Interest in refurbished smartphones is on the rise as wireless carriers have moved away from subsidy models. Now, instead of paying a lower upfront price for a phone in exchange for committing to a plan, consumers are often on the hook for the full cost, and the sticker shock is driving some to seek out alternatives. On Reebelo, a site for buying refurbished electronics, most of the activity is in fact around the iPhone.
And there's still a ton of room to grow. According to one study, more than 80% of U.S. consumers have never shopped refurbished, citing lack of trust or awareness of the products. But if one day, the latest iPhone is seen as a sign of wastefulness rather than a status symbol, that could change.
Businesses like Reebelo and Back Market find buyers largely through paid search, and instill confidence by making the process feel more like shopping for a new product than taking a risk with an unknown third-party seller. Similar approaches have worked before: The U.S. used-car market — once seen as a haven for unscrupulous dealers — is now more than twice the size of the new-car market, and resale is booming in sneakers and apparel as companies formalize the selling process.
America’s fastest-growing marketplace looks more like a social app than a shopping site. In fact, many of the participants aren’t even there to buy, they’re there to be entertained.
It’s called Whatnot: a live-selling site founded just 3 years ago and recently valued at nearly $4B. The site holds auctions alongside a live group chat, strategically combining two of the most powerful levers in conversion: social proof and urgency.
With similar dynamics to live, in-person auctions, Whatnot buyers are heavily influenced by other buyers’ excitement as the auction escalates. What’s more, the perception that there’s a large crowd, all going after the same product, reinforces trust and appeal. And the numbers are impressive: engagement metrics resemble that of a social app while conversion metrics match that of a high-performing ecommerce marketplace.
While live selling is a growing phenomenon in the US, it’s been exploding in China for years. For the first time, in 2020, Chinese live-streamed shopping GMV ($137B) surpassed total US digital ad spend ($135B). Many view Whatnot and its competitors as transformative tech reshaping the retail landscape, potentially redefining how Americans shop.
LEGO's physical stores give it an opportunity to market to both demographics by placing kid-friendly sets at a child's eye level and expensive sets at an adult's. This is particularly noticeable for Star Wars collections, where the products related to Baby Yoda will be lower down while the Millennium Falcon, tailor-made to appeal to a Generation X or older Millennial parent, is higher up.
Online, LEGO does this targeting in another way: product reviews encourage reviewers to share whether the product was bought as a gift or for their own use, so anyone shopping for a Saturn V rocket or a model of the Eiffel Tower can rest assured that they're not alone in buying for their own use. LEGO’s online marketing describes larger sets as ‘relaxing builds,’ something that's more meaningful to adults than kids and aligning with growing mental wellness trends.
The rise of ecommerce has created a bias towards shelf-stable versions of existing products, from beef tallow as an alternative to butter and freeze dried strawberries as opposed to fresh ones.
Every country has some products that are only sold domestically, but Japan has a particularly high density of them: it's the world's 11th largest country by population, and the third largest by GDP, so the domestic market is enough to keep most companies busy. And since more than 90% of Japanese speakers live in Japan, most exporters would either have to pay for new packaging and marketing, or would have to sell to an audience that was willing to shop in a foreign language.
This creates demand for proxy shopping sites—platforms that let consumers place orders in foreign locations through local agents, who then ship the product to the consumer. The alternative to proxy shopping is to browse and order through Google Translate, a process that’s both clunky and error-prone.
The model also applies within countries: ShipToHawaii.com, for example, is a similar proxy shopping site within the US. And there are other sites that add a purchase opportunity where one wasn’t supposed to exist: Doordash had an early growth hack where it would post the menu of a restaurant online, accept orders, and deliver them—all without telling the restaurant, or charging it.
For enthusiasts of anime, J-pop merch, and Japanese snacks, proxy shopping’s appeal taps into broader hobbyist and niche interests, where exclusivity outweighs convenience. Buyers often show off to peers that the product they bought is only available in Japan (without necessarily mentioning that they bought it online). It’s also something close to a digital form of travel, experiencing things that are unique to another country without leaving home.
