The retail apparel industry is currently witnessing a sea change, with the emergence of new trends and drastic alterations in shopping preferences. “Reuse” and “Reinvent” are the new mantras driving customers’ shopping habits when it comes to apparel. Is this an end to the stigma around second-hand products? Let’s find out.
Second-Hand Clothes Picking Up Fast
Second-hand clothes not only come for bargain prices but are also an emerging alternative to fast fashion. In this context, the market for used clothing is on the rise, accounting for a large share of the total retail resale market, as fashion trends keep coming back. Clearly, affordability and abundant availability are driving the demand for second-hand apparel. Clearly, consumers facing budgetary constraints are opting for resale products.
Per a report by thredUp, roughly 64 million people purchased second-hand goods in 2019, which led to 25 times faster growth than the overall retail market.
Companies in the apparel resale space are taking to social media and online advertising to attract millennials toward online fashion reselling platforms. Moreover, many prominent public figures including Kate Middleton, Tiffany Haddish and Kim Kardashian have been clicked donning second-hand or vintage outfits, thus influencing the young generation to embrace second- hand fashion faster than any other age group. Also, smartphones are playing a key role in expanding the customer base, allowing the platform users to photograph, pack and send their discarded clothes, and even track the process. The online second-hand resale market is touted to grow to the tune of 69% during 2019-2021.
With the coronavirus pandemic restricting consumers’ movements, traditional stores have been badly hit resulting in temporary store closures and bankruptcies. Also, given the recent economic crunch consumers are likely to opt for inexpensive options if they at all shop. In fact, thredUp’s 2020 resale report reveals that almost 79% of customers are planning to cut down on their clothing budget in the next 12 months.
Fore-Runners in the New Wave
The RealReal, thredUP, Poshmark and Vestiaire Collective are some of the emerging players in this market. Notably, The RealReal is the only luxury resale brand in the lot, which offers high-end labels like Burberry, Alexander McQueen and Versace for upscale shoppers. ThredUp highlighted in its annual report that the second-hand apparel market is anticipated to reach $64 billion within the next five years from approximately $28 billion valued currently.
Major U.S. retailers have also stepped up their retail game by joining the second-hand clothing bandwagon. Notably, Macy’s M, Gap GPS, Abercrombie & Fitch ANF and Walmart WMT have collaborated with thredUP to stay relevant among shoppers. Macy’s has launched 40 thredUP pop-up shops within its stores where American Eagle and Victoria’s Secret brands are available at discounted prices.
Walmart is now selling used women and children’s clothing along with accessories, handbags and footwear from brands like Calvin Klein, Coach and Nike on thredUP’s website. Gap is the latest retailer to join the roster, with its recent partnership with thredUP. As a result, thredUP’s Clean Out bags or labels will now be available at certain Gap, Banana Republic, Athleta and Janie and Jack stores.
In an attempt to stand out, Nordstrom JWN made its debut in this space by launching its resale shop —“See You Tomorrow” — wherein customers can buy used apparel online and at its latest flagship store in New York. We note that Abercrombie & Fitch, Gap and Nordstrom are offering credit or gift cards in exchange for used clothes.
Resale Vs Fast Fashion: The Way Forward
Resale companies are now seen as the biggest threat to traditional retailers. In this context, resale is envisioned to increase five-fold, while the retail market is expected to hit a rough patch by 2024, per thredUp’s 2020 report. Moreover, the report highlighted that the share of second-hand goods in a person’s closet will rise to the tune of 17% by 2029 as compared to 7% in 2019.
Evidently, the future of the resale market looks promising on the back of factors, including rise in millennial spending, macroeconomic challenges and consumers’ evolving preferences.
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