Millennials and Gen Z are leading the rise of resale fashion marketplace
Second hand clothing used to be an arena restictred to thrift shops, hipsters, flea markets or e-Bay. Today, led by the behaviour of Millennial and Gen Z consumers. the situation has changed drastically.
Last year more people than ever have shopped second-hand: in the US only 56 million women bought secondhand, versus 44 million in 2017 and 35 million in 2016.
The resale market is today worth $ 24 billion, and it is expected to reach $ 51 billion by 2023. This market’s growth is something disruptive for the apparel sector, where resale has grown 21 times faster than classic retail over the past 3 years.
The main reasons leading this incredible growth are to find amongst Millennials and Gen Z consumers’ characteristics, the range of population that adopt secondhand items 2.5 times faster than any other consumer.
These two groups of young consumers share some features that revealed to be crucial in the growth of the resale and second-hand market.
Fashion is today the second most polluting industry in the world, following only the oil business. Other than that, it is also known for its not-so-ethical practices regarding workers’ conditions. (Pretty sure Rana Plaza disasterrings a bell.)
2018 has been the year of a collective awareness of the environmental issue, and 72% of consumers today prefer to buy from ethical and sustainable brands. But if once ethical shopping was considered something with a pretty high price point, today, just by reselling and/or buying something secondhand we can extend the lifecycle of the items and reducing their environmental impact. This practice ensures that products circulate in the economy longer before hitting the landfills, helping justifying all the raw materials and labor deployed in the manufacturing process.
At the same time consumers today, Instagram users in particular, feel the need to change their outfit more often, they do not want to be seen more than twice wearing the same item.
The be seen here refers mainly to online followers: in the glossy Instagram world, nobody ever wear the same piece or propose the same combination twice.
There are numerous reasons for the recent rise of resale, including environmental benefits and the desire for frequent turnover of wardrobes especially among the Instagram generation.”
– The Raymond James Financial Center, “Rise of the Fashion Resale Marketplaces” 2019
In fact, 56% of 18–29 years old prefer retailers that offer new arrivals every time they visit the store or the e-store.
Yes, it definitely contrasts with the environmental worries, but hey, life is full of contradictions! At least the second hand market gives the opportunity to buy something new without creating a negative impact on the environment.
Need for uniqueness
Millenials and Gen Z alike are generations that value the individual and consider fashion as way to express their own personality. Thrift shopping guarantees them the uniqueness of their own style. Most of the pieces in a secondhand shop are one of a kind, and they let endless possibilities of matching and styling in a creative and unique way.
Drop of the taboo
The need of owning something forever is disappearing and in general people feel less weird about wearing something someone else wore before them.
“I do think that the rise of the sharing economy has also helped — it’s taken the stigma out of resale and removed the need to own something forever,” says Levesque, The RealReal’s chief merchant.
Style: nostalgia trend
This element is probably less incisive than the others, but our generation’s obsession with nostalgia and the current fashion trend recalling everything 90es, definitely help in pushing vintage and second hand sales. Even if retailers and streetwear brands are redesigning collections that seem copy-and-paste from the mid-90s catwalks and streetstyle pictures, the authenticity of buying the original piece in a thrift store is still difficult to replace.
Quality of garments
Not only the feeling, style and uniqueness of secondhand pieces play an important role in the choice, the quality of vintage garments is considered better than the fast fashion options of today.
Marie Kondo mania
I think there’s no need to explain who Marie Kondo is. The guru of organization and decluttering, author of the book “The Life-Changing Magic of Tidying Up” and now host of the successfull serie on Netflix “Tidying up with Marie Kondo”. Her philosophy is based on the idea that putting things in order allows you to feel more confident and gives you “the energy and motivation to create the life you want.”
Lots of people do not simply throw away the items that do not spark joy and that do not want to see in their wardrobe anymore, they often give them to second hand stores or try to sell them through the several apps proliferating in the market.
Because yes, the resale online scene is really getting really crowded. If we wanted today to sell something from our wardrobe we would probably be spoiled of choice.
Gone are the days of e-bay as the only e-marketplace to sell and buy used staff, startups and companies specialized in the resale market are growing in numbers and revenues.
The US leader company in resale is ThredUP: founded in 2009 as a pilot for peer-to-peer online sharing of men’s shirts, it is now the world’s largest online marketplace to buy and sell women’s and kids’ secondhand clothes.
They take care of everything, the only thing you have to do is “order a Clean Out Bag and refresh your wardrobe. Fill it up with like-new women’s and kids’ clothes. Earn a little cash or credit.”
Other giant of the sector is The RealReal, one of the largest luxury online consignment stores in the US.
Last year the company had raised $115 million in a Series G financing round, bringing The RealReal’s funding to a total of $288 million. Thanks to its 9 million members and its current statistic of more than 8 million items-sold, the RealReal is estimated to be generating more than $500 million in annual revenue, although it is not yet profitable.
The RealReal competes with others luxury resellers as Rebag and Poshmark.
Rebag, online luxury handbag authority. Is where you can buy, sell and exchange luxury bags that are “white-glove inspected for the highest of quality and authenticity, with new arrivals added every week.”
To understand how fast and successfully this brand is moving a couple of data: founded in 2014, it has just announced $25 million in Series C funding, reaching a total raise to date to $52 million. They have also opened their first phisical store, moving from being a 100 percent digital operation to 80 percent digital and 20 percent offline. Its sourcing network also grew to include more than 20,000 stylists, partners, shoppers and sales associates.
Poshmark is another resale ecommerce, whose success is based on its vibrant community powered by millions of Seller Stylist who not only sell their personal style, but also curate looks for their shoppers, creating the most connected shopping experience in the world.
The average active users:
- spends 20 minutes a day on the platform,
- opens it 7–9 times a day.
- gets up to 70% of its business from repeat shoppers.
The human element of really connecting the products to people,” CEO Chandra says, “completely changes the nature of merchandise“
Fresh news states that Poshmark seems to be preparing to file for an IPO this fall.
Moving from luxury to streetstyle it is worth mentioning the case of Depop, brit-italian app that allows users to sell and buy second hand pieces of clothing and accessories. The platform was founded in 2011, and today, with its instagram-friendly features, has a huge and active community, that in 2017 sold $230 million in clothing, doubling it the following year by reaching over $460 million.
As declared by Depop CEO Maria Raga the secret of its success is to find in three main reasons:
“(Depop) it’s solving three of the biggest problems they (the community) face, they want to feel unique, to shop with (and from) friends, and to build their own green businesses without losing a drop of street cred.”
It looks like there is a shift in the direction the world is taking, it’s not just that people are becoming more efficient with how they monetize things when they’re not using them. The interesting element is the social barriers between what’s mine and what’s yours, they have blended so much more in the last years, that it’s pretty clear that the sharing economy and mentality has arrived in the mainstream fashion scene. And it is here to stay.