Shopping habits are changing; consumers are increasingly opting to buy or rent used items rather than purchasing brand new.

Digital marketplaces are making this easier and easier, with 80% of refurbished goods now purchased online.

The trend is only set to grow, with 44% of people stating they’re buying more second-hand items and Barclaycard Payments estimating that recommerce already contributes £7bn to the UK economy annually. It’s driven in particular by younger generations, with over two-thirds of Gen-Z preferring to buy second-hand. Meanwhile, Selfridges is aiming for almost half of its interactions with customers to be based on resale, repair, rental or refills by 2030.

Economic and environmental drivers

So, why is this happening?

Well, with increases in the cost of living, it’s no surprise that customers are paying closer attention to the price of products. Finding preloved items that would otherwise be financially inaccessible is an attractive prospect when budgets are tight.

But it’s not just about price; environmental impact is a key factor too. Two-thirds of consumers now look at the environmental credentials of a brand when purchasing an item. Almost three quarters of those evaluate not only the products, but also factors such as deliveries and returns. Sustainability is a key influence on the upsurge of re-commerce.

Boosting the refurbished tech sector

The rapid rise of re-commerce has highlighted a growing trend in consumers choosing refurbished electronics. Refurbished tech is a big business, and it’s growing quickly.

Almost two-thirds (64%) of UK consumers have previously bought a refurbished or repaired electrical item.  Despite the popularity of pre-loved clothes, twice as many people would buy a used washing machine or fridge over second-hand clothing items.

Customers are drawn by the cost savings, with many items that are as good as new selling for up to 50% off RRP. The environmental benefits are another big draw, with refurbished electronics standing out for their attractive circular economy appeal.

This points to an exciting new opportunity for retailers to increase revenue streams while also boosting their environmental credentials, but there’s much more that can be done to help this market reach its potential. Which is something we’re looking at here at fulfilmentcrowd.

The refurbishment roundabout

For example, there are some fundamental challenges in the traditional refurbishment process. Sending products for repair and then for resale creates logistical and ecological burdens.

In the existing model, when consumers encounter issues with their purchases, the items are sent back to the local fulfilment centre responsible for the initial logistics. These products are then transported back to their original manufacturing locations to diagnose and fix the problem. These locations are often thousands of miles away, such as in China.

Following repair, these refurbished items are then shipped all the way back to their original destination market for resale – significantly increasing the item’s carbon footprint.

With a typical return rate of more than 10% for consumer tech in the UK – and around a quarter of those due to faults – each retailer is potentially having to navigate thousands of products taking this inefficient and environmentally detrimental round-trip.

Challenging the status quo with a localised approach

To tackle these challenges, we’ve created a new service that enables issues to be resolved, and items to be returned to the market as refurbs, all without ever leaving the intended destination of sale.

To do this, we’re establishing a network of regional returns centres, initially in the US, UK, and EU (Germany), where returned items are thoroughly assessed, tested, and refurbished by locally employed experts.

It’s a complete end-to-end process, from the logistics of returns to diagnostics and repair (which is managed by our skilled team using detailed guidelines provided by the manufacturers), through to the re-introduction of refurbished items on the resale market.

This ensures a more sustainable and efficient resolution for returned products, benefitting our customers, their customers, and the environment.

Conclusion

Retail is a sector continuously in a state of evolution. In an age where there are growing ethical and environmental concerns around the business models of the likes of Temu and Shein, the more we can do to support more sustainable purchasing habits, the better, particularly if it also helps retailers to increase efficiency and diversify their offerings to meet a range of budgets.

Our approach offers a blueprint for the future, showcasing how businesses can thrive by integrating circular economy principles into their operations.

Read more:
Can the rise in re-commerce help create a more sustainable retail sector?

The aftermath of Brexit has presented both unprecedented challenges and unique opportunities for businesses in the UK.

Areas causing the biggest impact include increased costs, labour and skill issues and supply shortages, with many businesses having to reassess and adapt to thrive in a post-Brexit era.

