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 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 its $2MM CAD series seed financing.
To understand why SecondShop is a breakthrough, start with a story we all know. You move to a new home and order a sofa online. It arrives, you don't love it, and you click Return — then never think about the product again. What happens next is critically important: 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.
Highly fragmented and under-regulated, the re-commerce space processes 45 million (yes, you read that right) products a year in Canada. Currently worth over $20 billion CAD, it is projected to nearly double to over $40 billion CAD within the next decade. Yet with a myriad of fragmented salvage operators, the space has struggled to reach mainstream consumers — purchasing experiences are nothing short of baffling and Kafkaesque. Don't believe us? Watch the CBC's experience on Marketplace.
And yet a generational change is occurring in both how retailers sell and how consumers buy. Retailers are embracing re-commerce partners as a channel that keeps first-market sales viable in a more competitive market: with online return rates for soft goods now over 40% and close to 15% for hard goods like appliances, paper-thin margins are under extraordinary pressure as return shipping and restocking fees make easy return policies hard to sustain.
Similarly, Millennial and Gen Z consumers are rapidly adopting second-market products as their first purchasing option. No longer relegated to thrift and novelty buying, they now consider 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 built SecondShop around 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.
The team is led by CEO and founder Cedric George — one of the top entrepreneurs in Alberta and Canada overall, who bootstrapped Custom Delivery from his home in suburban Calgary into the country's top last-mile delivery company, working with Costco, Home Depot, Leon's, 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. He is surrounded by experts in the space, including Derek Keyes, 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.