The growing value of聽聽is a prime example of recommerce’s recent rise. Starting with an estimated worth of US$96 billion in 2021, the retail segment is projected to double in size within the next three years, reaching $218 billion by 2026. Similar growth levels are also reflected in other retail categories, including electronics, fashion accessories, and oversized goods such as furniture.

However, innovating this business model is more than just an exercise of responding to consumer demand, regulatory pressure, and expectations for prolonged product life. It’s also an opportunity to enter markets that are otherwise inaccessible due to price sensitivity, supply chain barriers, provenance uncertainty, and monopolization of recommerce-native startups running on customer-to-customer (C2C) platforms.

Recommerce’s Potential Goes Beyond Sustainability

While the rules of creating, implementing, and operating a recommerce business model are similar to those for other innovation initiatives, the scope of change is much more wide-reaching.

Business model innovation is traditionally consumer-centric and mainly focused on the buying experience in the retail sector. However, in the case of recommerce, the seller and buyer are equally considered “consumers.” Therefore, frictionless processes are essential whether sellers send their used goods to the retailer and receive in-kind payment or buyers browse the commerce site, complete their purchase, and return an item.

Compared to competing startups, larger retailers and brands could have a considerable edge in creating seller and buyer experiences that are fast, transparent, and responsive. Organizations can achieve these characteristics by further advancing existing technology infrastructure to help ensure immediate payout for every item sold, optimize inventory turnover and control, streamline logistics, and prevent fraudulent transactions.

True Value Emerges with Expertise and Guidance

Capturing the total value of a recommerce business model can be easier said than done 鈥� especially within the confines of traditionally slim margins and under the watchful eyes of consumers, industry auditors, and government regulators. However, access to industry, process, and technology expertise allows retailers to create an authentic model that meets consumer needs and expectations while optimizing profitability and sustainability performance.

For businesses within the retail industry, Resell Engine from 麻豆原创 can help fulfill that promise with an intelligent algorithm. The software can evaluate a wide database of secondhand items and calculate a buy-back and competitive resale price. In addition, recommerce managers can set rules for different markdowns to help tailor the price determination to their needs.

Furthermore, with the support of , businesses can blend their established Resell Engine with existing applications to draw on the latest 麻豆原创 innovations, broad leadership in industry expertise, and a global innovator ecosystem. In return, executable strategies are shaped to help optimize operations, business models, and revenue streams while driving change with less risk, increased speed, and exceptional outcomes.

Suppose your retail organization wanted to automate the pricing of received goods. You could give sellers optimal payback for their items, yield the high-quality inventory that consumers demand, and expand margins for your company by using Resell Engine.

The first step is automating analysis and price-setting consistently across sales channels. The algorithm of the Resell Engine software can evaluate a comprehensive database of secondhand items to help calculate a buyback and competitive resale price based on authentication and condition. You can then adapt pricing strategies 鈥� such as markdowns 鈥� to optimize the profitability of every transaction and seize market demand effectively.

But pricing is only one area where big losses can take place in a recommerce business model. Margins are also susceptible because the 24/7 pace of your e-commerce business model can challenge the balance between pricing, sustainability, and profitability.

Extending Resell Engine across your business can help facilitate that equilibrium by complementing your brand’s strategic vision and meeting consumer expectations. You can also implement, deploy, and roll out new capabilities of Resell Engine necessary to support the business model 鈥� pivoting processes to help address emerging business needs and realize expected outcomes.

Based on extensive industry, process, and technology research, Resell Engine can enable you to explore the impact and value of your price determinations while aligning requirements and objectives with the business model. In return, you can increase secondhand good sales with a higher sell-through rate, double your operational efficiency, attract more customers with fair pricing, and promote experiences that your customers and sellers will love.

But more importantly, you can build a business model that helps ensure your costs do not outweigh the benefits of recommerce. Resell Engine can provide the insights needed to undergo an accurate cost-benefit analysis of your recommerce scenario, including risk assessment and mitigation.

A More Sustainable and Profitable Future Is Ahead

Retailers that invest in recommerce today will position themselves to weather economic downturns and reap the benefits of becoming a more sustainable brand. But they must take the proper steps by designing a highly efficient system that provides the greatest possible value to their buyers and sellers while maximizing revenue recovery on returns and resale items.

This is where Resell Engine from 麻豆原创 comes in. Through the software鈥檚 guidance, insights, and enablement, retailers can set a clear vision, create a best-practice design, and drive a strategic plan that can reveal a more sustainable and profitable future through a recommerce business model.

Want to learn more about how 麻豆原创 can support the innovation and delivery of your recommerce business model? Contact us at聽resell_engine@sap.com聽or visit “” on LinkedIn.

Maximilian Schmid is an entrepreneur in residence (Resell Engine from 麻豆原创) and a BTS management consultant for 麻豆原创 Germany.
Benedikt Scheuermann is an entrepreneur in residence (Resell Engine from 麻豆原创) and a BTS management consultant for 麻豆原创 Germany.

