Solutions

Acquire new customers and secure your brand's revenue with Second-hand solutions.

November 14, 2024
/
7 minutes read

In an unstable economic environment, fashion brands face significant challenges: rising customer acquisition costs (CAC) on advertising platforms, decreasing purchasing power, inflation, and geopolitical conflicts. To remain competitive, they must innovate and find new levers for profitability. FAUME offers a turnkey solution to integrate second-hand into their business model, becoming a strategic growth lever.

Rising customer acquisition costs on advertising platforms:

Classic customer acquisition methods via digital advertising campaigns are becoming increasingly expensive. The increase in advertising prices, combined with growing competition, puts pressure on brands, forcing them to explore more cost-effective alternatives to attract and retain customers.

Purchasing power crisis: Inflation, conflicts, and political instability:

Simultaneously, the decline in purchasing power in Europe exacerbates the challenges brands face. Inflation, geopolitical uncertainties, and political instability push consumers to favor more affordable and sustainable options. To meet these new expectations, brands must adapt their offerings by balancing attractive prices with responsible engagement.

FAUME: A sustainable growth lever to maximize customer value:

In this context, FAUME positions itself as an innovative and sustainable growth lever. We enable fashion brands to launch their secondhand offerings, bringing concrete and measurable benefits. Additionally, ethical fashion brands are increasingly integrating sustainable practices to reduce their environmental impact, highlighting the importance of circular fashion.

  • Reduction in Customer Acquisition Costs (CAC): FAUME helps reduce dependence on paid advertising by transforming your customers into ambassadors through the resale of their items. This loyalty optimizes your marketing expenses and significantly reduces CAC.
  • Increase in Lifetime Value (LTV): Offering the resale of items in exchange for store credit strengthens customer loyalty and multiplies touchpoints with your brand. This extends the lifespan of your customers while maximizing the long-term value generated. Luxury brands must also adapt to circular economic models by integrating second-hand offerings to strengthen brand loyalty.
  • Securing Revenue (CA): Store credits in exchange for second-hand items ensure reinvestment in your brand, capturing the value of products instead of losing them to third-party platforms. This creates a continuous revenue stream and further enhances customer loyalty.
  • Acquisition of New Customers: Thanks to the attractiveness of second-hand prices, the brand can offer more affordable rates and thus attract a generally younger customer base.
  • Increasing Profit Margins per Item and Product Lifetime Value: By offering a buyback and resale service, the brand is no longer limited to the profits of the first sale. Now, each item can be sold, bought back, and resold multiple times, significantly increasing its value throughout its lifecycle.

Product lifecycle: Towards a circular economy:

The product lifecycle is a key concept in the circular economy, particularly relevant for the textile industry. It involves considering all stages of a product's life, from design to end-of-life, to minimize its environmental impact and maximize its value. In the fashion sector, this approach is crucial for promoting sustainable fashion.

Towards products that fulfill a circular economy agenda

To adopt a circular economy, fashion brands must integrate several essential steps:

  • Design: Create durable, repairable, and recyclable products. This involves eco-design that considers the longevity and reusability of materials.
  • Production: Use sustainable materials and adopt production practices that reduce energy and water consumption. This helps to minimize environmental impact from the beginning of the lifecycle.
  • Distribution: Optimize the supply chain to reduce greenhouse gas emissions. Greener logistics contribute to a reduced carbon footprint.
  • Consumption: Encourage consumers to adopt sustainable behaviors, such as repairing or reselling products. Brands can play an educational role in raising awareness among their customers.
  • End-of-Life: Consider the end-of-life of products by promoting their reuse.

By adopting a circular economy, fashion brands can not only reduce their environmental impact but also maximize the value of their products throughout their lifecycle. FAUME helps brands integrate these practices by facilitating the resale and reuse of items, contributing to more sustainable and ethical fashion.

