The Rise of Recommerce: Navigating Inventory Challenges in a Softening Retail Landscape

While the world watches and waits to see how the Trump administration will roll out and enact higher tariffs, the retail industry has been working overtime to prepare. The National Retail Federation (NRF) recently announced that they anticipate U.S. port levels to remain elevated for the next few months as retailers continue to frontload inventory amidst continued tariff pressure. This strategy, while not new, has become increasingly prominent due to several global challenges.

Retailers have been pulling cargo forward not only in anticipation of potential tariffs but also due to a crisis in the Red Sea, labor unrest at East and Gulf Coast ports, and drought issues at the Panama Canal. This frontloading now also coincides with softening consumer spending, creating a favorable environment for the secondary market.

Consumer Spending Trends

Despite consumer spending reaching an all-time high of $16,278.50 Billion in the fourth quarter of 2024, experts are now seeing signs of weakening demand. Retailers and consumer-facing businesses have reported softer-than-expected first-quarter sales. February consumer confidence saw the biggest drop since 2021, stemming from worries about a slowing economy, tariffs, and rising inflation.

However, the decline in the primary market may signal positive opportunities in the secondary market. Take, for example, some of the leading off-price retailers that traditionally benefit from uncertainty happening in the primary retail market. As consumers look for more affordable options, the off-price space has continued to benefit, gaining market share from retail store closures and the current weakness in the department store sector. Beyond discount stores though, studies show more and more shoppers are turning to resale to save money on gently used and/or refurbished items.

The Rise of Recommerce

The resale market is experiencing significant growth: it’s expected to grow 55% by 2029, reaching $291.6 billion and outpacing the overall retail market. When looking at specific categories, the secondhand apparel market takes the top spot: it grew five times faster than the broader retail clothing market in 2024 and is projected to reach $74 billion by 2029, with an average annual growth rate of 9%.

Behind apparel, the top resale categories include:

• Books
• Shoes
• Home & Garden
• Tech/Electronics

What’s more, a recent study shows over 70% of global consumers plan to spend on resale this year citing the increased cost of living, cost savings, and the availability of high-quality secondhand goods. The popularity of resale may also provide a buffer against ongoing tariff threats. As Alon Rotem, Chief Strategy Officer at ThredUp, noted, “With resale, you’re effectively domesticating the supply chain. All of the clothing comes from the closets of Americans.”

Managing Surplus Inventory

As retailers continue to frontload inventory to get ahead of potential tariffs, they risk accumulating excess stock if consumer spending continues to tighten. This situation underscores the need for effective inventory management strategies. Returns and excess inventory amounted to nearly $1 trillion for retailers in 2023, highlighting the massive financial impact of excess inventory. For merchandise that can’t be resold through primary channels, secondary market solutions are critical.

A B2B Resale Platform: A Solution for Excess Inventory

There is a robust secondary market and buyer base for returned and unsold merchandise of all categories, quantities, and conditions. B-Stock’s B2B recommerce platform offers a centralized hub for secondary market resale needs, facilitating transactions between retailers and brands and a global network of vetted business buyers.

B-Stock’s platform offers multiple channels to sell inventory while providing a single system of record, streamlining the historically fragmented and manual process of managing excess inventory. Leveraging data-driven insights and technology-based solutions, retailers can optimize their inventory management, reduce losses, and ensure consistent demand and fair market value for their returned, excess, and overstock inventory.