Consumers are already embracing the resale economy, and they’re hungry for professional experiences from retailers and brands.

That’s the upshot of a slew of recent consumer studies from the Wharton School of Business in tandem with research firm First Insight. The studies found that consumers are far ahead of retailers when it comes to prioritizing sustainability and resale – which means that now is the time for retailers and brands to capture the lead in pioneering this revolutionary new approach to commerce.

In the context of the circular economy, resale or recommerce is the practice of selling second-hand (or “open-box”) goods. Recommerce can take many forms:

• Traditional thrift stores offering donated used items for sale Peer-to-peer online marketplaces such as eBay, Facebook Marketplace, or Poshmark, where consumers can both sell and buy used goods directly with others
• ThredUp and other resale retail sites, which curate a selection of used items and manage the purchase and fulfillment process, paying sellers a percentage of the proceeds
• Branded recommerce sites that offer open-box and returned merchandise, floor samples, and other lightly-used goods, with the entire resale process owned by the manufacturer or retail brand.

As consumers increasingly prioritize sustainability, recommerce in all its forms is booming. Fully 92 percent of U.S. consumers reported buying resale items in a 2021 FloorFound survey. The appeal of recommerce isn’t limited to young bargain hunters: First Insight and the Wharton School found that 81 percent of Baby Boomers over 55 have shopped resale, along with 85 percent of Gen X, Millennial, and Gen Z consumers.

With such broad consumer support, it’s no wonder that U.S. resale is set to grow more than 150 percent to top $330 billion by 2030, according to Mercari and GlobalData.

Given the size of the opportunity, retailers have been surprisingly slow to capitalize on demand for resale – in part because they underestimate consumers’ commitment to sustainability. For example, while two-thirds of consumers say they’d pay a premium for sustainable products, only a third of retail executives believe consumers are willing to do so, according to First Insight and Wharton. Retail executives also underestimate the importance of sustainability to consumers by a 21-point margin.

Because they underestimate the importance of sustainability, half of retail executives believe the appeal of recommerce lies in lower prices, compared with just 27 percent of consumers. In fact, environmental concerns spur 54 percent of consumers to shop resale.

This gap between consumer priorities and retailer assumptions represents an opportunity for companies to play a bigger role.

Consumers already use resale sites operated by retailers or manufacturers, with 41 percent saying they shop branded recommerce as a sustainable option – but just 8 percent of retail executives are aware of this behavior, according to the First Insight/Wharton research. By contrast, retail executives overestimate usage of peer-to-peer marketplaces like eBay and Craigslist by seven percentage points.

Overall, consumers widely prefer to shop third-party and brand-operated resale and recommerce, with 65 percent of total respondents preferring these options over rentals, subscription boxes, peer-to-peer marketplaces, and clothing swaps. This strong preference may be due to consumer demand for professional customer service and delivery options: 89 percent of respondents in FloorFound’s survey said they want the shopping experience, delivery, and customer support for resale goods offered by brands to be on a par with new item purchases.

Not only do consumers want to buy from branded recommerce sites; they also want to participate in the circular economy, with 88 percent of FloorFound survey respondents saying they’re interested in returning used items in exchange for a credit on future purchases.

Once again, retail executives are currently missing this opportunity: 91 percent believe that consumers selling used goods want payment in cash, and just nine percent think sellers would accept a discount on purchases. In reality, a broader range of payment arrangements are potentially viable: while 55 percent of consumers prefer cash, 45 percent are willing to accept alternatives.