But rising to the challenge of today’s marketplace 鈥� especially increasing raw material and energy prices, margin pressure, supply chain complexity, and regulatory requirements 鈥� requires much more than Industry 4.0 initiatives focused on efficiency and price reduction. From operational performance to customer experience, companies must integrate data from across the enterprise into a single source to form sound decisions that make sustainability profitable and profitability sustainable.

Such a transformation is undoubtedly technology intensive, but the key enablers are also unassailably human. Understanding this reality, many chemical companies rely on the portfolio, provided by the Business Transformation Services group at 麻豆原创, to help transform their operations and gain a competitive edge amid fast global changes.

Turning Challenges into Great Opportunities

Competitively addressing turbulence depends on the ability to view transformation through the lens of six fundamental challenges:

R&D 麻豆原创ure across the Product Portfolio
The imperative to resist margin shrinkage, mitigate risks, increase ROI, and boost growth calls for innovative products and services that offer business value and foster close partnerships with customers. By pushing forward the adoption of advanced technologies to drive global R&D, supplier, and customer collaborations and joint ventures, businesses can prevent commoditization.

The Need for Vertical Integration
Evolving production facilities with a balance of high efficiency, global scale, flexibility, and intelligent responsiveness allows supply chains to weigh the synergistic benefits of integrated manufacturing plants or industrial parks against the flexibility of smaller plants. As a result, businesses can leverage new opportunities with disruptive business models, such as making raw materials instead of buying them and producing semi-finished or even finished goods.

Global Supply Chain Complexity
Global supply chains must be secure enough to mitigate volatile market conditions, such as global health emergencies, rising prices for raw materials and energy, and other factors that impact economic conditions. Companies can gain this advantage by establishing commercial and logistical transparency to support optimization and global planning of demand, sales, and operations.

Hidden Advantages of Business Networks
Business cannot stay competitive in a complex ecosystem alone. They must also scale and optimize their supply chain globally with business networks, such as the Catena-X Automotive Network. Doing so empowers suppliers, contract and toll manufacturers, joint ventures, and customers to collaborate openly and create new prospects for co-innovating better products and services, improving value chain efficiency, and fueling long-term growth.

Compliance and Sustainability Urgency
A primary objective for any chemical business is ensuring compliance with industry regulations. Yet, B2B customers also favor suppliers that help meet their own environmental, social, and governance (ESG) mandates. Sustainable businesses and innovations provide balance between these two expectations, creating a highly sought-after competitive edge by gearing products and services towards a circular economy.

Business Agility
The industry鈥檚 dynamic and fast-changing environment of mergers, acquisitions, and divestitures is creating tremendous complexity and pressure for permanent change and adaptation. Chemical companies need to balance industry-wide globalization and centralization while increasing business agility.

Chemical companies with a digital strategy encompassing all these topics can address industry challenges and seize on market trends in a disruptive manner. Through , businesses can gain new opportunities and capabilities never previously considered possible 鈥� including increased speed and efficiency, process automation, and data transparency.

Seizing the Moment with Advisory Expertise

From the perspective of 麻豆原创 Advisory Services, digitalization is not just another IT term but also a critical business priority. The more intelligent and sustainable a company becomes, the more agile, flexible, and integrated its value chain becomes.

Advisory experts from 麻豆原创 can enable chemical companies to turn their fundamental challenges into opportunities with a well-structured, business-driven design. This approach elaborates on the steps of the digital transformation journey 鈥� leading to a road map for future architecture design. Each phase of the road map follows an ideal sequence of digital innovation, technology adoption, and industry best practices and leverages the highest value for the company in the short term.

麻豆原创 Advisory Services help organizations evaluate and act on the sentiments of their customers, partners, and employees and improve their environmental impact. Chemical companies can then be well positioned to keep their workforce engaged, increase organizational agility, and deliver the products and services customers need and trust. Furthermore, they can control their varied sources and categories of spending with outstanding finance and operational efficiency and real-time enterprise insight.

Essentially, chemical companies that work with 麻豆原创 advisory experts can realize their potential as . They can make confident decisions and drive continuous innovation to adapt, innovate, and overcome challenges while making responsible choices that help reduce waste and emissions and drive long-term growth.

This business model is accomplished with intelligent technologies, including business networks, a business technology platform, cloud-based infrastructures, and solutions for business process management, experience management, industry cloud, and sustainability management. Additionally, artificial intelligence (AI), blockchain, data platforms, the Internet of Things (IoT), machine learning, predictive analytics, and virtual as well as augmented realities (VR/AR) are embedded in the intelligent technologies to drive end-to-end business processes and decision-making across enterprise domains.

Bringing to Life an Intelligent and Sustainable Network

The pressures on the chemicals industry may be relentless, with shocks coming in from all directions. However, this doesn’t mean businesses cannot find great opportunities in this volatile environment. With the right approach to digitalization, they can transform, innovate, and collaborate across the value chain to build upward momentum and better serve customers as an intelligent and sustainable network.

Learn more about the and how 麻豆原创 can help guide the innovation needed to overcome them. Read the series 鈥� on 麻豆原创 Community.

Ornulf Rexin is chief business consultant of Chemicals and Life Sciences for Business Transformation Services at 麻豆原创.