The effects of 2020

Before 31st January 2020, when the UK officially withdrew from the European Union and the single trading market, there were no borders for trading goods and services between the UK and EU countries. Imports and exports weren’t subject to border checks and restrictions, tax and duty rates, or documentation. Now these rules have made exporting to European countries more complicated and expensive.

As businesses began adapting to the new trade barriers and associated costs and operational complexities, there was a lot to be learned. This, coupled with the double blow of the pandemic on the global economy, meant that momentum was understandably slow. However, as time went on, many businesses began thinking differently and seizing opportunities presented to them.

For some, facing fewer EU restrictions meant they could access new global markets and trade more freely, leveraging the new free trade agreements with Australia and New Zealand. Others have been growing their businesses into more emerging markets such as Latin America, Asia and Africa. Another avenue for lots of businesses has been to expand their physical footprint globally.

Retail: an industry facing change

One industry hugely affected by the overall changes brought about in 2020, was retail. For this sector, Brexit marked a real turning point. Exiting the EU brought about a totally new way of doing business that caused many retail brands to suffer, but within a few months of Brexit coming into play, the enforced lockdowns all across Europe caused by the pandemic sent ecommerce rates soaring.

Bricks and mortar brands were left with little choice but to utilise ecommerce sales channels to remain open and profitable, while meeting shifting consumer preferences. For existing ecommerce retailers, business ramped up significantly. Those who adapted quickly and navigated the requirements post-Brexit were the ones able to prosper.

Analysing fulfilment and logistics strategies was imperative for fast-growing retail brands operating across key global markets. However, as with any unchartered territory, forming partnerships can ease and optimise the process.

For many retailers, it was difficult to capitalise on the opportunity to grow their brand during a time of uncertainty. It was important to navigate these challenges effectively to scale and thrive in the new environment.

Collaboration to create success

This sense of partnership and collaboration was key for one iconic brand with ambitious growth plans post-Brexit. Legacy fashion brand, Ed Hardy wanted to re-establish itself across the UK and the EU, but like many other retailers, was confronted with a range of post-Brexit complexities servicing EU customers from UK-based centres.

This was exacerbated by the fact that Ed Hardy had identified territories like Germany and the Netherlands as key growth markets. The resulting required split between the UK and EU markets meant the brand would have to re-evaluate logistics to avoid increased customs charges, shipping delays, and regulatory hurdles that could impede its reach to vital customer bases across mainland Europe.

We supported Ed Hardy in overcoming the challenges it faced and meeting its goals, through our international expertise and tech-led approach to fulfilment and logistics.

The first area we jointly addressed was distribution effectiveness. With a fulfilmentcrowd warehouse in Bocholt, Germany, and a UK base in Otters Brook, South Wales, Ed Hardy was able to avoid Brexit-related trade barriers, while reducing costs and shipping more quickly. Localised distribution centres also enabled the brandto offer a wider range of products tailored to regional tastes and preferences.

The partnership also provided Ed Hardy with the scalability needed to adapt to changing market demands and consumer trends rapidly; vital in the fast-paced fashion industry where consumer preferences shift abruptly. Specifically, fulfilmentcrowd’s logistics and data analytics tools offered the retail brand valuable insights into their customers’ behaviour and market trends. This data-driven approach enabled more informed decision-making regarding inventory management, product development, and marketing strategies.

Ed Hardy is now one of the fastest-growing companies in the UK, setting its sights on getting back to previous levels of revenue.

Conclusion

With change comes opportunity. However, taking action by collaborating, being more agile and diversifying will enable businesses to more easily – and successfully – capitalise on them. Both Brexit and the pandemic turned the business world upside down, but as brands continue to work together and adapt, they will be capable of not just surviving, but thriving in whatever the future of work brings.

Read more:
Brexit: business success beyond the borders

The ability to adapt and change course can be the difference between thriving and merely surviving in today’s fast-evolving economy.

In turn, ‘pivot’ has become an increasingly common term in the corporate lexicon, especially over recent years, as companies face unprecedented challenges and opportunities.

What is a pivot?

