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Barbara Farfan

Retail Resale Trend Growth Tests Reselling Boundaries - Google, Tesla and TheRealReal Redefine Reselling and the Recycling of Retail Goods (GOOG)

By April 27, 2013

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Retail resale is one of the fastest growing trends in the industry and the boundaries of reselling have been rigorously tested, defined, and redefined this month by the retailers that are working hard to carve out their own retail resale niche. The growth of retail resale is a real and present threat to the retailers of any kind of new merchandise as consumers are becoming more willing to forego the purchase of new products to participate instead in a retail reduce, reuse, and recycle program.

Not all members of the U.S. retail industry view the growing retail resale trend as a threat, though. Innovative members of the retail industry are finding ways to fashion new retail businesses around resale transactions, and in the process, are redefining what retail resales are and what they will be in the future.

Will Google Glass Resale Restrictions Lead to a Retail Resale Court Battle?

The right to resell seems like one of those free enterprise inalienable rights that should be protected by the U.S. constitution - life, liberty, and the pursuit of buyers for our unwanted stuff. So it was big news this month when the first generation of Google Glass started shipped to the software developer "Glass Explorers" - a/k/a unpaid Google invention beta testers - along with a threat issued from Google to its Glass guineas. No lending, no gifting, no sharing , and absolutely, positively, without exception no reselling of the limited edition of Google Glass will be permitted under penalty of deactivation death.

Plug in, Google Borg. Resistance is futile.

Given the "first-sale doctrine" that exists in the U.S., it doesn't seem that Google has the legal right to make any kind of demands about what Google Glass owners do with their $1500 toys once they've been delivered. Undoubtedly the Google legal team defined their resale loophole before the Google Glass user terms were drafted. But we won't really be surprised when we read the headlines that this Google retail resale restriction is being challenged in court, will we?

Retail Resale Ruling for Digital Products

And speaking of testing the boundaries of retail resale in court, a major case did just that this month.

The retail resale of books, CDs and DVDs was happening long before Amazon.com was a twinkle in Jeff Bezos' eye. So it seems only logical that as the delivery format of these media has shifted from physical to digital that the retail resale would shift as well. Not so, according to a Manhattan judge who ruled this month that the resale of digital files involves making a new copy, which is a clear violation of U.S. copyright law.

Redigi.com is the brave company that is willing to try and change the rules about the retail resale of digital products. But it is unlikely that the shift will occur until one of the heavyweight rule breakers - Amazon or Apple - engages in the battle.

So now that the courts have ruled (once again) that digital retail resale is an illegal and punishable offense, the question remains... Why is there still such a thing as Bit Torrents?

Fourteen Million Reasons Why TheRealReal is a Retail Resale Real Deal

TheRealReal.com carved out a bigger niche for itself in the luxury fashion resale market after it secured $14 million in funding this month for technology and infrastructure expansion. Reportedly TheRealReal has 750,000 members who are buying and selling authenticated luxury designer merchandise in numbers that are good enough to attract a $14 million investment.

The RealReal has challenged the hands-off buyer-beware free-for-all knockoff resale platform that eBay operates by taking possession of the luxury items that members want to sell so that each item can be authenticated and appraised. Merchandise returns and customer service reps are two more features of TheRealReal resale experience that shoppers can't get from the eBay corporation, and can only hope they get from eBay sellers.

If you believe the criteria that's used to compile the annual Best Internet Shopping Customer Satisfaction list, then it's obvious that the changes to luxury fashion retail resales made by the leaders of TheRealReal are the real deal.

Tesla's Redefinition of Retail Resale Causes Car-Buying Customers to Question Everything

In addition to shaking up the auto dealership franchise laws in the U.S., the upstart CEO of Tesla is also rocking the retail auto industry with its guaranteed resale value program. As part of a financing deal with Wells Fargo and U.S. Bank, Tesla announced this month that it is guaranteeing the resale value of a 36-month old Tesla Model S, to be calculated as a percentage of the original purchase price. Tesla's guaranteed resale strategy is just one more reason that Elon Musk probably has very few friends in Detroit or Japan.

Inherent in the Tesla guaranteed resale value strategy is a strong belief about how the Model S will stand the test of time. Considering that the first retail sale of a Tesla Model S was less than a year ago, this says a lot about how Tesla leaders view their own engineering. Which leaves consumers wondering if the lack of a guaranteed resale program from other carmakers says a lot about how those companies view their own engineering.

On the other hand, conservative legacy auto-making companies may just be unwilling to take a resale risk in a volatile foreign oil-dependent U.S. economy. Fair enough. But the question-everything business tactics of Tesla will no doubt lead consumers to do more of the same - question everything. And once customers start asking questions, auto retailers are going to have to come up with satisfying answers pretty quickly.

My prediction is that it will be less than a year before Tesla's influence transforms retail auto sales in the same way that Apple transformed retail in-store sales. And that won't be a bad thing for anybody except the old school guardians of status quo who just refuse to see the new retail world order through Google-colored glasses.

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