In 2009, as first-time parents, we had little knowledge of preparing (nesting) for the baby’s arrival. Our sources of information were limited to friends, a handful of blogs, and visiting lots of shops in malls. The default setting in our minds was to shop for everything new.
When our second baby boy arrived in 2017, the shopping landscape changed significantly. Parents (us included) were shopping exclusively online. In addition, there was an openness to purchasing used kids’ and baby products and more avenues to explore and browse used inventory.
What is this blog about?
This blog discusses the foundational change in the shopping behavior of parents from 2010 to the present. The blog then discusses opportunities to build on these changes and their potential impact on Sustainability.
2010’s E-commerce Reboot, The Decade of Change:
Convenience, Selection & Price
The 2010s was a decade of rapid change. The convergence of Technology, Community and the Rise of the Perennials (Millennial Parents) has redefined how parents shop.
I want to highlight the main ones here:
The rise of the Shopifypreneur: From 2010 to 2020, there was a significant advancement in e-commerce, payments, and logistics. The progress is especially apparent with the emergence of Shopify.
The “Shopify effect,” which refers to the impact that Shopify has had on the e-commerce industry, particularly on small and medium-sized businesses, has made it easy for anyone to start an online store, regardless of their technical expertise or budget. Likewise, Shopify has made it easy for startups to create and launch their online stores with low startup costs and a “pay as you grow” model. In addition, Shopify has built a large ecosystem of third-party apps businesses can use to customize their store, automate tasks, and integrate with other services. As a result, the platform has made it easier for entrepreneurs to start their e-commerce and D2C businesses.
Community — Facebook Groups, Instagram Moms: Before 2010, word-of-mouth recommendations were limited to private social groups. These groups included friends, relatives, and the occasional neighborhood groups that catered to local parents.
The launch of Facebook groups changed how parents interacted with each other — the change transitioning from proximity to compatibility.
Visual product discovery enabled Instagram to allow brands to showcase their products with high-quality images and videos. In addition, Mom Influencers can provide authentic product recommendations and showcase the products in use with their children.
With User-generated content, brands can encourage parents to share photos and videos of their children using their products on Instagram. Parents often look for products that stand out from the crowd and reflect their style and values.
Rise of the Perennials: In 2010, 20% of all new babies in the United States were born to Millennial parents. By the end of 2020, this number rose to 72%. In addition, millennials are more likely to shop online and need the convenience and ease of shopping from home or on the go. Furthermore, millennials are more likely to value Sustainability and ethical production when purchasing. Millennials also tend to value personalized experiences and products. As a result, they tend to seek products that align with their values and expect brands to understand their individual preferences.
Offerup, ThreadUp, FB Marketplace, and the Re-commerce reinvention:
The 2010s saw a resurgence of Re-commerce. Online marketplaces like Facebook Marketplace, Poshmark, and Offerup led the charge in redefining the peer-to-peer experience. At the same time, ThreadUp and The Real Real created a hassle-free managed experience. The 2010s also saw the emergence of parent-focused vertical marketplaces like Kidizen and Goodbuy Gear. These marketplaces focused on specific kids’ and baby categories and created options for parents to shop and sell used kids’ products from vertical marketplaces.
Two Paths: One of the drawbacks of Shopify is the homogenization of the shopping experience with limited scope to innovate outside of the Shopify experience. This homogenization has created two very different and often decoupled shopping experiences for e-commerce and re-commerce. This shopping experience pre-supposes the shoppers’ intent and preference of buying new or used and does not offer a one-click experience that presents both options simultaneously. For example, when parents are looking to buy an UppaBaby stroller, they can buy a new one from an authorized online retailer or shop for a used one from a secondhand marketplace. While the former is a more convenient and trusted option, this decoupling creates greater friction in buying used due to an inferior value proposition in convenience and selection. This diminished value proposition mainly attracts price-conscious customers towards re-commerce.
The 2020’s and the Convergence of the Two Paths:
Convenience, Selection, Price & Sustainability
Consumers want convenience and selection at the price they can afford. They also want a sustainable way to shop — all through a unidimensional customer experience.
This change in consumer preference has led to integrating traditional retail models with the resale of used goods. In addition, while E-commerce has seen rapid growth due to the convenience of online shopping, Re-commerce is becoming increasingly popular as consumers seek more sustainable and environmentally friendly consumption patterns.
As a result, many retailers are starting to incorporate Re-commerce into their business models by selling used items alongside new ones or partnering with Re-commerce platforms to offer customers the option to trade in or resell their used items.
These retailers are partnering with startups like Trove, Inc. that have created the technology operations and analytics to enable retailers with a branded Re-commerce channel, thus bringing the option to buy new, used, and returned items on the brands’ website.
One example of such experience is outdoor retailer Patagonia, which has implemented a program called “Worn Wear” in partnership with Trove. It allows customers to buy and sell used Patagonia clothing and repair services to extend the life of their existing garments.
Through integrating e-commerce and Re-commerce, Trove helps these brands recapture additional revenue by tapping into the customer’s sustainability mindset.
The Untapped Parent Mindset:
When I was at Diapers.com, we were obsessed with saving Mom’s time. We prided ourselves on being the “Modern Moms’ Best Friend” — an extension of their mobile device that made shopping for your child easy and convenient. This mindset was reminiscent of the 2010s, with a high focus on buying new.
Today parents’ shopping decisions are influenced based on their needs, preferences, and values and include a mix of both used and new purchases.
Two factors influenced the growth Re-commerce of kids’ and baby products — 1) a value-conscious and sustainability-focused mindset in parents, 2) and convenient ways to shop and sell used items. These two factors led to a 10X+ increase in the sale of used products, up from less than $1 billion in 2010 to $7 billion in 2021. Simultaneously, new kids and baby product sales reached $143 billion in 2021. As a result, today, sales of used kids’ items make up ~5% of total sales, compared to 11% in fashion. However, while impressive, the resale adoption of kids and baby products still lags in pace. Especially given that most kids’ and baby items outgrow fast while still in good condition. An estimated 272.6 million unused kids and baby items are in US households.
However, to unlock the full potential in this space, E-commerce, and Re-commerce will need to converge. This convergence will realign the three key value props of e-commerce, Price, Convenience & Selection, adding a fourth value prop, Sustainability, and merge them into a single user experience.
For brands, having used and new on the same platform unlocks a new stream of revenues and brings recognition as a circular thinking brand.
How to to think about the convergence between New & Used:
At Markid, we think about this convergence from the brands’ and consumers’ points of view.
It’s essential to provide parents with a solution that offers them a sum-total of the choices out there- to buy new, buy used, or rent as well as the ability to sell things back when they no longer need them.
Unlike fashion resale, which has the potential to sell and re-engage customers with new offerings from the same brand, parents have a one-and-done approach to their shopping needs. For example, they will purchase a stroller from Bugaboo or a bassinet once from Snoo. In addition, they make purchases based on their kids’ developmental needs- so they may choose to buy a highchair or a bicycle as their needs change. They will therefore benefit from having a marketplace that aggregates those offerings and gives them a choice to shop what they want (based on their needs & wallet) and the flexibility to sell items back when they no longer need the product — all in one place.
Our hub and spoke circular model enables brands and parents to easily access and participate in Re-commerce.
Our tech enablement provides an easy on-ramp for brands and retailers to participate in the secondary market for their products. Our proprietary plug-and-play solution allows brands an asset-light way to integrate their offerings into our platform -
The hub and spoke model allows Markid to aggregate selections across product verticals. Bringing brands to participate in Re-commerce is critical to achieving true circularity.
