Finance Consumer IKEA the latest brand to tap into booming second-hand market
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IKEA the latest brand to tap into booming second-hand market

IKEA
IKEA has joined other retailers in the second-hand market to keep environmentally conscious shoppers happy. Photo: IKEA
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Ikea Australia launched ‘As-Is Online’ last week, an online shopping platform where customers can reserve second-hand IKEA furniture and homewares returned through the retailer’s Buy Back service, along with discontinued items and ex-showroom displays.

The launch follows similar moves by other Australian retailers to sell their own second-hand stock through new online platforms or partnerships with pre-existing resale companies.

David Jones has a partnership with luxury reseller Blue Spinach, while online retailer The Iconic has a partnership with pre-owned fashion marketplace AirRobe.

When the David Jones deal was announced last year, Blue Spinach co-founder Jane Thompson said most of the stigma around shopping for second-hand items had disappeared over the past 20 years.

“Renew, recycle, reuse and restoration are really just a key part of our thought processes today,” she said.

Key drivers

Consumer demand is driving the trend.

Queensland University of Technology consumer and retail expert Gary Mortimer said the uptick in resale platforms shows retailers are responding to consumer concerns over the volumes of waste being created through the consumption of everything from fashion to furniture.

“The circular economy is becoming a very important point for competition,” Dr Mortimer said.

“As consumers become more concerned about sustainability issues, reusing, recycling [and] upcycling, they’re going to turn to retailers that offer this service.”

A recent Finder report shows more than half of Australians have become more mindful of their environmental impact since the start of the pandemic, with 44 per cent of consumers considering a brand’s green efforts to be ‘very’ or ‘extremely’ important when making a purchasing decision.

The survey coincides with growing awareness of the negative effects of ‘fast fashion’ (clothing produced in high volumes and sold at cheap prices).

Fashion produces more than 92 million tonnes of waste and consumes 1.5 trillion tonnes of water per year.

Fast fashion retailers like Shein and Boohoo have made it cheap and easy to keep up with the latest fashion trends, but their popularity has come at an environmental cost.

Australians acquire an average of 27 kilograms of new clothing, and discard about 23 kilograms of clothing to landfill, per person every year.

University of South Australia PhD candidate Erin Skinner, who is leading a study into Australians’ knowledge of fast and slow fashion, said the industry also produces about 20 per cent of the world’s wastewater, and produces more CO2 emissions than the shipping and aviation industries combined.

“Such phenomenal waste is clearly unsustainable, so it’s vital that the sector educates consumers about alternative options,” she said.

Second hand on the up

The circular economy aims to reduce waste by reusing materials and products whenever possible, and consumers have been taking matters into their own hands by buying and selling items on platforms such as eBay, Facebook Marketplace and Depop, which boasts 30 million users worldwide.

Dr Mortimer said retailers are now jumping on this bandwagon and providing a way for consumers to shop second hand without needing to worry about counterfeit goods or stolen merchandise.

“If I buy something like a handbag or an office chair from a neighbour, and if something goes wrong, can I get my money back?” he said.

“When I’m dealing with a retailer, I can rest assured that the appropriate checks and balances have been taken care of.

“If the product doesn’t work [or] if it fails very quickly, I can return to that retailer and get an exchange or money back.”

 

IKEA
What shopping second hand with IKEA looks like.

Brands enter the fray

Retailers are taking different approaches to joining the circular economy.

IKEA’s As-Is Online platform lets shoppers browse products online at a discount, but requires the purchase to be completed in store.

The Iconic, meanwhile, invites shoppers to register their interest in reselling their items with AirRobe when they first buy them.

AirRobe then saves the details of their purchase so that shoppers can verify their items and resell them on the site in future.

Although more retailers are expected to explore ways to make their businesses more sustainable in future, Dr Mortimer said smaller companies would struggle to introduce similar initiatives due to the higher costs.

“I think consumers need to be aware that there is added cost in providing this particular service,” he said.

“A normal transaction is: I go to IKEA, I buy the product, I take it away.

“Now the transaction is: I bring the product back to IKEA, IKEA then needs to provide staff to check the product. They have to clean the product. They might have to repair the product. They have to repackage the product. They have to price the product, and resell the product.

“It might work for really big global retailers like IKEA … but you may not see a smaller retailer that has very low margins – discount department stores, for example – in this space.”