If you feel like you’re coming across the words “resale,” “recommerce” and “consignment” — all synonyms for the secondary clothing and accessories market — more in these first six weeks of 2020 than you have in the last several years, you’re not alone.
There are a lot of reasons for this. But perhaps the biggest is that consumer behavior is changing quickly, and just about everyone behind the scenes — from big-box department stores to Patagonia-vested Silicon Valley investors — are taking notice. We care about our carbon footprint while still wanting the thrill-of-the-hunt shopping experience. We’re also beginning to care less about long-term ownership: According to a 2019 Resale Report from online thrift store Thredup, the average number of items in consumers’ closets has declined since 2017.
Of course, resale has been around a long time; it’s just that it now feels more ubiquitous than ever. With New Year’s resolutions prompting consumers to shop more secondhand, as well as to make fewer new purchases in general, many more of us — including shoppers and retailers themselves — are gravitating toward the secondhand market.
To help make sense of the rapidly growing space, we compiled this consumer-first primer on the state of today’s resale world. Resale is so multifaceted that we stuck to a topline view, separating this guide into multiple sections complete with gobs of data and expert interviews. We should also note that while resale and rental services are often discussed in the same breath, we stuck to resale in the interest of clarity.
We hope this helps you navigate the wonderfully wide secondhand space, whether you’re entirely new to resale, already Depop famous or, like so many of us, somewhere in between.
How big is resale, really?
Thredup reports that resale has grown 21 — twenty-one! — times faster than the overall retail apparel market in the last three years; the total secondhand apparel market is expected to reach $51 billion by 2023. It’s a bit of a chicken-and-egg scenario: Is resale growing to cater to growing consumer demand, or are consumers shopping more secondhand because there are more readily available options to do so?
Either way, demand for resale options are increasing. The same Thredup study found that 64% of women bought or are now willing to buy resold products. In a GlobalData Survey derived from a sample of 2,000 women (representative of age and income, as well as geographical location), an estimated 56 million women shopped secondhand in 2018, up from 44 million just the year before.
It’s also taking market share from another popular affordable retail option: fast fashion. A GlobalData Market Sizing assessment found that secondhand is expected to grow to nearly 1.5 times the size of fast fashion by 2028. In 2018, the resale market was valued at $24 billion with fast fashion at $35 billion, but the gap is projected to keep narrowing.
And yet, despite all that traction, stigma and skepticism still surrounds secondhand.
“It’s not common vernacular yet,” says Olivia Kim, retail doyenne and VP of creative projects at Nordstrom, which launched its own in-house resale shop, See You Tomorrow, at its New York City flagship and online. (More on that later.) “A lot of people still think of it as dingy, old, vintage, used. One of the biggest lessons for us has been how to continue putting that word out there in a safe way, in a way that people are excited about and energized by.”
So yes: Resale is thriving. But the market could use some TLC so both sides of that chicken-egg hypothesis are fulfilled: that the ever-growing number of secondhand retailers are able to more efficiently appease and acquire consumers, and that consumers can enter the space with more confidence.
Where can you shop resale in 2020?
There are so many platforms through which you can participate in resale right now, and it can be paralyzing for those entering the market for the first time. But it also means there are lots of great options.
Some questions for consumers to ask themselves before jumping in: Are you selling your previously-used clothing and accessories, or buying someone else’s? What, exactly, are you selling or buying? Do you like to shop online, in-person or a mixture of both? How much are you looking to spend?
To figure out what makes the most sense for your needs, read on.
The World Wide Web, obviously!
Like many, Fashionista has been following the rise of online resale startups since at least 2016. In April of that year, two separate digitally-native companies announced enormous venture capital investments: The RealReal raised $40 million in a Series E round, while Poshmark raised $25 million in a Series D. In a fraught retail ecosystem, investors have bet big that more and more people will want to participate in the secondhand clothing and accessory spread as it exists online.
The startup world has become even more rife with resale since that $65 million windfall, with players new and old, luxury and accessible. That also includes (but is not limited to) Fashionphile, Vestiaire Collective, Tradesy, Depop and Rebag swallowing even more funding and with it, more of the clothing and accessory market share.
There are differentiations between each platform, the exact nuances of which are not always immediately apparent to the uninitiated. For luxury consignment, look to the likes of Fashionphile, Vestiaire Collective and The RealReal. (It’s worth noting that the latter has faced some controversy following reports of questionable authentication practices.) Rebag, too, centers around high-end labels, but specializes in handbags. Fashionphile is also accessories-focused, but includes jewelry, watches, belts, gloves and sunglasses among its offerings.
Poshmark, Depop and Tradesy operate more as peer-to-peer marketplaces for buying and selling — think Craigslist for clothes and accessories — than other consignment retailers. Poshmark and Depop consider themselves social shopping apps and encompass a wider range of brands and price points and tend to have audiences that skew a bit younger, while Tradesy centers around luxury and designer contemporary fashion.
…But also your favorite brick-and-mortar retailers.
Resale’s rise is not lost on established retailers, from veteran department stores to direct-to-consumer darlings. A Senior Retail Executive survey found that nearly nine in 10 retail executives want to get into the secondhand market by 2020, and that 96% of senior retail executives want to advance their company’s circular fashion efforts in the same timeframe.
We’re seeing this play out all across the retail landscape. In recent years, a slew of buzzy direct-to-consumer brands like Reformation and Everlane, as well as contemporary and luxury labels like Eileen Fisher and Stella McCartney, have partnered with resale initiatives or even jumpstarted their own programs in-house. At Reformation, customers can resell goods with Thredup to receive brand credit; Stella McCartney shoppers who consign with The RealReal get an immediate $100 credit to shop at Stella stores.
