, secondhand is cool. It's where a genuine and growing part of your customer base probably wants to shop. Depop, vintage, Facebook Marketplace, the Vault, platforms that haven't just made secondhand more accessible, they've made it the preference for buyers who could easily afford to buy new. The global secondhand apparel market is growing seven times faster than traditional apparel. In Australia, the secondhand market is projected to grow from around$5 billion today to nearly$18 billion by 2031. But here is the problem for retailers. You probably have no idea how much of that activity involves your products. The moment someone sells your jacket on marketplace or rents your dress through a peer-to-peer platform or trades your shoes in a Facebook group, the transaction is invisible to you. The first sale is the last thing that you see from that customer. Everything after that happens without you. That invisibility is a commercial problem because some of those people buying your product secondhand are encountering your brand for the first time. They're forming an opinion of what you make. Some of them are becoming your best future customers, and you're not in the room with them. Bernadette Olivier has spent the last six years building the vault. It's Australia's leading peer-to-peer fashion rental marketplace. She's building a community of more than 5,000 lenders running real businesses from their wardrobes. Alongside that, she's also building Seamlist. This is the infrastructure that sits at the intersection of retail and resale. Retailers who integrate it can track their products all the way through the secondary market, earn royalties every time an item is rented or resold, and actually reach the customers discovering them for the first time. Let's hear it from Bernadette.

Turning Rentals Into New Customers

SPEAKER_00 3:26

I don't think it's important to the customer. So the real value proposition for the customer is save your item and in one click you can list it on eBay, shortly, other platforms. You'll be able to cross these to multiple resale platforms. And when it's sold, it will automatically delist it on the other platforms. So for the customer, it's really about not having to create the listing, not having to create an account, not having to create, get a photo, and being able to really easily sell their item. A lot of the things in our roadmap this year is also about triggers. So letting you know, oh, you bought this Camilla dress, there's huge demand for that on eBay right now. So being able to really incentivize people to say, oh, actually, I don't really wear that. And what is actually amazing, a lot of our Australian brands fetch more on secondary markets than they retail for. And strangely, Brazil. And I was always confused because, you know, even now, my uncle's, you know, 70, and he's like, I just played for a million people in Rio. And like a little bit of thing was like, I love your music, but why? And it turned out that in the 90s, the Brazilian population could get a few counterfeit CDs. And one of them was the Hootie Gurus. And if you think back to the 90s, getting a counterfeit CD was like, it's theft, it's terrible. There was like CD burnings, like it was all, but now looking back, that was distribution. That was the way all these Brazilians now love the Hootie Gurus. Bringing it back to retail is I do think it's the biggest untapped opportunity because most people fall in love with a product through using it or buying it on the secondary market. And they may never ever have bought, say, you know, a Vickin Woods or H dress. And then they buy it on the secondary market and they love it. And then you all of a sudden you start getting these ambassadors. And I think it has been an error to ignore the power of your product and not to see your product as a marketing channel.

SPEAKER_01 5:33

And is that almost an experiential thing? So the audience or the consumers who are renting for an occasion, they're doing it often because they might not be able to afford the off-the-shelf price or see the value in it, especially if you've got a special occasion coming up. But the idea being that, like your Hodo gurus, is that these brands will be able to cash in in five, 10, 15 years as that consumer goes through their life and can afford the more designer brands and it becomes part of their staple. Is that kind of the mindset?

SPEAKER_00 6:04

Yes. I mean, it's even faster than that. We now target everybody who rents an item who's a brand partner. We target them with them with a voucher to turn them into a primary purchaser. And the same on the secondary market. That's something we're rolling out this year. So this is the first time retailers have actually been able to reach these consumers who may need that's their first interaction with your brand. That's smart. So that's turning your product into an acquisition channel.

SPEAKER_01 6:30

Yeah, and how many rentals would you get out of a product?

