Customer Footfall Analysis
February 12, 2025
The main criticism of the Barnewall model was that it only classified investors into two types. This created an oversimplification. Practitioners of behavioral finance wanted the classification to be more accurate and inclusive. This is the reason why they started creating another psychographic model. This model is called the Bielard, Biel, and Kaiser model, i.e., […]
When a company files for bankruptcy, the interests of many different parties are impacted. This is the reason that bankruptcy cases can be very difficult to conclude. There are a lot of stakeholders involved, and each wants to pursue their own interest at the expense of everyone else. The result is that a tug of […]
We have seen that a perpetuity represents an infinite stream of future cash flows. However, we have also seen that as time passes the value of these cash flows constantly diminishes. $100 may be able to buy us quite a few goods today, but in 50 years time $100 will not be nearly as valuable […]
Corporate finance is one of the most important subjects in the financial domain. It is deep rooted in our daily lives. All of us work in big or small corporations. These corporations raise capital and then deploy this capital for productive purposes. The financial calculations that go behind raising and successfully deploying capital is what […]
Bank runs have been part of the banking industry for a long time. This is an unintended consequence of the fractional reserve banking system which is followed by the banking industry across the globe. Bank runs were common during the 1920s when the Great Depression took place. However, with the passage of time, the banking […]
The retail sector has generally been engaged with buying and selling of new goods. This has been the case across the world, both in the developed nations as well as in developing nations.
However, in recent times, big box retailers have started dealing in second hand goods (often referred to as pre-loved goods). This trend has gained momentum across various product categories such as apparel, electronics, footwear etc.
The market for resale goods in the organized retail sector is already growing at breakneck speed. This speed is likely to increase in the future and the market may double in size within the next five years!
In this article, we will have a look at the rise of the resale segment in the retail sector. We will also have a look at the drivers behind this increased growth.
The rapid growth of the resale segment in the retail industry is being discussed in many big universities such as Wharton and Harvard. This is because research has shown that the resale segment provides a ray of hope for the growth starved retail industry.
Retailing giants such as Apple, Amazon, Lululemon etc have already started adopting the resale model. It is now common for big box departmental stores to have a separate section for pre-owned goods across the United States. There are specialist third party companies which have sprung up in order to help these big box retailers manage the supply chain related to the resale segment.
Buying second hand or used goods was considered to be a taboo in the not-so-distant past. People would prefer buying new products which they could afford instead of buying expensive goods in the resale market. However, this belief has rapidly changed due to the change in the value system of the younger generation. The younger generation has a disproportionate influence on the retail sector.
Some of the factors which are driving this increased growth in the resale segment have been mentioned below:
The threat of climate change as well as the realization of the fact that the earth’s resources are finite has led many youngsters to make a conscious effort to only buy products which are sustainable. Since the resale segment in the retail industry involves reselling and reusing the same products, it can be considered to be eco-friendly. It is for this reason that the resale segment resonates with the young Gen-Z customer who tend to drive sales within the retail industry.
At the same time, salaries continue to remain stagnant in most parts of the world. This means that the Gen-Z customer who is a new entrant in the job market is fashion conscious. However, they do not have the financial means to purchase all the products they want. As a result, some of these customers gravitate towards the resale segment.
Consumers buying resale products tend to flaunt their purchases on social media. They try to project values such as thrift and sustainability to buying resale products. These values are considered by many as being virtues which actually makes the products more desirable for some customers.
The entire retail industry has acknowledged the rise of the resale segment in the retail industry. Since this segment is growing rapidly in an industry which is otherwise characterized by low growth, it is being pursued by an increasing number of retailers. However, some of these forays are not successful because of the issues being faced.
Your email address will not be published. Required fields are marked *