The Current State of the Resale Market
The world first witnessed a resale wave that was fueled by Gen Z’s interest in sustainable shopping and a push for a more circular economy. The current resale boom follows cost-of-living increases, which has impacted consumers with more budget-conscious decisions, combined with a keen interest on how the advancement of technology might play a part. With a global desire to shop responsibly and sustainably – resale is predicted to be a major force in the retail landscape for 2023 and the surge is only expected to keep climbing with predictions from Forbes stating that by 2026, the resale market will be worth $218bn. Retailers and brands from all sectors including fast fashion’s Boohoo Group to luxury fashion houses like Chloe are dabbling in the second-hand space to compete with startups like The RealReal.
One of the largest concerns within the fashion industry in 2022 is waste. Despite the economic backdrop, overproduction and overconsumption are in overdrive. US fast fashion retailers are producing 120% more individual styles weekly vs. in 2020, underscoring the need for retailers to invest in quality, upcycling materials and repurposing existing goods.
Pressure continues to rise for fast fashion businesses to reduce their environmental footprint resulting in resale, repair, and reclaiming used products initiatives from every major fast fashion player including Zara and SHEIN. Over 60% of brands and retailers are partnering with third-party resale marketplaces such as ThredUP to enter the fashion resale market, while over 20% choose to build their own marketplaces from scratch according to Forbes. However, reselling used goods won’t cancel out the impact of the enormous amounts of disposable products continuing to drop. Especially when the quality of materials used in the first place isn’t meant to last.
Circularity is essential for sustainable fashion, yet resale alone cannot fight against continued overproduction levels. For more of a chance to keep products out of landfills, brands across every market sector have a responsibility to cut back on the number of goods manufactured and improve on quality to ensure they can be resold and last generations.
Within recent years resale has hit the mainstream and the surge is only going up in 2022. Order volumes from sneaker marketplace GOAT more than doubled in the last 12 months. The company also acquired the resale platform Grailed to expand its womenswear offering. Poshmark's revenue also reportedly grew 14.45% as of Q4 2022.
The RealReal estimates that 40% of their consignors’ key motivators for selling are the environmental impact or extending the life cycle of luxury, and approximately 40% of customers say they shop The RealReal as a replacement for fast fashion. Vestaire Collective launched a new initiative banning fast fashion from being listed or sold on the platform. The brand stated, “We have taken this step because we don’t want to be complicit in an industry that has a tremendous environmental and social impact. We say no to a system that supports overconsumption, poor quality, and overproduction.”
One of the biggest challenges luxury brands are facing at the moment is understanding how to monetize resale within their own platforms. As with many retail innovations, technology is leading the way, Fashion tech company, The Ordre Group has opened up resale for luxury brands worldwide through the new app, Authentique. Through new blockchain technology brands are now able to authenticate luxury goods through any smartphone. Along with mobile authentication, Authentique creates a digital twin within the blockchain with proof of authenticity that is transferable upon resale.
