Removing the Friction from Resale
Insights from the Coach-EON-Poshmark Deal
The recent partnership between Coach's Coachtopia sub-brand, EON, and Poshmark marks a significant step in the evolution of resale markets. This collaboration introduces an innovative "instant resale" feature utilizing digital product passports, effectively addressing many of the traditional pain points of reselling pre-owned products. To fully appreciate this innovative solution, it's crucial to understand not only the challenges consumers typically face when attempting to resell items but also the unique value created when combining DPP technology with large platforms that specializes in resale.
The Woes of Resale
Reselling goods, especially luxury items like Coach bags, can be a daunting process fraught with numerous obstacles. One of the biggest hurdles is proving authenticity. Potential buyers are often wary of counterfeit goods, making it crucial for sellers to provide evidence of genuineness. This may involve documenting serial numbers, showcasing quality markers, or even obtaining professional authentication services – all of which can be time-consuming and potentially costly. Determining the right price for a used item is another significant challenge. Luxury goods typically depreciate once used, but the extent can vary widely based on factors like the item's condition, current fashion trends, and market demand. Sellers must research comparable listings and consider various factors to set a competitive yet profitable price.
Creating an accurate and appealing listing requires detailed descriptions of the item's condition, including any signs of wear or damage. This process can be tedious and time-consuming, especially for those unfamiliar with the technical aspects of the product. High-quality photos are also crucial for successful online reselling. Capturing the item's true color, texture, and condition can be challenging, often requiring good lighting and multiple shots from various angles. Choosing the right platform to sell on comes with its own set of challenges. Different platforms have varying fee structures, audience demographics, and policies, which can impact a seller's profitability and success rate.
The Coach-EON-Poshmark Colab
Last week, Coach, through its Coachtopia sub-brand, announced that it had partnered with EON and Poshmark to launch an innovative "instant resale" feature using a digital product passport (DPP).1 This collaboration introduces a Near-Field Communication (NFC)-powered Digital ID for Coachtopia products, created by EON. Each digital passport contains detailed information about the product, including its environmental footprint, materials, design, and available circular services.
When a Coachtopia customer decides to resell their item, they can simply tap the embedded NFC tag with their smartphone, which directs them to a detailed product page containing all the information stored in the digital passport. From this product page, customers can easily resell the item on Poshmark with just a click of a button, resulting in a pre-filled listing that simplifies the resale process significantly.
This system removes many traditional friction points associated with reselling luxury items, such as manually inputting product details or proving authenticity. For Coach, making its products "resale-ready" not only enhances post-purchase relationships with customers but also has the potential to increase customer lifetime value and provide visibility into second-hand transactions of their products.2
Additionally, Coach will gain access to near real-time resale data from Poshmark, including information on which products were resold and their sale prices. This data is recorded to the item's Digital ID, enhancing transparency and offering Coach valuable insights into the full product lifecycle. With this deal, Poshmark joins EON Exchange, EON's integrated partner marketplace that facilitates connections between brands using EON's technology and various service partners.3
Overall, this partnership represents a significant step toward making circular fashion more accessible and streamlined by combining Coach's brand power and sustainability goals with EON's digital ID technology and Poshmark's resale platform. This collaboration creates a seamless experience for consumers while providing valuable data and insights for the brand.
NFC Chip Technology
At the heart of this innovation is the Near-Field Communication (NFC) technology powering the Digital ID created by EON for Coachtopia products. NFC is a short-range wireless technology that allows for the exchange of small amounts of data between devices when they are brought into close proximity. In the context of Coachtopia products, NFC chips are embedded within each item, typically in easily accessible locations.
Each NFC chip is linked to a unique digital passport containing comprehensive information about the product, including its environmental footprint, materials, design, and available circular services. To access this information, consumers simply need to hold their NFC-enabled smartphone close to the product's NFC chip, typically marked with a connected cloud emblem. This action triggers a pop-up on the smartphone, directing the user to a detailed product page.
The seamless integration of this NFC technology with digital passports and Poshmark's platform creates a frictionless resale process that significantly reduces transaction costs for sellers. When a Coachtopia customer decides to resell their item, they can simply tap the NFC chip with their smartphone. This action not only provides them with all the verified product details but also allows them to create a pre-filled listing on Poshmark with just a click of a button. This streamlined process eliminates the need for manual input of product information, significantly reducing the time and effort required to list an item for resale.
Moreover, the NFC-enabled digital passport serves as a guarantee of authenticity, addressing one of the primary concerns in luxury resale. Each time a product undergoes a lifecycle event, such as a repair, trade-in, or recycling, this information is updated in the digital passport. This creates a transparent and verifiable history of the product, enhancing trust in the resale market and potentially increasing the value of pre-owned items.
Power of Platforms
While the NFC chip is a key element in reducing resale friction, its advantages are fully realized when integrated into a resale platform. This is where Poshmark enters the picture, offering a unique blend of features that further remove the friction of resale. Poshmark offers a variety of key features that facilitate transactions between buyers and sellers, enhancing the overall shopping experience on the platform. One of the primary features is the search functionality, which allows users to find specific items quickly. Buyers can utilize various filters to narrow down their search results based on criteria such as size, brand, color, and price. This filtering capability helps streamline the shopping process, enabling users to locate desired items more efficiently.