In a world where online shoppers want everything faster than they did the year before, sites like Zen Market tap into a market where inconvenience is a feature, not a bug.
In late 2022, a then-obscure shopping app quietly became the most downloaded free app in the U.S. in both the Google Play store and the Apple App store, surpassing TikTok, Amazon, and YouTube. Temu, often described as ‘TikTok for shopping,’ capitalizes on growing social commerce trends, emphasizing product discovery over traditional intent-based purchasing.
While US companies are increasingly looking down on unprofitable paid growth, Chinese companies tend to see it more as an opportunity to accelerate a data advantage. By frontloading the product with lots of users early on, the companies have much more user data to work with and can therefore make a better product with better personalization.
It’s what TikTok did in order to launch in the US: They spent $1B on US ads in 2018 alone. They knew they needed a sticky recommended page from the get-go and Temu is following the same playbook.
It’s also what SHEIN did. One key ingredient used by SHEIN, and very much needed for fully-optimized product recommendations is a massive product line. While the average Target store has 80,000 unique products for sale, SHEIN adds 6,000 new items every single day, making it likely that a perfect set of recommended products can be generated for any given user.
Another key ingredient Temu is bringing from China to the US is discovery-based online shopping. Amazon is a very high intent site where users go when they know what they want. Brick-and-mortar shopping malls are the opposite and while China has successfully brought the shopping mall experience online, the US has not. Now, just like how TikTok gives users an endless feed of entertaining videos to scroll through, Temu is giving consumers an endless feed of products to buy – and ones they didn’t even know they wanted.
Taobao is another app in China that’s successfully done discovery-based shopping. Many Chinese consumers open the Taobao app when they’re bored, with no product in mind. Over the course of several days or weeks, users will build a shopping cart and even use built-in social features like asking friends’ opinions on items in their cart. These features don’t make sense on a site like Amazon where users often purchase with time sensitivity and 2-day shipping, but they do with discovery-based social shopping.
As birth rates decline, hand-me-down clothing is becoming less relevant. The cost of baby clothes and toys can less and less be spread across multiple children, making them in turn essentially more expensive. In fact, the global fertility rate has fallen drastically from 5.1 children per woman in 1964 to 2.4 children per woman in 2018, per the World Bank.
As this happens, the resale industry – including everything from clothing to toys and furniture – has become a corporate juggernaut. Goodwill alone generated over $5.9 billion in sales in 2017. Prices have crept higher and higher over the years to almost match that of retail stores.
In parallel, 1 in 3 Gen Z'ers are now buying clothes secondhand, more than any other age group. This behavior shift has in part led to the rise of a whole category of supporting products like the fabric shaver which removes lint beads. As secondary clothing marketplaces like Poshmark and Thredup grow, sellers see a higher ROI after touching up the clothing using a fabric shaver. On secondary clothing subreddits, sellers highlight how quickly fabric shavers restore garments, mirroring broader DIY and refurbishment behaviors.
You might assume that sticker removers would mainly be used by consumers who don’t want a sticky residue on their new purchases. But it’s actually the people flipping secondhand items online who are driving demand.
Secondhand marketplaces like Poshmark, Depop, Facebook Marketplace, and Vinted are booming right now. This cottage industry generated $523 billion in global revenue last year, as consumers have become increasingly comfortable with buying pre-owned items.
However, buyers still prefer secondhand products to look new. In fact, they are willing to pay close to the original retail price for an untarnished item.
For this reason, seasoned sellers usually try to remove signs of a previous life. Sticker removers are tools of the trade. These sets help sellers to remove the old-fashioned price labels often used by thrift stores.
Another commonly used tool is the fabric shaver, which essentially removes lint from garments. On subreddits devoted to the secondary clothing market, sellers brag that a few minutes with a fabric shaver can restore a shirt or sweater to the point that it fetches almost the same price it did when new.
Keyword | Graph - 5 Years | Growth - YoY | Search Volume |
---|---|---|---|
Fabric Shaver | 3% | ||
Sticker Remover | 2% | ||
Vinted Clothes | 23% | ||
Free Facebook Marketplace | 1% | ||
Temu | 52% | ||
TikTok Shopping | 5% |