SPEAKER_00 6:33

I mean, we're lucky in Australia. Our designers make amazing products. Like they're capable of lots of rentals. Like we've had dresses that have been rented 72 times. But then I think about it like it's kind of odd that we think that that's surprising because, you know, vintage clothing, like, how often was that worn? And you know, these are beautifully made occasion wear pieces. They're not jeans. Like people aren't, you know, going to the shops and then I think the other really strong commercial KPI that we've proven in the last six months that I'm so excited about is when our retail partners and we've done, we're about to do a third pilot, when they push resale to their existing audience. Some of this isn't publicly, so I'm just not going to name the names. They say, you're not wearing our brand. Any items that you're not wearing, we encourage you to resell and we reward you with a voucher. And so what that does is it's pushing some a sustainable outcome because you're keeping more goods in circulation for longer. You're unlocking latent consumer spending rather than, say, after pay, which is leveraging future earnings. You're actually leveraging latent assets that people sell, and then you're incentivizing them to come back and spend that capital with you by purchasing something new. And we've done three pilots now, and the results are pretty phenomenal.

Three Retail Lessons From Resale

Community Invite And Wrap

SPEAKER_01 7:56

What Bernadette is describing there isn't nostalgia about her uncle's brand, although that was a really cool story. It's the clearest framing I've heard for why the secondary market is an acquisition channel most retailers are leaving entirely to someone else, and probably people that aren't qualified. Here are three things worth taking back into your business from this conversation. Number one, your secondary market is already running without you. The first thing to accept, and this one sits uncomfortably for most retailers, is that you don't know what happens to most of your products after the first sale. Post-checkout is a black hole. You see a return if it comes back, everything else is gone. But those products, they don't disappear. They go to Facebook buy swap sell groups. They go on Depop, eBay, Vinted. They circulate. And there are people in that secondary market having their first real experience of your brand right now without you knowing. Dean Jones raised this when he was building Glam Corner. The brand Spell had realized their own customers were already running a thriving secondary marketplace in Facebook groups. The secondary economy for their products was huge. The brand just wasn't in it. Go and search your brand name on Depop or Facebook Marketplace right now. Those are your customers. You have no relationship with a single one of them, though. Something to address. Number two, secondary buyers aren't defectors. They're actually at the top of your funnel. The most common reason that retailers stay out of the secondary market is the fear that it cannibalizes primary sales. If your product is available secondhand for half the price, why would anyone buy it new? The data doesn't support that fear, though. When Assembly Label launched their Reworn resale program, the finding that settled the internal debate was this. The majority of secondhand buyers were new to the brand entirely. They're not existing customers who are trading down. New people who weren't in the market for full price assembly label, who found their way in through resale, and who are, over time, likely to become primary buyers. Bernadette's pilots with Seamlist shows the same pattern from the other direction. When retail partners push resale to their existing customers, encouraging them to sell items they're not wearing and rewarding them with a voucher, the spending that gets unlocked is additive. It's turning dormant wardrobe assets into new transactions, not pulling revenue away from new sales. The secondary market isn't taking customers away from your brand. For most of them, it's how they find you in the first place. Number three, the brand experience of the secondary sale is yours to own or lose. This is the part that gets missed even by brands who accept the first two points that I talked about. Say someone buys your$700 jacket on Facebook Marketplace. It arrives in a padded bag with no note, no tag, nothing that ties it back to you, especially the original experience that that first customer had. They don't know the story behind it, they don't end up on your list, they don't hear from you. That customer bought your product, but you don't get the customer. The shift is simpler than most retailers imagine. When Karen Willis Holmes launched their resale platform, giving customers a proper brand channel to sell their pieces. 100 listings went live within the first 20 hours. The pent-up secondary market for their wedding dresses was already enormous. They'd just never give it a front door. And that's what building into this looks like. You make sure that when your product changes hands, there's a brand moment in that exchange, a voucher, a registration, an email, something that turns a discovery into a relationship and a new customer into someone you actually know. Retailers are spending more every year trying to reach new customers through paid channels that are getting noisier and more expensive. Meanwhile, especially in fashion, there's a market growing faster than almost anything in retail where your products are already being discovered by people who'd never have found you otherwise. And most brands have no presence in it at all. This isn't a sustainability argument, although there is one there. It's actually a commercial one. When your product changes hands for the second time, the fifth time, the 20th time, are you there? Or are you handing that acquisition to whoever runs the marketplace? It ends up on. If you're thinking through how resale fits into your acquisition strategy or how other operators are making the call on when and how to get into the secondary market, those conversations are happening right now in the Add to Cart community. You can join for free at adtocart.com.au. That is the playbook for the week. I'll see you next Friday.