In addition to search and filtering, Poshmark provides a secure payment system that ensures transactions are safe for both buyers and sellers. The platform handles payment processing, allowing buyers to purchase items without directly interacting with sellers' payment information. Once a transaction is completed, Poshmark also manages the delivery process by providing shipping labels and tracking information, making it easier for sellers to ship their items and for buyers to monitor their purchases.
Poshmark further enhances the buying experience through features like saved searches and notifications. Buyers can set alerts for specific items or searches, ensuring they are promptly informed when new listings that match their criteria become available. This feature is particularly useful for avid shoppers looking for rare or in-demand items. Additionally, Poshmark encourages community engagement by allowing users to follow their favorite sellers and receive updates on new listings or price drops. The platform's "Posh Parties" – themed live shopping events where users can share listings – further enhance this community aspect, turning the act of buying and selling into a social experience.
A significant advantage for sellers on Poshmark is its large user base, reported to be over 70 million users, predominantly in the United States.4 This extensive community provides sellers with access to a vast market of potential buyers, increasing the likelihood of successful sales. The platform's social media-like features, such as likes, comments, and shares, further enhance engagement and visibility for sellers' items.
In addition to features commonly found on online marketplaces, Poshmark has cultivated a vibrant community of fashion enthusiasts. Users can follow each other, share listings, and leave comments, fostering a sense of connection and engagement that goes beyond mere transactions.
Poshmark's user-friendly interface and suite of seller tools significantly streamline the selling process. The platform provides prepaid shipping labels, simplifying one of the most cumbersome aspects of online selling. Sellers can also share their listings with followers to increase visibility and boost sales. Features like "Offer to Likers" allow sellers to send discounts to users who have shown interest in their items, while the "Bundle" feature encourages buyers to purchase multiple items from a single seller at a discounted rate. These tools, combined with Poshmark's analytics insights, empower sellers to enhance their customer service and boost sales.
Security, a crucial concern in online transactions, is another area where Poshmark excels.5 The platform's "Posh Protect" feature ensures that buyers receive their orders as described or get a refund. For sellers, Poshmark holds the buyer's payment until the item is confirmed as delivered, providing a layer of protection for both parties. This commitment to security helps build trust in the resale ecosystem, a critical factor in the success of luxury resale.
Future of Resale
The adoption of DPP technology and its integration with platforms will likely accelerate rapidly in the coming years, driven by regulatory requirements, market demand, and technological advancements.6 To understand the rate of adoption and integration, several key indicators will be important to watch. Regulatory developments, particularly in the European Union and other major markets, will be crucial drivers to watch. The implementation and expansion of regulations requiring DPPs will likely spur faster adoption, especially for companies exporting to these regions. Consumer demand for product information, sustainability, and authenticity will also play a significant role, so monitoring trends in consumer behavior and preferences related to product information will be important.
Industry initiatives and collaborations, such as the formation of consortiums focused on DPP implementation, can accelerate adoption and should be closely observed. Technological advancements in underlying technologies like blockchain, AI, and IoT will make DPPs more efficient and cost-effective, potentially increasing the rate of adoption. The overall trend towards digital transformation in supply chains will facilitate DPP adoption, so keeping an eye on the progress of digital supply chain initiatives across industries will be informative.
Market differentiation achieved by early adopters may drive faster adoption among competitors, so watching for case studies and success stories of companies effectively leveraging DPPs will be valuable. Partnerships between DPP providers and major e-commerce or resale platforms could significantly accelerate adoption and integration, making new collaborations in this space worth monitoring. Increased venture capital investment in DPP technology and related startups could indicate growing market confidence and accelerate innovation. The development of industry-wide standards for DPPs will facilitate faster adoption, so progress in creating common protocols and data formats should be tracked.
Finally, it will be important to closely monitor deals like the Coach-EON-Poshmark partnership to understand the success and future rate of adoption DPP technology and its integration with resale platforms. This collaboration serves as a valuable case study. Key aspects to watch include sales volume and user adoption, consumer response to the ease of reselling Coachtopia products, and any publicly shared insights about the data Coachtopia gains from this partnership. It's also important to keep an eye on whether Poshmark expands this capability to other brands or if EON partners with additional resale platforms, as such expansions would indicate growing momentum for DPP adoption.
Conclusion
The Coach-EON-Poshmark partnership illustrates the innovations that are remaking resale markets, particularly for luxury goods. By combining digital product passports, NFC technology, and a robust resale platform, this collaboration effectively addresses many of the traditional pain points associated with reselling pre-owned items. The integration of these technologies not only simplifies the resale process for consumers but also provides valuable data and insights for brands, potentially transforming their relationship with customers beyond the initial point of sale.
This innovative approach to resale has important implications for the future of circular fashion and sustainable consumption. As regulatory pressures increase and consumer demand for transparency and sustainability grows, we can expect to see more brands and platforms adopting similar strategies. The success of this partnership could serve as a catalyst for wider adoption of DPP technology across the fashion industry and beyond. The lessons learned from this collaboration can provide valuable insights into the future of resale markets and how the relationship between brands, DPP technology providers, and platforms will evolve as we shift to a more circular economy.
Appendix
Consumers have various options available for resale each with its own pros and cons. This table highlights the existing options as well as the new DPP enabled resale capability enabled by the deal between Coach, EON and Poshmark.
Footnotes
I've been trying to not buy anything new for about a year --- big fan of secondhand shopping, been using some fun tools to make it easier like the chrome extension that finds me resale alternatives for the items I'm looking at as I shop bit.ly/Phia
Hope this is helpful for people!