The new customer journey
How secondary marketplaces, rentals, and web3 transform the customer journey
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To accelerate adoption of secondary marketplaces, brands need to understand the new customer experience journey. This new customer experience journey combines purchasing paths for the entire new commerce stack (resale, rentals, new items and outlet), and introduces new re-engagement, retention and loyalty loops.
Instead of going to four different destinations - resale, new items, archive and rentals - the new customer journey integrates these fragmented paths.
The benefits for brand-building and business growth are considerable.
Resale market keeps items liquid for longer; an item is in circulation longer and not on landfill. Resale is a way for a brand to expand its offering without the cost associated with new item production. Resale also addresses the issue of product returns (in 2021, $761BN of products were returned by consumers). A combo of new and pre-owned items transform customer decision-making process to include their evaluation of the resale potential of an item before buying it. Resale keeps customers engaged with the brand longer.
In the past three years, resale has grown 21 times faster than traditional retail. Resale market is currently at $25-30BN and is expected to grow 10 to 15 percent annually in the next ten years, according to McKinsey & Company. Much of the market growth comes from aggregators like TheRealReal, Vestiaire Collective, Vinted or eBay that hold a 25-30 percent market share. The trend is visible on social media, where dedicated Instagram resale accounts and TikTok upcycling influencers amassed devoted followings. Some of the popular TikTok thrifters opened their own second-hand physical stores.
Customer journeys are central in how a brand is experienced. They are instrumental in identifying new sources of value for both consumers and the company, and are an important source of competitive advantage, cost cutting, increasing revenue, market share growth and customer satisfaction. For example, it’s known that brands that are in consumers’ initial consideration set have seventy percent greater chance of being purchase than those that show up later in the journey (this is the reason that retailers’ media spend over-indexes on consideration).
With resale, brands’ job is to understand:
a) how to integrate resale, rentals and new product purchases into a single journey, in order to own the entire process and keep customers on the website throughout the extended brand experience;
b) how consumers move through the new integrated journey and what the steps in this journey are; and
c) what are the new retention, engagement, and loyalty loops.
All three elements are explored in detail below, including the chart of the new integrated customer journey.
This analysis, including the new customer journey that charts user paths across first-hand, second-hand, rentals and outlet scenarios, is for paid subscribers. Subscribe to read.