If ever there was a term suited to the times we live in, then surely “thrifting” is it. A recent report published by SAS highlighted the challenges retailers are currently facing. Consumers across the board are looking to cut back on non-essential spending. In fact, the survey found that 95% of respondents were more cost conscious than they were in 2021. They planned to spend less overall, as energy and other household essentials took precedence over gifts and socialising.
Some may see thrifting as another inexorable trend that will place pressure on the economic viability of mainstream retail. Retailers must start looking for opportunities within the thrifting movement and tailor the experience they are able to offer.
What has thrifting got to do with mainstream retail?
If you’re not familiar with the term “thrifting” you’re not alone – it’s a new thing. Some definitions restrict the term to second-hand shopping, charity shops, flea markets and buying vintage or up-cycled items.
However, this seems too product-centric. Thrifting also covers behaviours and attitudes such as the reduction of waste which have directly informed many buying decisions. This is very much on-trend given the environmental damage caused by throw-away culture – like fast fashion and single-use plastics.
The survey also found that while pricing was a key driver for consumers in the run-up to Christmas, three quarters would also take sustainability into account. Whether or not this means they are happy to pay more for something that’s sustainable remains to be seen. But retailers should be aware of this attitude shift.
In fact, the excess we have traditionally seen throughout November and December seems out of kilter with consumer sentiment today. We’ve become used to seeing shelves piled with novelty Christmas gifts, made from and packaged in single-use plastic, that nobody wants or needs. Many of these end up in the bin, being sent to charity shops or broken before the festive season is even over. A change in consumer priorities towards more sustainable options might prompt retailers to move away from ‘stack it high, sell it cheap’ tactics. This will be in favour of more considered shopping with a new focus on better-quality and longer-lasting products.
Longer-term, it may also mean that retailers have to rethink their supply chains, perhaps deciding to embrace the second-hand movement and re-design their category approach altogether.
The rise of thrifting
When customers are looking to cut back on spending, as many currently are, they will consider all readily available options. They might diligently compare the offers and promotions on new products with what’s available pre-owned, online and when visiting stores. Thrifting is, therefore, an omni-channel customer behaviour that has emerged, and one that won’t go away.
When times are tough, customers need to feel they’re getting value-for-money and that their loyalty is appreciated. As retailers look to capitalise on this trend and build customer loyalty with their brand, some could introduce ‘swap shops’ for unwanted items. These events would do more than simply draw people into a store and off-set the cost of returns. They would also create an opportunity to up-sell a product the consumer actually wanted.
How data and analytics can help retailers embrace thrifting
There’s no question that every retailer today needs to be able to understand, adapt and predict consumer behaviour using real-time data analysis. With these insights, they can segment customers more accurately, and develop promotion and merchandising strategies that drive sales and maximise margins.
However, it’s reasonable to assume that many retailers aren’t analysing or tracking customer behaviours that may identify the thrifting phenomenon. Yes, many will track category spend fluctuations. But have they turned the telescope around and analysed longitudinal customer shopping histories to look for behavioural trends?
By analysing their data, retailers can understand more about customers and understand if they could do anything differently. This will require AI-enabled decisioning and processing. Armed with this insight, retailers can also take a different approach to the returns process. Returns are often viewed wholly negatively – an annoyance and cost, a negative customer experience, or responsible for an atmosphere of suspicion of being a ‘bad’ customer.
Rather than being a necessary evil of doing business, how about working the “avoiding waste” aspect of thrifting to your advantage? Use it as a way to build loyalty with the increasingly cost-conscious consumers driving today’s market.