There’s no shortage of innovation powering the growing fashion resale market, but brands and retailers still don’t grasp how consumers really feel about buying secondhand, data shows.
While 68 percent of consumers say that they would pay more for sustainable products, 66 percent of retailers don’t believe shoppers are willing to spend more for sustainable brands, according to First Insight’s report with the Baker Retailing Center at the Wharton School of the University of Pennsylvania.
According to Returnity CEO Michael Newman, circularity’s challenging learning curve might be keeping some brands and retailers from taking the plunge.
“It’s been hard for companies to accept that there’s no silver bullet here, that this is really going to be complicated. That’s sort of the enemy of starting off—brands don’t really know where to start, so they don’t start,” said Newman, whose company offers reusable shipping and delivery packaging systems, at the NRF Big Show last week. “But the longer you wait, the longer it’s going to take. We’ve had clients where it’s taken two years before we’ve gotten a project finally live in front of customers, and that’s a pilot with 300 mailer boxes.
“But that made the organization do the work to get behind it, get organized and get it right,” he added. “And then it went from 300 to 3,000 to 300,000. It happens when you start—you have to start though.”
Starting small keeps brands and retailers from getting overwhelmed, according to Karin Dillie, vice president, partnerships at Recurate, a “resale-as-a-service” platform provider.
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“We can actually start doing some incremental things that move the needle to start engaging your customers,” Dillie said. “You can start getting feedback on it, you can iterate on it and you can expand these programs. You really can just build from there.”
Recurate, a partner to Outerknown and Mara Hoffman, recently set up branded re-commerce sites for Steve Madden and Dolce Vita. The company integrates its own software directly into the front end of the brand’s website without interrupting the branded experience, while handling back end details like integration, shipping and customer service. Setting up Amour Vert’s “ReAmour” resale marketplace took just six weeks, Dillie said.
Brands must recognize that engaging in sustainability, whether through eco-friendly packaging, raw materials transparency or a new “re-commerce” model, typically requires new and nuanced skillsets.
Companies might be used to selling first-run goods “but now you’re selling circularity,” which is about “behavior that happens post purchase, and that’s different,” Newman said. “Within your organizations, you’re used to measuring on lifetime value—’When’s the next time they’re coming to my site to buy another thing?’ This is a different type of consumer engagement. And so I think that sort of skill of understanding our customers, understanding how they engage with the brand post purchase, and how we keep them in as part of the circular journey is going to be a really important skill.”
What’s more, stakeholders in the value chain must be on the page about circularity goals, but that’s often easier said than done. CircularID protocol developer Eon launched a partner network in 2020 to help get companies including Recurate, Lenzing, Optoro and Evrnu thinking the same way about managing, directing and tracking the flow of garments across the value chain.
“All of the work that you’re doing as an organization and as a brand is hugely important,” said Elyse Tosi, senior director, accounts and client success for Eon. “We need to have a voice and a channel to speak both to the consumer and to your partners, because it’s also about the ecosystem that brands are building. You can’t do this in silos—none of us can. It’s really knowing and finding tools to connect, because collaboration is really how we’re going to move the needle.”
Resale’s acceleration isn’t stopping
Fashion resale’s continuing momentum positions the secondhand business as a big part of the circular economy in the years ahead. Experts agree that stakeholders can’t ignore the growing opportunity in resale.
The secondhand apparel, footwear and accessories market already reached $30 billion to $40 billion, according to an October 2020 survey by Boston Consulting Group, which estimates 15 percent to 20 percent annual growth over the next five years. Meanwhile, ThredUp’s annual forecast from June projects a $53 billion secondhand and resale market by 2023, accounting for $27 billion in resale and $26 billion in traditional secondhand channels like thrift and donation.
Dillie, who said she “banked her career” on resale, sees a wealth of opportunities on the horizon.
“If you think about it, there’s only so much new that’s produced every year. And all of that is sitting in all of your closets,” she said. “There’s really a depth of supply in the closets right now that resale can grow from.”
However, brands looking to jump on the resale bandwagon must understand what consumers really want. For example, while 46 percent say that they prefer to purchase and sell fashion through the brand or retailer themselves, only 22 percent of merchants are aware that shoppers prefer this option. As many as 41 percent of consumers say they already shop at brand resale programs, such as those offered by Patagonia, Lululemon or Levi’s, First Insight’s survey found.
Separately, Trove CEO Andy Ruben sees “brands, stores and luxury as three trends in recommerce that will play out this year.”
Brands, he said, “are very tired of handing their best customers over” to marketplaces like The RealReal, ThredUp and others. “The sector is big enough. They are bringing that back in house,” he continued, and “I think it’s insane that it’s gone on this long.”
What’s more, retailers—like Madewell—that take back and sell secondhand items in store see a “10X” bump over online-only programs, said Ruben, whose startup powers resale for REI and Levi’s and was behind Nordstrom’s See You Tomorrow initiative.
And Ruben believes high-end brands’ resistance to resale will crumble, and quickly—especially with a money-making opportunity stake. “We have talked for so long and many people have written about why luxury is not owning [its] narrative and [its] heritage in this secondary market and we will see that shift this year,” he said.
Additional reporting by Jessica Binns.