Are you a “circular”?

Oh, we do love our industry lingo. We get a little frisson of excitement when someone on a Zoom call says “BOPIS,” or “omnichannel,” or—is it getting hot in here?—“endless aisle.”

Now Recurate, a two-year-old tech startup that helps brands launch their own resale programs, has a new offering for the lexicon: circulars.

Think of circulars as consumers who have a baggage carousel moving through their closets—purchases of used clothing are on the belt when it goes in, and items to resell to make room for them when it comes out.

• Nearly three out of four (73%) sellers of secondhand items also purchase them.
• Compared with consumers who only buy or only sell used items, these circulars are the youngest (aged 18–40) and the majority have an income of $50,000–$100,000.
• Among circulars, 48% say that they purchase clothing and accessories with the intention of re-selling them down the line.

The survey, from Recurate and social impact agency BBMG, surveyed 1,000 adults in the US and Canada in March.

Circulars logic. “We’re seeing this actually fairly large class of customers that are buying things with the intention of reselling them, and when they’re doing that, they’re thinking differently about the products they’re buying,” Adam Siegel, co-founder and CEO of Recurate, told us. “They want to buy products that are high quality, that last a long time, that have a high resale value.”

But while both sellers and shoppers may be looking for high quality, it’s not the highest-priced items that are selling the most briskly.

• Mid-priced brands—like J.Crew, Lululemon, and Nike—are what most resale shoppers say they “typically” buy (64%) and what sellers “typically” list (55%).
• Fast fashion—like Zara, Gap, and H&M—are the most typically bought or sold, with 40% of resale shoppers and 42% of sellers, while outdoor brands—like REI and Patagonia—are the top choice for 39% of shoppers and 36% of sellers.
• Luxury brands—like Gucci, Chanel, and Supreme—lagged behind all other categories, but still were the most typically bought or sold with 28% of shoppers and 27% of sellers.

Putting the planet…fourth. While the environmental benefits of resale are often cited (and sometimes questioned), when it comes to consumers transacting in the resale market, the planet isn’t going home with the gold…or silver.

• For sellers, the environment came fourth among their reasons, with 15% citing it, behind no longer wearing or using items (23%), cleaning out closets (20%), and making money (18%).
• For buyers, the environment ranked third, with 12% citing it, behind being motivated by the prospect of saving money (22%) and finding “fun” and “unique” items (15%).

Karin Dillie, vice president of partnerships at Recurate, told us that she was “surprised that the reason I like to do resale was No. 1, which is a lower price.” And she said that while sustainability strategies are essential for brands, it’s also important to understand consumer motivation.

“There are a lot of other factors that CEOs are trying to solve for that engage with resale and that to me was like the biggest pullout of this,” Dillie said. “Sustainability is important, but it is not the end-all [and] be-all of resale.”

Shopping for resale strategies. Recurate, which was founded in 2020, raised $14 million in a Series A funding round in May. Among the brands whose resale programs it built are Steve Madden, Mara Hoffman, and Frye.

With third-party marketplaces selling used clothing like eBay, Poshmark, and ThredUp being so popular, Recurate urges brands to open their own resale marketplaces to keep their customers close.

• When brands give sellers an option of either a store credit or a cash balance of lesser value (like $100 store credit vs. $85 cash), they take the store credit 75% of the time, according to Siegel.
• For brands that offer resale items, purchasers add new items to their order 15% of the time, Recurate also found.

And while brands increasingly are launching their own resale programs, including Tommy Hilfiger, which announced Thursday it was partnering on one with ThredUp, most brands have not. But Siegel predicts that a lot more will don their (gently used) bathing suits and take the plunge.

“It wasn’t that long ago that some brands didn’t have e-commerce stores,” Siegel said. “I think re-commerce is going to follow the same trajectory. It’s an inevitability that every brand is going to offer re-commerce just like every brand today offers e-commerce.”