The resale world is paying close attention to emerging technologies

Resale is one of the hottest trends in retail: It’s beloved by Gen Z, is being rapidly adopted by brands, and is experiencing massive growth, including in sectors beyond fashion.

But the excitement has also highlighted unique challenges, including authentication, inventory quality, and consumer experience.

To address some of those challenges, resale is turning to many of the same emerging technologies that are taking primary sales by storm.

We talked to leaders on both the peer-to-peer and branded resale sides of the industry, and these are the technologies they say have the biggest potential to transform their work.

Natural language processing

Like everyone else, resale experts are closely watching developments in AI. One branch they’re particularly interested in is natural language processing, which involves understanding and generating human language (and which is the powerhouse behind chatbots, including ChatGPT).

Ken Murphy, SVP of product at OfferUp, said the platform has its eyes on NLP to make the peer-to-peer sales process even smoother.

“Things like ChatGPT offer tremendous opportunities for us to make it really easy for a seller to automatically generate a fantastic description of their item,” Murphy said.

NLP is particularly useful for marketplaces, where sales depend on a huge amount of human language in the form of a chat to answer questions about price, color, and size, among other things.

“We believe there’s a remarkable opportunity for us to start to combine things like NLP and image recognition technologies, where we can start to answer those questions for you,” Murphy said.

Computer vision

Murphy isn’t the only one interested in image recognition, another branch of AI that focuses on interpreting visual data, including from photos, videos, and even live feeds like in-store cameras for autonomous checkout.

“We expect AI to have a transformational effect on our marketplace over time,” Depop CTO and product officer Rafe Colburn said via email.

Visual AI can improve the resale shopping experience by increasing listing quality, he said. “Hopefully in the future, people will be able to upload flat photos of clothing and we’ll be able to turn them into photos on a model.”

Vered Levy-Ron, CEO of product discovery platform Syte, said visual AI is also improving discoverability and overall customer experience.

“There’s something about hunting for your item that is very satisfying when you’re shopping in a real store,” she explained. “Visual AI really helps you have that thrifting experience.”

Jake Disraeli, CEO and co-founder of branded resale platform,Treet, said AI can also help promote loyalty.

“We talk about resale as…creating a very real and meaningful way to re-engage your customers in a post-purchase journey,” he said. In the future, AI will provide brands with insights such as which items are resold most frequently, he noted.

Web3

Disraeli is also excited about Web3’s potential to transform the authentication process. “There’s AI tech we’ve looked at for authenticating items based on an image, but what we are most excited about with authentication is where it overlaps with Web3, like digital twinning,” he said.

Blockchain-based digital twins (virtual but accurate representations of physical goods) can be used to track ownership and other details across a product’s lifespan, and remove friction in resale. But Disraeli said that widespread use of digital twins likely needs to be a brand-led initiative. If brands include some kind of digital ID into their goods at inception, Treet can enable resale and secondary market tracking, he explained. “But we’re not in charge necessarily the first time around.”

Karin Dillie, VP of partnerships at Recurate, a resale platform for brands, said that in addition to authentication and traceability, digital twins could help encourage buyers to also become sellers, and bridge physical and digital to engage consumers.

Dillie is keeping an eye on the concept of “digital closets”—virtual collections representing clothes you own physically—which she said would allow people to see what they have and any resale value, and inspire them to engage in circularity.

She’s also watching the growth in a closely connected space: mixed reality and the metaverse.

“We see it as physical items giving you some sort of ticket or admission to an online experience,” Dillie said, pointing to potential crossovers between digital twins and virtual realities.

Digital experiences might not have taken off in popularity, but Dillie said that when combined with other emerging technologies, they can help brands and platforms meet the needs of younger consumers who want to engage in shopping in a circular way.

“[Gen Z] buy[s] with the intention of selling, and all of this technology is to make it easier to do the behavior they already want to do,” she said. “That is ultimately what the future of resale is— how do we make it easier to buy and sell and to buy high-quality products?”