Why second life must be a first priority for carriers and posts

LinkedIn +

According to Cross-Border Commerce Europe, the recommerce market is growing 20 times faster than the broader retail market – in 2021, it was valued at €75bn (US$80bn) and is expected to grow to a massive €120bn (US$128bn) by 2025. Terms such as recommerce, second life and the circular economy are becoming increasingly prominent as smart e-tailers see the opportunity to leverage increased awareness of green issues while dealing with the effects of the current economic downturn on traditional sales. 

Although eBay is the largest seller of second-life items, I would argue that it’s Vinted, which has a growing community of more than 65,000,000 members and currently operates in 16 countries, that is one of the biggest movers and shakers in this space.

So, what has been the secret of Vinted’s success? A successful last mile is the critical ingredient for e-commerce and what makes it different to traditional bricks and mortar. The issue for recommerce is that a very special type of last mile is needed given the low item cost and its consumer-to-consumer (C2C) nature. 

I would argue that eBay has been slow to leverage last-mile opportunities, letting Amazon (Amazon Logistics) and Alibaba (Cainiao) take the lead. Furthermore, its early forays into this space with the 2013 acquisition of Shutl were not a great success. Some local initiatives with carriers such as FedEx and Australia Post have worked well, but the much smaller Lithuanian challenger Vinted has developed a strong, low-cost proposition via carriers and posts and is now upping the ante by offering its own out-of-home (OOH) last mile via its Vinted Go lockers. What is different from other last-mile initiatives is the speed at which the lockers have developed: concept to implementation has taken less than a year.

But is the circular economy really such a big deal for carriers and posts? Several of my postal colleagues have stated that Vinted is one of the fastest-growing, most important accounts, but that it is one of the most difficult and price-sensitive ones as well. And here’s the rub: second life cannot be profitably offered without an efficient and accessible OOH network. 

This is not rocket science, if you assume that the average item value is probably just a few dollars and that transportation costs must be super-low to make profitable delivery feasible. As a dense OOH network enables the seller to make the first-mile delivery to the locker and the consignee to make the last-mile collection, incredible savings can be made, potentially leading to a total cost of under US$1. Add to this the ease of returns and potential to develop PUDOs or lockers to be points of exchange without any associated carrier transportation costs, and this becomes really quite interesting.

The problem for posts and carriers is that if they don’t offer this capability soon, the second-life commerce players will develop their own logistics arms, just like Amazon did, taking customers from postal/carrier access points and potentially developing competitive infrastructures. The good news is that this is still some way off, but unless action is taken soon, we may see some spectacular developments outside the traditional last mile.

This article was originally published in the March 2023 issue of Parcel and Postal Technology International magazine

Share this story:

Comments are closed.