Shopping second-hand is certainly not a new concept.
From charity shops to eBay, consumers have always been keen to bag a bargain.
Consumers are also increasingly keen to reduce their own consumption, and to help combat the negative impact on the environment. This has led many retailers to enter the ‘recommerce’ market (sometimes referred to as ‘resale’ or ‘reverse commerce’), which refers to the buying and selling of pre-owned goods.
Here’s more on the concept of recommerce, particularly within fashion, and some of the most successful examples in the space.
Shift in consumer behaviour
Research by Ernst and Young suggests that it is younger generations who are pushing retailers to take more responsibility for the impact that their business has on the environment.
The ‘Next Big Disruptor: Gen Z’ report states that the key differentiator between Millennials and Generation Z, “other than their age, is an element of self-awareness versus self-centeredness, meaning the younger gen places a greater emphasis on their role in the world as part of a larger ecosystem and their responsibility to help improve it.”
This means that – instead of accepting the limited pool of sustainable retailers available to them – Generation Z are actively seeking out alternative options, mainly in the form of resale sites and apps. Examples like Depop, ThredUp, and Poshmark all allow consumers to buy second-hand clothing.
As well as offering different price points, they also share the over-arching aim of being more sustainable, and helping to reduce the amount of textile waste entering landfill sites.
Of course, it’s not only younger generations who are ethically-minded. According to ThredUp’s Resale report, there are more second-hand shoppers today than ever before, with 64% of women buying or being willing to buy pre-owned clothes. Moreover, 59% of overall consumers expect retailers to create clothes ethically and sustainably. As a result of this, the total secondhand apparel market is expected to double in growth in five years to reach $51b.
As well as caring about sustainability, it’s also been suggested that Generation Z’s ambition and desire for success is fuelling the rise of re-sale apps. This is because, in the case of Depop and Poshmark, re-selling fashion can turn into a profitable business venture. Vintage and niche clothing in particular is highly sought-after, meaning sellers can earn thousands of dollars on these apps. Rachel Swidenbank, vice president of marketplace at Depop, told Business Insider that some can earn up to $300,000 a year, enabling them to buy houses and cars before they’ve even reached university.
Indeed, with 62% of Generation Z stating that they would like to start their own companies rather than work for an established business – apps like Depop now provide them with the tools to be able to do so within fashion.
Another trend that’s boosted the resale market is the desire to be continuously seen in new clothes; heightened by social media platforms like Instagram, and the pressure to emulate or keep up with fashion influencers. Interestingly, this has also created what’s known as the ‘serial returner’, i.e. consumers who continuously return items after wearing them once for social media. However, with retailers now cracking down on this kind of behaviour, consumers are increasingly looking to resale for a more viable way of keeping up with fashion trends.
Another draw for consumers is that – if they aren’t buying brand-new – they are able to afford higher-end or luxury clothing that has been marked down in price. The RealReal is one of the biggest resale retailers to tap into this, offering consumers – particularly first-time luxury consumers – an affordable gateway into designer fashion.
It’s difficult to tell whether this is the biggest draw for The RealReal customers, or indeed whether people are mostly buying for ethical reasons. Not that it matters too much, of course, as The Real Real’s business model still feeds into the circular economy regardless, whereby waste is eliminated due to the reuse of items.
This also taps into a much bigger problem within the fashion industry, too, which is overproduction and wastage of unsold stock. There have been a few high profile examples of this, such as Burberry, which was widely criticised in 2018 for reportedly destroying £26.6 million worth of products rather than selling them at a lower price.
Since, Burberry has pledged to stop incinerating its overstock. It also announced a new partnership with luxury goods company, Elvis & Kresse, to transform at least 120 tonnes of leather off-cuts from Burberry items into new clothing and accessories.
Other luxury retailers are also taking steps to prevent waste. Farfetch, for example, has launched its ‘Second Life’ initiative, which allows users to sell unwanted designer handbags in exchange for FarFetch credit. Other designers, like Stella McCartney, are partnering with resale business models (in this case, The RealReal) to promote the re-sale of its items.
It’s not just luxury brands or marketplaces who are dominating recommerce. Recently, a number of large and existing retailers have launched their own initiatives, cementing the fact that resale is slowly becoming mainstream.
ThredUp has launched concessions in large brick-and-mortar retailers, Macy’s and J.C Penney. Meanwhile, many brands including Patagonia, REI, and Taylor Stitch have partnered with Yerdle, which is a white label service that repurposes old products for resale (as refurbished). This means that – instead of creating business for other marketplaces like Depop – these brands are able to take ownership of their own resale vertical and feed it back into the wider business.
For Patagonia, its ‘Worn Wear’ initiative has cemented its reputation as a ‘belief-driven’ brand – one that discourages consumerism and encourages ethical buying. In some ways, this notion seems at odds with a retail company that introduces a vast array of items into its inventory each season, and still encourages customers to spend through clever marketing.
That being said, it’s a contradiction that the fashion retail industry is always going to have to contend with; Patagonia’s many social and environmental initiatives merely help the brand to convey its own sense of accountability. In turn, it is able to connect with similarly-minded customers.
With more and more consumers showing the desire to buy from companies that reflect their own beliefs and values, perhaps it’s only a matter of time before other retailers catch up.