By Usman Raza
No industry is complete without competition, and competition is running high in re-commerce industry. Companies getting hold of funds are likely to stay relevant and more competitive than their rivals. Vestiaire Collection is one such name that is making huge inroads in the market. For one reason or another, you’ll likely see Vestiaire dictating terms with their unique business model.
Back in 2012, Vestiaire Collective had several competitors in the market. It turns out that now, they have about 10, so the challenge is there for the taking. With competitors like Tradsey and The RealReal in the recommerce market, the competition is going all the down to the wire. Contrary to what some believe, having fewer quality competitors make for a competitive market. Here is more on how Vestiaire Collective are evolving as a resale business startup against the competition:
The Beginning & Business Model
Vestiaire Collective was founded in 2009. The company has maintained a unique hybrid business model since its inception. It is this model that differentiates it from its competitors. It was designed as a peer-to-peer business model from the start. Vestiaire model allows the seller to post their items and put their prices. When compared to the RealReal, this business model is vastly different. The latter uses a consignment model that includes the photo of the product, and the seller needs to market it too. It is a great design as it takes the guesswork out of the equation. The buyer sees the photo, reads the description and decides whether or not to buy the product. On the other hand, Vestiaire provides sellers with photoshop imagery of the product against white backgrounds. This allows the buyer to see what the actual product looks like. The biggest difference comes when the seller needs to send the product to Vestiaire facility for authentication and reliability. Once done, these items are then delivered to their buyers.
Getting Ready for Competition
The Vestiaire has its lineage in the Vitruvian, a European private equity firm also having stakes in the Farfetch fashion platform. The company has raised approximately $62 million in funds as a part of Series E round. For raising funds, the Vitruvian Partners took investors Idinvest and Eurazeo onboard. This made Vestiaire the largest marketplace in Europe for used luxury clothing by quite a margin. As a recommerce startup, the Vestiaire is taking steps in the right direction. Thanks to the Vitruvian platform, the company can take shares from relatively inefficient legacy models. With over $125 million raised in funds, it also includes participation from investors like Ventech, Voltaire and Conde Nast International.
Expanding to Other Markets
Apparently, the recent inflow of capital was to facilitate its reach to other markets in the region. For instance, the company is planning to expand its business operations to Asia Pacific region and is looking to acquire new customers in the market. Markets in this region offer a great growth opportunity as a significant chunk of the world population lives in this part of the world. It would be a grand move on the part of Vestiaire as the company has never moved its business operations outside Europe. As such, the company feels the need to invest in logistics more than ever. Naturally, opening to more countries means that you must keep the global marketplace fueled with supplies.
Discounts Play as Secondary Force for Quick Sales
As Vestiaire is gearing towards expanding its recommerce business to parts of Asia Pacific, they are working on different schemes to spread awareness. They start providing discounts & coupon codes along with various free shipping deals, by partnering with platforms like ClothingRIC to roll out up to 60% off in discounts. These coupons provide customers incentives like discounts and lucrative offers on different designer products. For instance, with a 40% discount, customer gets a $100 coat at just $60! Now that’s a bargain that everyone will be willing to take any day right? After all, who wants to miss out on the opportunity to own designer brand product? Vestiaire ensures that all their delivered products meet quality criteria checks.
Communities Trust Peers More Than Marketers
You can say that the e-commerce is changed buying and selling trends all over the world. Now with recommerce, things are about to get even more exciting. You may have seen just how smart shoppers would take the word of a peer over a marketer anytime? In fact, the recommerce market will increase the worth of your peer’s name more than ever.
To make the most out of this community, Vestiaire Collective is sorted out an elaborate strategy. By providing awareness on what products are in and what not, the company is looking to win the confidence of sellers. For instance, in 2016, the seller community already had 6 million sellers worldwide, and 170,000 more being added each year. These people interact about a product and make queries about its pros and cons. In other words, they don’t listen to marketing; rather they give more value to their peers.
The Rise of Recommerce
It is astonishing just how quickly the recommerce market is rising. More buyers and sellers are stepping into this market segment each day. The retail sector is witnessing the situation with caution. After all, seeing a new market segment emerge and gain momentum will worry them, and it has. Despite the fact that the recommerce market targets a different customer segment, it is just as fashion savvy and style conscious as the retail industry. Vestiaire is taking the right approach, and all they need now is to stick to the basics of the recommerce market for a while. This market segment promises a lot of potentials and considering how it is causing a stir in other market segments; it has a bright future ahead.
Despite all, Vestiaire also needs to keep an eye on its traditional recommerce rivals. A slight mistake can cause them dearly, so they need a two-prong business approach to maintain their relevance in the recommerce market.
Usman Raza is a marketing specialist at Crawford and O’Brien. Aside from doing dental SEO and helping dentists get new patients, when not working there is a 99% chance he is praying with his family. Follow him on Facebook @usmanraza40 and Twitter @usmanintrotech.