Why We Started SecondShop
Our third internally incubated business, SecondShop is transforming and modernizing re-commerce for millions of Canadians.
SecondShop is a vertically integrated re-commerce platform that connects wholesalers, retailers, and consumers in the second market for large purchases like home appliances. SecondShop sources returned or excess inventory from major retailers and then re-sells those products back to consumers with first to market financial technology products. Harvest incubated SecondShop with Founder and CEO, Cedric George, and is the Company’s first and only institutional investor in the Company’s $2MM CAD Series Seed Financing.
To understand why SecondShop is a breakthrough transformation of the re-commerce space, it makes sense to start with a story we are all likely quite familiar with.
Let’s say you move to a new home and order a new sofa online. The sofa arrives and for one reason or another you don’t like it and decide to return it. Like nearly everyone today, you click Return and never think about the product again.
What happens next though is critically important as an inveterate black box of labour, machinery, systems, delivery trucks, warehouses, auctioneers, and liquidators kicks into high gear to extract value from the sofa you just want to forget about.
Highly fragmented and under regulated, the re-commerce space processes 45 million (yes, you read that right) products a year in Canada and while currently worth over $20 Billion CAD in market value, is projected to nearly double in size to over $40 Billion CAD within the next decade.
With a myriad of fragmented salvage operators, the space has struggled to reach mainstream consumers as purchasing experience(s) are nothing short of baffling and Kafkaesque. Don’t believe us? Try watching the CBC’s experience on Marketplace!
And yet, here’s the thing: a generational change is occurring in both how retailers sell their products and how, in turn, consumers purchase them.
Retailers are embracing re-commerce partners as a channel to enable the viability of first market sales in a more competitive marketplace. With online return rates for soft goods now over 40% and close to 15% for hard goods like appliances, retailers’ paper-thin margins are now under extraordinary pressure as return shipping and restocking fees make easy return policies extremely hard to sustain.
Similarly, Millennial and Generation Z consumers are rapidly adopting second market products as their first purchasing option. No longer relegated to thrift and novelty buying, Millennial and Generation Z consumers are considering second use products for hard goods like couches and even refrigerators with 62% indicating that second hand would be their “first choice.”
With these market transformations, we made the decision to build SecondShop with a dual value proposition: a turn-key one-stop shop for national retailers and a new first destination for Canadian consumers for the most important products in their lives.
To deliver on the sophistication of the vision of SecondShop, we have assembled a team that are amongst the top leaders in the space in Canada. With a deep understanding of reverse logistics, the intricacies of retailer relationships, and experience building financial technology, we believe this is the team best suited to deliver on this vision.
The team is led by CEO and Founder Cedric George. One of the top entrepreneurs in Alberta and Canada overall, Mr. George previously bootstrapped Custom Delivery from his home in suburban Calgary and grew the business into the top last mile delivery company in the country working with Costco, Home Depot, Leons, Hudson’s Bay, IKEA, and many other leading retailers. Custom Delivery was acquired in 2019 by Metro Supply Chain after which Mr. George grew the company to $160 Million CAD in revenue. Mr. George is surrounded by a team of experts in the space including Derek Keyes, the former Chief Merchandiser of Hudson’s Bay and Mark Winter, a former executive at Metro Supply Chain.
We’re excited to take this journey with the entire SecondShop team and transform the shopping journeys of millions of Canadians.