A pivot is a strategic shift in a company’s direction, involving fundamental changes to its business model, product offering or target market.

Organisations pivot for many reasons, driven by the need to respond to market shifts, technological advancesand evolving customer expectations. It is a recognition that the current path may not lead to the desired destination and a significant change is necessary to open new growth avenues.

Famous examples include Slack’s move from gaming to collaboration software and Nokia’s journey from a paper mill to telecommunications powerhouse, illustrating that pivots can come from the most surprising of places and lead to extraordinary success.

Indeed, even Play-Doh started life as a wallpaper cleaning product.

The increasing prominence of pivots

The business landscape is developing faster than ever – and with it, the desire and necessity to pivot has increased. Digital transformation, the rise of hybrid work models and an increasing focus on ESG (Environmental, Social and Governance) principles are all forcing companies to radically rethink what they do, why and who for.

Companies are finding that to stay relevant and competitive, they must be agile, embracing change not just to grow, but to survive. The shift towards subscription-based models, the integration of technology in traditional sectors and the need to embed sustainability are just a few factors prompting businesses to reconsider their trajectories.

Thriving through a pivot

We know all about the pivot at fulfilmentcrowd. We have lived the process, transforming from a niche ERP software developer to a market-leading third-party fulfilment services provider in the aftermath of the global financial crisis.

Our transition to tech-led logistics emerged from a combination of customer demand and the need for growth beyond existing capabilities. Sparked by an enquiry from an ecommerce client, we saw an opportunity to expand our value proposition beyond just software solutions, which were profitable but had reached a plateau in terms of future potential.

We initially provided services from our own warehouse but expanded capacity by applying sharing economy principles and adapting the fulfilmentcrowd software platform, securing agreements with partners in the UK before spreading our wings into the USA, Germany and Netherlands before the pandemic in 2019.

Today, we operate a unique model that is protected from imitation due to the technological complexities that have been overcome; the business has its software development origins to thank for that. It is also sustainable by design – rather than building our own fulfilment centres we utilise the millions of square feet of existing underused warehousing globally.

Our pivot therefore was not about adding services; it was a strategic realignment that has propelled us to international growth and leadership in fulfilment solutions. Today, we operate a global footprint of 1.57 million square feet across 15 fulfilment centres which is powering profitable growth, evidenced by a 17% increase in year-on-year revenue and 83% EBITDA rise in H1 of FY24.

Recognising when to pivot

We have learnt a lot about pivoting along the way. First and foremost, it is a decision that should not be taken lightly. It requires a deep understanding of your market, a clear vision for the future and the agility to change course when necessary.

Key indicators that a pivot might be needed could include persistent challenges in catching up with the market, excessive competition, hitting a growth plateau or finding that only part of your business is thriving. For us, it was all about pushing through the barriers to growth and creating a model that could generate revenue as we slept.

Top tips for a successful pivot

If I was asked what the most important things are in order to successfully pivot, I would recommend focusing on the following:

• Assess your current position: As a first step, take a hard, honest look at where your business stands and its current potential. Back in the noughties, we knew that there was little growth potential in our market and competition was driving out margin. Thinking long-term, the need for change was existential.
• Listen to your customers: Often, the market will signal the need for a change. For us, customer feedback was crucial in kickstarting our evolution.
• Embrace agility: Pivoting requires flexibility and a ‘test and learn’ mentality. We quickly adapted how we used our warehouses and evolved relationships with partners to successfully move into a new market.
• Focus on your strengths: Identify what you do best and consider how these strengths can be applied in a new direction. For us, we had strong expertise in developing ERP-class software and we utilised that to provide an unrivalled 3PL service offering.
• Communicate clearly: Ensure your team is on board and understands the vision behind the pivot. This was key for us and I am proud of how many of the team have stuck with us through the journey.

The central point

Pivots are increasingly becoming a part of the strategic toolkit for businesses aiming to stay relevant and meet new opportunities in today’s market landscape.

