The new norm in economic models?
One of the driving forces behind alternative commerce is the shift in consumer behaviour towards more genuine and deeper connections. A new class of sellers has emerged, ranging from family members to complete strangers. Imaging sharing your car with a neighbour via the GetAround app. Four sub-trends contribute to the rise of new sellers in alt-commerce:
Expansion of the second-hand market and the circular economy
Leading outdoor lifestyle retailers like REI and Patagonia have paved the way for a turning point where reuse is becoming a conventional way of life. In the clothing sector, the global resale market is expected to grow 16x faster than traditional retail clothing by 2026 and this trend is happening in all regions of the world.
Driven by all generations, especially younger consumers, this change is a culture shift. According to a Worldline survey of over 300 consumers in the EU and USA. 66% of consumers are more willing to buy second-hand products now than 5 years ago. This shift is accelerated by the urgency to protect our planet, encouraging people to reduce their consumption and waste, in addition to economic pressure. Hence, the recent surge of platforms such as Vinted or Facebook Marketplace, where regular consumers resell items to each other.
Sharing and renting instead of owning
Consumers are increasingly moving away from ownership and embracing renting, sharing, and subscription-based models. This shift is being driven by the attitudes of younger generations, who are leading the adoption of the sharing economy. Owning something is no longer seen as socially important as it once was. According to the aforementioned research, Gen Z consumers are more inclined to rent and share, especially clothes and sports equipment. This shift in consumer behaviour has given rise to a multitude of new businesses and platforms such as By Rotation (a UK-based P2P clothing rental platform) or Peerby (a tool-sharing app in The Netherlands). Even Decathlon has started a sports equipment subscription service.
The community group-buying models
Initially popularised in China, this new landscape is now emerging worldwide. Led by firms like Pingduoduo, this price-led model allows consumers to place orders in groups to get better deals, often directly from manufacturers. The COVID-19 lockdown in Shanghai highlighted a surge of self-organised consumers community groups that pooled their resources to purchase food and other products to overcome supply shortages.
Today, similar local/community group-buying models are emerging in Europe. These include group-buyingwith neighbours for items like washing machines, cars, or even gardening tools. We can’t predict yet how it will evolve, but it is definitely an interesting area to watch.
Directly connecting creators and makers
The connection between creators and consumers is growing rapidly, with millions of creators now monetizing their activities through platforms like Etsy, YouTube, Patreon, and Twitch. The creator economy, estimated to consist of 50 million creators, spans various fields, including podcasters, videographers, artists, and athletes..
The monetization methods for creators vary widely. They range from selling hand-made goods on Etsy to generating revenue through advertising on YouTube or or being paid by fans directly via emerging platforms.
Consumers seek genuine, authentic, and interesting content. According to our market research, more than a third of people considered themselves creators, meaning they have all been sellers at some point.
Opportunities for merchants
Today, marketplaces and platforms are capitalizing on these emerging trends, catering to the evolving needs of consumers and facilitating C2C transactions. Vinted, eBay, Leboncoin, and Back Market, for instance, are based on this concept.
Some traditional retailers and brands may view alt-commerce as a threat, but it actually represents opportunities: For instance, Isabel Marant, a French clothing company successfully added a white-label marketplace solution to their website with the support of a resale tech company like Faume. Hence, brands must proactively adapt their business model to today’s consumers to maintain or, ideally, grow their market share.
Furthermore, this paradigm shift requires new payment-related features, as the pay-xperience plays an important part in this new experience. It must accommodate transactions between individual sellers of second-hand goods, conduct one-off Know Your Customer (KYC) verification for non-business sellers; facilitate deposits and refunds, and enable recurring payments for rental and subscription services.. Ensuring a smooth and secure payment process is essential to establish trust and boost user satisfaction in this novel consumer experience.
About Olivia Viniss
