A Look Behind the Rise of Resale and Sustainable Ecommerce
The retail industry is changing. NYFW this year looked decidedly different than years past, and retail giants from department stores to fast fashion are facing a historic decline. Even before the COVID-19 pandemic hit, big chain stores were facing bankruptcy and disclosures. People have been decrying the death of retail for years.
But is retail really dead, or is it just transforming? Forbes argues that the old version of retail is boring, and the Harvard Business Review agrees that successful physical retail must create an experience for the customer. The COVID-19 pandemic and economic fallout will certainly affect the future of the retail industry.
But there is one trend that’s held steady during years of the “retail apocalypse” and has proven adaptable to the new normal; resale. As traditional models decline, the resale market continues to grow.
The rise of resale
Secondhand markets have been experiencing a steady incline over the last few years. In 2017, ThredUp’s annual market and trend report valued the apparel resale industry at $18 billion. In 2019, that number jumped to $28 billion.
What caused the resale market to grow by $10 billion in just three years? ThredUp’s data suggests it’s being driven by Millenials and Gen Z shoppers, who are more likely to care about the climate crisis and less likely to associate secondhand shopping with a negative stigma. This shift in culture isn’t exclusive to younger folks, though. The rise in popularity for thrifting and vintage has enticed older generations and traditional retailers to cash in on the trend as well.
Having grown up reading extensive reporting on the environmental impacts of buying new stuff, a greater general consensus on climate science, and easily accessible information through social media, Gen Z shoppers are decidedly sustainability savvy. With the more climate-aware youth gaining purchasing power in the next few years, eco-friendly, ethical, and secondhand goods will be the first choice for conscious consumers.
It’s clear that resale is no longer just a trend. With all of these shifts occurring, CNN predicts that the secondhand market will grow to twice the size of traditional retail by 2028. Shoppers are expected to choose resale over all other channels within the next five years, by which time ThredUp expects the market to hit $64 billion.
Resale and ecommerce in the age of COVID
Secondhand markets have been growing for years, but they’ve jumped significantly since the beginning of the COVID-19 pandemic. Online resellers like ThredUp and The Real Real have been thriving during the pandemic. People are stuck indoors, looking to declutter and make more space in their homes, and as the global health crisis places additional financial stress on families, more and more people are turning to secondhand as an affordable alternative.
But not all resale is created equal. While online resale markets are growing, in-person thrift stores and local vintage spots are experiencing the same challenges as the rest of the physical retail industry. Health concerns, outdated shopping experiences, and lack of accessibility for more at-risk customers have driven people out of stores and into ecommerce digital spaces.
According to a study conducted by McKinsey, the reinvention of retail lies largely in digital. Their data shows that the number of customers shopping online experienced 10 years worth of growth in just three months. They found that ecommerce sales went up 30% between mid-March and mid-April this year, recommending that brands invest heavily in digital channels as this trend is likely to continue even after the pandemic has run its course.
When it comes to traditional retail versus digital, the experts agree that ecommerce is crucial for the future of shopping. In order to survive and thrive during the current shift in retail, brands must focus on having a robust digital presence and creating holistic shopping experiences that foster customer loyalty.
What does this mean for brands?
As they traverse this changing landscape, brands must keep customer loyalty in mind first and foremost. Sustainability and exciting online experiences will be key for building customer relationships and establishing long-term brand loyalty.
With Gen Z shoppers driving the conversation around sustainability and circularity in fashion and consumer goods, customers will expect to see brands sticking to these values. It’s no longer enough to produce eco-friendly fashion - brands must be responsible for the entire lifecycle of the products they make.
As defined by the Ellen MacArthur Foundation, the circular economy is a restorative and regenerative solution to the take-make-waste extractive economy we have today. Circularity can take many different forms, including designing products that will biodegrade at the end of their life, or designing systems that will recapture and enable the reuse of products indefinitely.
Circular fashion has been championed by some of the biggest players in the industry, including Stella McCartney and H&M. These big brands have the resources to fund massive textile recycling initiatives, but you don’t have to operate at the multinational scale in order to incorporate circularity into your business.
Some brands, like Madewell, are starting to dip their toes in the resale market by partnering with third-party sites to produce special secondhand collections. Reformation has partnered with ThredUp to reclaim old clothing from their customers, and a number of other brands have implemented similar takeback and clothing recycling programs. Others seek circularity in the design process, by creating zero-waste or recycled garments.
Here at Recurate, we believe that brands can be empowered to recapture their own used inventory to create a circular sales economy that benefits the planet, the customer, and the brand. For many fashion companies, their products are probably already being re-sold on platforms like Ebay, DePop, and Poshmark. Rather than losing sales to these third party retailers, why shouldn’t brands recapture their own used inventory and resell it? This would not only allow brands to be more sustainable, it would also make them more accessible to eco and budget-conscious customers.
Resale is not only the most eco-friendly option, it’s also a smart business decision for big and small brands. The problems created by fast fashion and overconsumption can’t be solved by governments or nonprofits alone, and every business has the power to make a difference. With more brands participating in resale, together we can engage more customers and divert millions of products from ending up in the landfill and polluting our planet.