Demand for secondhand fashion is seeing an upward trend that looks like it is here to stay, said Wetzbarger, former chief authenticator at luxury resale platform The RealReal.
“The Covid pandemic created a boom for the resale sector,” he said. “Anytime there is economic uncertainty, people look to liquidate assets to make sure they have cash on hand. They are also a bit more savvy with their spending and looking for a deal, which the resale industry offers.”
Even e-commerce giant Amazon is entering the resale market. Amazon Australia today announced the launch of Amazon Warehouse, a new storefront on the country’s Amazon site, which offers pre-owned and open box items that include a wide range of items, including fashion, electronics, accessories, toys, music, books and more.
“Items are returned to Amazon for many reasons – sometimes a product is just not what a customer is looking for, or perhaps there’s a cosmetic defect or the packaging is damaged,” said Matt Furlong, Amazon Australia country manager. “These items can’t then be sold as new but are still great quality and in good working condition.”
Meanwhile, in just the past week, Etsy has announced plans to acquire resale marketplace Depop for $US 1.62 billion. It demonstrates the strength of the resale industry, said Wetzbarger.
“Little known only two years ago, Depop became a must-have app for Gen Z,” Wetzbarger noted. “This transaction shows that while there is consolidation in the market, it’s not too late for new resale companies, with unique points of view, to enter the space and make an impact.”
The Etsy-Depop deal, which was announced on June 2, is expected to go through later this year.
“Depop is a vibrant, two-sided marketplace with a passionate community, a highly-differentiated offering of unique items, and we believe significant potential to further scale,” Etsy CEO Josh Silverman said.
“We see significant opportunities for shared expertise and growth synergies across what will now be a tremendous ‘house of brands’ portfolio of individually distinct, and very special, e-commerce brands.”
Depop’s community boasts approximately 30 million registered users across nearly 150 countries.
Can Rent the Runway make resale a success?
Several days ago, US brand Rent the Runway also announced its expansion into resale, while foregoing memberships to broaden its reach.
According to sustainability expert Anna Forster, resale is a natural extension of the brand’s current offering, further reducing their garments’ carbon footprint. At the same time, it means Rent the Runway can now resell their items before they become undesirable and are only fit for donation or recycling.
“Rent the Runway has a good chance of making this a success. By leveraging their brand equity in the market, they can become a one-stop shop for the eco-conscious looking for circular fashion and the budget-conscious looking for luxury fashion at a fraction of the price,” observed Forster.
“At the same time, Rent the Runway has distinct operational advantages over traditional consignment second hand stores selling individual items that bring with them the challenge of categorisation and quality assessment. Rather, Rent the Runway will be selling stock they are familiar with, have all the specs for and even have availability in various sizes, which makes it a unique value proposition in the resale market.”
According to Forster, the biggest challenge for Rent the Runway is now competing with luxury clearance outlets such as Rue La La, Gilt or The Outnet, which all sell new, heavily discounted designer fashion.
“They are targeting bargain hunters, so resale items on Rent the Runway will have to be priced below these outlets to be attractive,” said Forster.
“At the same time, it will be challenging for Rent the Runway to attract other traditional secondhand shoppers who are treasure seekers and looking for individual preloved designer items that are not currently still available for sale anywhere else.”
The future of secondhand fashion
Research from ThredUp and GlobalData revealed that the resale market is expected to grow to almost twice the size of fast fashion by 2029.
It also showed the secondhand fashion market was a bright spot in the broader Covid retail slump, with online reselling set to grow 69 per cent between 2019 and 2021, while the broader retail sector is projected to shrink 15 per cent. As of 2020, the online clothing resale market is valued at $28 billion.
Many fashion retailers have now entered the resale market, like the H&M Group’s London-based fashion brand Cos, which recently launched Resell, an online marketplace that provides a platform to buy and sell pre-loved COS clothing.
H&M also invested in online secondhand clothing shop Sellpy in 2015, through its investment arm CO:LAB. The online shop has been a go-to place for secondhand shoppers in Sweden since 2014.
Jeans retailer Levi’s has also launched a resale and buy-back platform Levi’s Secondhand.
Italian fashion house Miu Miu launched a special collection called Upcycled by Miu Miu, which features vintage dresses that are reworked from garments that have been carefully sourced from vintage clothing stores and markets all over the world.
“A decade ago, we thought we knew who the resale shopper was – a money savvy, aspirational woman between 28 and 45, who wants to dress well and buying used is her little secret,” Wetzbarger said. “That has totally dissolved.”
“Everyone shops secondhand now, consumers between the age of 18 and 85, rich, poor, men, and women,” he said.