Anyone notice the stream of traditional brick-and-mortar retailers that have announced plans to launch their own rental and resale services? We have. The growing popularity of online resale marketplaces such as thredUP, Poshmark and The RealReal, combined with traditional retailers getting in the game like Urban Outfitters, is enabling resale to grow 21 times faster than retail.
What is driving this activity?
- Is it opportunity? Analysts believe the “recommerce industry” is expected to double in size over the next five years. Retailers are seeing this services territory as a way to reach new, younger consumers.
- Is it the consumer’s desire for more sustainability and consumer mindfulness? Sustainability tops the list of things Millennials are looking for from the products they buy and the brands they support.
- Is it “frugalicious” Millennials who crave upgrading of goods without the traditional stigmas? According to thredUP, 13 percent of its most active thrifters are millionaires. The stigma of resale shops offering less than the best clothing is gone, and the trend is going mainstream.
The 2019 state of the resale market report from thredUP (in partnership with GlobalData Retail) projects that the industry will be worth $51 billion by 2023 and that one in three Gen Z shoppers will buy used clothing this year, compared with less than one in five Gen X shoppers.
Whatever the core driver, what is clear is that retailers are turning to resale to get customers to buy from them more regularly. When announcing their respective partnerships with thredUP, both Macy’s and JCPenney executives said they believe that introducing dedicated resale sections in their stores — where the product selection is refreshed more frequently — will get customers to visit them in-store more often. It is all about traffic and volume.
Contributed By: Scott Hauman, SVP Director of Insight & Strategy
Image Source: Unsplash
