Croissant, a FinTech platform that helps consumers realize the resale value of eCommerce purchases, has launched with $24 million in funding.
According to a Thursday (July 27) news release, Croissant integrates into merchants’ platforms and offers customers a guaranteed buyback value on their goods at checkout, boosting conversion and average order value.
“Croissant’s data science and AI tooling generates the guaranteed buyback values offered to customers, and Croissant fulfills those guarantees,” the company said.
“Post-purchase, items become liquid assets within customers’ Croissant accounts that they can later sell with one click. Once customers have sold their items, they are directed back to merchants with new funds to power future purchases, making for higher retention rates and lifetime value.”
The company says Croissant was developed “partially in response to consumer debt-focused offerings,” and is designed to amplify users’ purchasing power while helping businesses improve conversation and customer retention.
“When users later elect to sell, Croissant deploys its exclusive multiple listing technology to handle the tedious resale process within the existing secondhand ecosystem with no involvement required from merchants or customers,” the company said.
The company is launching at a time when the resale initiative is facing a number of challenges, as noted here earlier this month.
For example, after being in operation for 12 years, The RealReal has yet to reach profitability, while other brands and retailers have observed the popularity of resale and are embracing it.
“This leads to the question of whether the efforts put into resale initiatives are truly worthwhile,” PYMNTS wrote.
While consumers exhibit a desire for sustainable and cost-effective shopping options, obstacles such as an overcrowded resale space, inflation, and the resumption of student loan payments, all pose roadblocks to the growth of resale. Beyond that, resale endeavors often require higher overhead costs while yielding limited returns.
“Resale initiatives, while potentially beneficial in the long run, often require significant upfront investments,” PYMNTS wrote. “Establishing a successful resale platform involves infrastructure development, operational costs, marketing efforts, and acquiring inventory.”
And in a struggling retail market, where many retailers are already wrestling with dwindling sales and thin profit margins, investing in resale can be a big gamble.
In addition, brands and retailers must also consider the potential cannibalization of their primary sales channels. By advancing resale, they risk diverting customers away from purchasing new products at their full price.