It is not a cure-all solution, but a well-executed pivot can redefine a company’s future, opening new pathways for growth and innovation. At fulfilmentcrowd, our transformation journey is a testament to the power of strategic pivoting, driven by customer needs, market insights and the relentless pursuit of doing things better.

Read more:
Embracing the pivot: a growing trend on the business landscape

The sharing economy is prompting a rethink of business practice. To address confusion, this transformative model is also referred to as the ‘crowd’, ‘gig’, ‘peer-to-peer’ or ‘on-demand’ economy. It operates within the context of digital technology and is based on collaborative consumption, allowing both individuals and businesses to share assets, products or services with one another.

At its core, the sharing economy rests on the principle that people can utilise their possessions, abilities and time to benefit others while simultaneously earning an income for themselves. This approach allows for goods and services to be used without the user actually owning them outright, providing a more cost-effective and often environmentally friendly alternative.

Some of the world’s largest brands have successfully adopted this model. Uber, for instance, operates as the world’s largest taxi company without owning any cars, while Airbnb, the world’s biggest accommodation provider, operates no properties.

The UK’s sharing economy is projected to be worth £140 billion by 2025 with growth primarily driven by consumer-facing brands. B2B sectors have not yet fully embraced the principles of resource sharing, despite the many advantages it offers to companies operating in these fields.

Applying a sharing economy approach requires businesses to identify opportunities or gaps in their market and act boldly. It takes confidence and can lead to positive disruption in established industries.

Share in the benefits of a shared economy

While this model is best known for its application in business-to-consumer challenges, what lessons can be applied to the world of business-to-business?

Greater value

The concept that companies can come together to share assets is inherently cost-effective, creating and amplifying value in multiple ways. For example, instead of getting tied into an expensive and lengthy office building lease, a business can reduce its costs by renting a desk within a co-working space. Desks can be flexibly added and subtracted according to demand.

Not only does the sharing economy present obvious cost savings, but it can also create significant revenue opportunities. For example, warehouse owners with unused space can sell it to logistics providers looking for storage capacity or a strategic location.

More sustainable

In a similar vein, optimising space utilisation lowers energy consumption and reduces the need for new builds. The impact of construction is significant on the environment in terms of carbon footprint and green land irrevocably lost.

Broaden reach and scope

The sharing economy approach opens new and innovative ways of thinking, which may otherwise have not presented themselves. Collaborative working offers greater diversity, global perspective and inspiration to learn from. This is especially the case for companies engaging contractors and freelancers to complete work rather than adding to the workforce with permanent staff members.

Boost agility and flexibility

Opening access to resources and expertise through the medium of technology, liberates business leaders to ideate and focus on their product in the knowledge that sufficient capacity is available without the fixed cost and return-on-investment penalties of capital-intensive models.

How fulfilmentcrowd applies these principles to logistics

The traditional approach to logistics has often been coined ‘four walls’ where a provider acquires warehouse space (purchased or leased building) and resources to satisfy demand which is uncertain or, at best, difficult to forecast. The result is underutilisation or limited capacity for growth; the profitability envelope in which a warehouse could be considered operating in optimum conditions is impossibly narrow.

The sharing economy model has enabled tech business like fulfilmentcrowd to rethink the four walls problem by accessing free space in warehouses and enabling customers to see their inventory levels through an app. Site operators generate income from their space, customers can scale-up on a completely variable cost base and fulfilmentcrowd can, uniquely, always offer capacity, a point proven during the pandemic when demand skyrocketed.

As omnichannel brands seek ways to grow revenue, export rates are rising and this is driving demand for B2B and B2C distribution in foreign markets. fulfilmentcrowd offers these customers access to a network of modern logistics hubs in key overseas locations through a single software platform and global relationship manager supported by local expertise and parcel carriers who understand conditions on the ground.

Conclusion

The B2B sharing economy is developing at pace and an increasing range of services are becoming available. Collaboration underpinned by tech and common standards is a key point of differentiation, especially for those operating in more traditional markets. As these principles continue to mature and more businesses digitalise their operations, the model will continue to gain momentum.

Read more:
Is the Sharing Economy Relevant to B2B Sectors?