Department stores are following suit. Last April, Neiman Marcus purchased a minority stake in Fashionphile, formally entrenching itself in the resale market in earnest — and giving Fashionphile new legs.
Fashionphile works like this: It purchases pieces it calls “ultra-luxury” (i.e. authentic, nearly-new items from just 50 of the world’s most exclusive brands) upfront from the seller, where the items get further authenticated and priced. With its partnership, select Neiman Marcus locations are now rolling out Fashionphile “salons,” or shop-in-shops in which consumers can sell their pieces and get paid on the spot.
“There’s a lot of quality stuff that people don’t even know how to get rid of or or how to sell,” says Founder and Chief Creative Officer Sarah Davis, who started Fashionphile in 1999 as a way to make some extra cash while in law school. “The whole partnership is just really crazy revolutionary — that you can literally walk into Neiman Marcus with a bag you bought last year and buy this year’s current style with the money you got from that bag, in the same shopping trip.”
Then there’s Nordstrom, which introduced its recommerce initiative, See You Tomorrow, last month. The shop, which is curated by Kim, is as seamlessly elevated as any other Nordstrom experience in that it features the likes of mint-condition, albeit previously-worn, pieces from brands like Ganni, Jacquemus, Acne Studios and Burberry, at a discount.
Kim explains that most of the product in the space comes from Nordstrom’s own National Quality Control. Nordstrom tapped two partners for the tricky backend operations, including cleaning and repairing of product, inventory processing and fulfilling and pricing and authentication. The first, Yerdle, is a technology and logistics startup that “white-labels” recommerce for brands like Eileen Fisher, Patagonia and REI. The second is Entrupy, a technology-based authentication platform for luxury handbags.
What makes resale such a big deal lately?
Well, to start, the ongoing climate crisis.
According to data from the Ellen MacArthur Foundation, we’re buying twice as much clothing as we have since 2000, but only wearing it for about half as long. One garbage truck of textiles is landfilled or incinerated every second — it’s not just Burberry. By 2050, the textile industry will account for a quarter of the global carbon budget. This poses a grave danger to our planet.
Resale isn’t the magic pill that can cure fashion’s waste epidemic. If we were being really, truly sustainable, we wouldn’t be buying anything at all. But resale does bolster a more circular economy, particularly if it occurs on a systemic basis. To quite Francois Souchet, the lead of the Ellen MacArthur Foundation’s Make Fashion Circular initiative, “Raising the average number of times clothing is worn is the most direct way to design out waste and pollution and capture value.”
Green Story Environmental Study did the math: If every person in the U.S. bought just one used, instead of new item this year, we would save 5.7 billion pounds of CO2 emissions, 25 billion gallons of water and 449 million pounds of waste. As consumers — particularly those millennial- and Generation Z-aged ones — are paying closer and closer attention to their own waste patterns, they’re taking a new kind of ownership over their behavior.
“Sustainability has given a lot of people permission to participate in the secondary market who otherwise, for whatever reason, weren’t doing it before,” says Fashionphile’s Davis. “Resale is giving millennials who would rather shop local permission to say, ‘Yeah, I do want that Chanel bag because it’s pre-owned, and by the way, I can share it with six other people when I’m done.’ Then you get some older people who are like, ‘Oh, I would never go to a consignment shop, but I care about the environment, too.’ It’s giving everybody permission to say, this is the right thing to do.”
It is becoming such a point of interest that new businesses are cropping up to connect retailers with the secondhand market. Digital entrepreneur Stéphanie Crespin launched Reflaunt in March 2019 to enable luxury brands to participate in resale themselves and offer incentives to their customers like store credit for resold items. Reflaunt is also backed by Kering, with additional support from capital-F Fashion heavy-hitters Balenciaga CEO Cedric Charbit and fashion editor and stylist Giovanna Battaglia.
What’s next for resale through 2020 and beyond?
According to Kim, the next stage of resale will be about normalizing it to the point that every brand and retailer gets onboard, rather than treating it as a novelty for a select few.
“I hope in the next five years there are more and more brands entering resale,” says Kim. “Stop denying the fact that resale is happening. This idea that multiple business models of retail can co-exist is really exciting to me. You’re attracting a younger customer. You’re giving clothes a second and a third life. You’re also validating the value of a brand-new product to a full-price customer — because at full price, that customer is like, ‘Should I buy that bag? Well, I know that in five years it still holds its value. So, yes, I feel like I’m making a safe investment.'”
How can the notion that new and secondhand don’t cannibalize each other be more deeply impressed on business leaders? Some big-box retailers are working on it.
“We believe pre-owned serves as a gateway to increase luxury purchases,” Liz Allison, Neiman Marcus’s chief transformation officer, wrote to Fashionista in an email. “Neiman Marcus is not only offering sellers cash for their luxury items, but we’ve expanded payment options to include an increased buyout price for those who opt to receive payment in Neiman Marcus gift cards. This encourages customers to use the money made from selling their pre-owned luxury pieces to invest in new ones.”
For brands looking to enter the resale space, that’s really where a service like Reflaunt could come in. Consumer behavior, though, yields more influence than any of us may comprehend. Shoppers are now participating in secondhand for a myriad of reasons — be it a lower price or a lower carbon footprint — and are doing so in bigger numbers than ever. And finally, there is a robust market to support them.