Concrete results:

The results of our clients demonstrate the effectiveness of FAUME:

  • 20% reduction in CAC on average: Thanks to better customer retention and the attraction of new customers via second-hand, brands see their acquisition costs decrease. Isabel Marant, for example, collaborated with FAUME to offer second-hand fashion solutions.
  • 25% increase in LTV: Resale programs and store credits encourage a higher average basket, increased purchase frequency, and greater customer longevity. The Kooples, among others, partnered with FAUME to offer solutions for reselling used fashion items.
  • Securing 10% of annual revenue: Clients adopting FAUME see a significant portion of their annual revenue stabilized through upselling generated via the use of store credits on new items.
  • 10% incremental revenue: On average, our partner brands record a 10% increase in their revenue in the first year, thanks to the sale of second-hand products.
  • +15% new customers: Thanks to our buyback programs, which reach new customers not registered in our clients' CRM database, and thanks to the sale of second-hand items, which attracts a new customer base.
  • +20% profit margin per item: On average, each item is resold between 2 and 3 times during its lifecycle, optimizing its profitability potential. This circular model directly contributes to increasing margins and extending the lifespan of products

« Originally, we sought to regain control of the secondhand market using a white-label solution like FAUME, avoiding third-party marketplaces. Now, the main success of this partnership is reflected in increased customer loyalty and acquisition. Customers have provided very positive feedback, expressing their enthusiasm for this new service. »  - Marion Camborde, Digital Innovation officer at Isabel Marant

FAUME: A strategic competitive advantage:

Integrating a secondhand program offers a unique opportunity to differentiate. By adopting this model before your competitors, you attract sustainability-conscious consumers while maximizing your revenue. FAUME transforms a simple service into a strategic lever for the future, in line with modern consumption trends and ecological challenges.

Impact of secondhand on growth strategy:

Integrating secondhand into the growth strategy of fashion brands offers numerous advantages, both economically and environmentally. Here's how second-hand can transform your growth strategy:

  • Increased Customer Loyalty: Customers who buy secondhand products are often more engaged and loyal. They appreciate the opportunity to find unique items at affordable prices, which encourages them to return to the brand for other purchases.
  • Cost Reduction: Secondhand reduces production and distribution costs, as the products already exist. This decreases the need to produce new items, reducing expenses and ecological footprint.
  • Increased Product Value: By giving a second life to products, brands can maximize the value of their items. Products that would otherwise be discarded find new utility, extending their lifecycle and perceived value.
  • Improved Brand Image: Brands that integrate secondhand into their strategy show their commitment to sustainable development. This improves their brand image and attracts environmentally conscious consumers.

By integrating secondhand into their growth strategy, fashion brands can not only benefit from these advantages but also contribute to reducing the environmental impact of the textile industry. FAUME offers a turnkey solution to facilitate this transition, allowing brands to position themselves as leaders in sustainable and ethical fashion.

Anticipating market evolution: A long-term vision:

Anticipating market evolution - Secondhand's long-term vision

The fashion industry is undergoing a major transformation with the rise of the circular economy and the growing importance of secondhand. By 2030, the global secondhand market could double and surpass that of fast fashion. This change is driven by increasing consumer demand for sustainable and affordable products.

In Europe, the secondhand market is expected to grow 11 times faster than the new market. This highlights the importance of the circular model, not only to address environmental concerns but also to influence purchasing behaviors.

FAUME - A pioneer in circular fashion:

With FAUME, you position yourself at the forefront of this trend. You capitalize on the rise of circular fashion while maintaining control over the customer experience, your brand image, and the relationship with your consumers. Unlike external second-hand platforms, FAUME allows you to strengthen loyalty and increase the perceived value of your brand.

Turnkey support:

FAUME offers simple and supported integration, with personalized support at every step. We ensure a smooth and rapid transition to the integration of second-hand, adapting to the specifics of each brand.

A customized solution to achieve your strategic goals:

Based on your distribution ecosystem, volumes, and customer typology, FAUME provides tailored simulations to evaluate the impact of our solution on your key KPIs: reduction in CAC, increase in LTV, and securing revenue. Each brand being unique, we adapt our approach to precisely meet your needs.

A catalyst for sustainable growth:

In a period marked by economic and political uncertainty, FAUME is the ideal solution to improve your performance. Working with FAUME means opting for a sustainable growth strategy, capable of reducing your acquisition costs, increasing the LTV of your customers, and securing your revenue. FAUME transforms second-hand into a strategic pillar of long-term success, while strengthening the engagement and loyalty of your consumers.

Stay ahead of the game!

Sign up to FAUME's The Secondhand Review newsletter
Read inspiring stories from brands that have successfully launched their secondhand businesses with FAUME