Resale Revolution: How JD Sports is Changing the Game with ReJD
In this Fast Five Short we discuss how JD Sports has recently launched a new pre-owned shoe shopping platform called Rejd, aiming to provide consumers with significant discounts on gently used footwear. This initiative positions JD Sports uniquely in the aftermarket space as one of the few retail-owned platforms, rather than being brand-led. While the concept has potential, concerns arise about profitability, as similar resale platforms have struggled to maintain sustainable business models. The discussion highlights the challenges of managing inventory and logistics in the resale market, questioning how JD Sports can ensure financial success in this competitive landscape. Ultimately, the hosts recognize JD Sports' innovative approaches and their growing presence in the U.S. retail market, suggesting that they are a brand to watch as they navigate this evolving space.
The launch of Rejd by JD Sports signifies a transformative step toward sustainable retail, providing consumers with an opportunity to buy pre-owned shoes at attractive prices. This initiative distinguishes JD Sports from other retailers, as it is one of the few to embrace an aftermarket platform not directly tied to a specific sneaker brand. Through Rejd, JD Sports aims to offer a wide variety of footwear options, ranging from casual sandals to high-performance shoes, ensuring that they cater to diverse consumer needs. Each product undergoes a thorough inspection and cleaning process, along with a grading system that informs buyers about the shoe's condition, enhancing the shopping experience and building trust in the quality of pre-owned items.
The discussion explores both the excitement and the apprehensions surrounding JD Sports' new venture. Speaker B shares insights on the potential advantages, particularly JD's access to data from original shoe purchases, which could streamline the resale process and reduce waste by reintroducing products into the market. However, the conversation also addresses the precarious nature of profitability in the resale sector, citing challenges faced by platforms like ThredUp and Depop. The speakers delve into the economics of inventory management, questioning whether JD Sports can maintain a profitable balance while holding stock and managing returns. This tension reflects broader issues within the resale industry, as companies grapple with the implications of sustainability versus financial viability.
As the episode unfolds, it becomes evident that JD Sports is not just testing the waters; they are making bold moves in the retail space. The speakers acknowledge the need for JD to remain operationally vigilant as they innovate and expand their offerings. With a proactive leadership team and a commitment to exploring new retail strategies, JD Sports stands at the forefront of potential change in the footwear market. Their willingness to experiment with new concepts like Rejd could position them as leaders in a sector that demands creativity and adaptability, fostering a retail environment that embraces both sustainability and profitability.
Takeaways:
- JD Sports launched Rejd, a platform for pre-owned shoes at discounted prices.
- Rejd stands out as a retailer-owned resale platform, unlike typical sneaker brand outlets.
- All shoes on Rejd undergo inspection and cleaning, ensuring quality for buyers.
- There's concern about profitability for JD Sports' Rejd amidst struggles in resale markets.
- The model involves managing returned products, raising questions about long-term financial viability.
- JD Sports is taking innovative approaches in retail, aiming to differentiate itself in the market.
Companies mentioned in this episode:
- JD Sports
- Nike
- New Balance
- thredup
- Depop
- Realreal
- Arrive Recommerce
Thanks to the A&M Consumer and Retail Group, Avalara, Mirakl, Ownit AI, and Ocampo Capital for making this episode possible
For the full episode head here: https://youtu.be/T_30gGTzlZ4
This podcast uses the following third-party services for analysis:
Podcorn - https://podcorn.com/privacy
Transcript
JD Sports just opened a new shopping platform called Rejd, a place for consumers to shop pre owned shoes at huge discounts.
Speaker A:According to the always in my weekly rotation and sneaker news.
Speaker B:Oh yes, sneaker news.
Speaker A:Sneaker news.
Speaker A:Yes, sneaker News.
Speaker A:Rejd is one of the few aftermarket platforms owned by a retailer as opposed to a sneaker brand.
Speaker A:As a result, its selection is far more broad and isnt positioned as a hot destination for hyped up shoes, but rather under the raider styles as well as performance and casual footwear like sandals and slides.
Speaker A:Every pair of shoes gets inspected, cleaned and repaired as needed, then assigned a condition grade so buyers know exactly what to expect.
Speaker A:And as our resident resale maven, what do you think of JD Sports new re JD concept?
Speaker B:You know, I love the, the fact that JD is doing this from like an umbrella sporting goods brand or house perspective, because one, they, you know, the best part about this is that they, in theory, have all the data from the original purchase because they're collecting not only pre loved, like gently worn items, but they're also taking into account returns that have come in open box product that's come in, and they're putting this on this Rejd marketplace, which they're doing in conjunction with arrive recommerce, which is a platform Rochelle Snyder we've talked to several times.
Speaker B:Um, I believe in that platform and I think what they're ultimately trying to do is, yes, get product back into circulation faster so it doesn't end up in landfills.
Speaker B:However, Chris, there's a big but here for me.
Speaker A:A big but.
Speaker B:A big but.
Speaker A:There's always a but.
Speaker B:Bloomberg recently reported that sites like thredup, Depop and Realreal are having a really hard time right now being profitable because they still have to hold on to product.
Speaker B:And that's what I am concerned about here with this JD Rejd platform because, yes, you know, you can authenticate it quickly because, you know, it came from you.
Speaker B:You can have it cleaned and put out back into the, into circulation.
Speaker B:But how much money are you really going to still make on that product?
Speaker B:That's the big question here for me, because I think that when, when you see sites that are doing this, when it's just peer to peer, there's no, you know, pulling product back in and have somebody having to own and manage that, I think that's where you stand to be most profitable.
Speaker B:So I'm a little surprised that JD didn't go that route, especially with such adored brands that they have in their, in their stable, like Nike, like new balance and others.
Speaker B:But, um.
Speaker B:But where do you, where do you land on, on the whole JD, like, resale this re JD site?
Speaker A:I mean, I don't, I don't have a lot to add.
Speaker A:I think what the point you're bringing up is really interesting to me is, is right.
Speaker A:And you're right because, like, even those companies are struggling.
Speaker A:Even the peer to peer sites are, you know, apparently struggling.
Speaker B:Right.
Speaker A:So, like, and so I just, I do struggle with how anyone makes money doing this in the long run.
Speaker A:Like, it just seems like a really hard thing to make money when you're shipping, you know, shoes back and forth multiple times or holding inventory for that.
Speaker A:So, like, I don't know.
Speaker A:But I think with that said, the one point I take from this story is JD Sports is clearly going for it.
Speaker A:I mean, oh, yeah, multiple headlines where we've talked about them this year, which before, I don't even think JD Sports was in the, the lexicon of american retail all that much.
Speaker A:But they're making headline after headline and taking some pretty unique approaches in the marketplace.
Speaker A:Like we had them on talking about video commerce and everything they're doing there now.
Speaker A:The question is they have to be careful they don't get too far out in front of things and keep their eye on the ball operationally in terms of the day to day.
Speaker A:But, you know, we've talked to Arianne Parisi, their head of digital commerce there, and she's on top of her stuff.
Speaker A:She gets it.
Speaker A:And so I think they're a retailer to watch here in the US because they could be on an upswing.
Speaker A:They're just doing some really creative things and they're entering a space that honestly needs somebody to kind of come in and be like, hey, we're going to do this differently.
Speaker A:We're going to do it better.
Speaker A:And so I applaud them for that.
