Apparel Resale Market Expected to Hit $41 Billion by 2022
Apparel resale is still growing and set to outpace most areas of retail in the next decade.
Once a favorite of college kids and hippies, secondhand apparel and accessories are increasingly popular among a wide range of female shoppers, and the total market is set to hit $41 billion by 2022 from $20 billion, according to a new report from online reseller ThredUp, based mainly on research and data from outside firms.
“The closet of the future is going to look very different from the closet of today,” James Reinhart, ThredUp chief executive officer and cofounder, said in the report. “But innovation can be messy. And that’s where I think we are in the innovation cycle.”
Reinhart pointed to newer retail and shopping concepts and services like rental and subscriptions, led by Rent the Runway and Stitch Fix, respectively, as well as online resale like ThredUp and The Real Real, noting all are still in relatively early stages of development.
“Sometimes the clothes don’t fit, sometimes the quality doesn’t match the price, sometimes customer service is uneven or shipping times mess with the best-laid plan,” he said.
But that’s not to say shoppers intend to return to traditional retail. Instead, as the new companies streamline their processes and consumers continue to try new methods of shopping, items from the new methods are set to make up roughly a third of the typical woman’s closet by 2027. Resale is set to grow from 6 percent to 11 percent of closet share, while direct-to-consumer options will be at 11 percent from 7 percent, Amazon Fashion will come in at 4 percent from 2 percent and subscription and rental at 2 percent from about 1 percent.
Meanwhile, purchases from department stores are set to have less closet share by 2027, shrinking to 10 percent from 14 percent. Similarly, buys from mid-priced specialty retailers are expected to fall to 14 percent from 20 percent and at value chains like Walmart to 10 percent from 11 percent. Fast fashion could grow by a relatively meager 1 percent to 10 percent of closet share, and off-price shopping is expected to hit 18 percent from 15 percent.
Resale specifically is also growing to include more wealthy and luxury consumers. Although an estimated 66 percent of resale shoppers partake in order to nab brands that they would not buy at full price, 13 percent of the sector is driven by self-identified millionaires, according to the report.
And those already shopping resale intend to keep doing so and to double their spend over the next five years, meaning about 40 percent of the average resale buyer’s closet will be secondhand by 2022. Millennials are also the most likely to buy resale, and 40 percent of shoppers aged between 18 and 24 did so last year.
Part of the increased trend of resale shopping is the sustainability aspect, which is popular among Millennials, even though they are still one of the more wasteful age groups. If everyone in the U.S. shopped resale for a year, it would save 13 trillion gallons of water, enough to cover all of California’s estimated water needs for 14 years.
Fashion companies have been promoting sustainability as well over the last few years, with a number of initiatives in place to cut down on waste and promote a “circular” supply chain making use of recycled materials for production. Last week, ceo’s from Kering, Target, H&M and others agreed to focus on a new set of sustainability principles they had negotiated, the first time such a group commitment has been made in fashion.
Although it seems that the resale market for luxury goods in particular is growing and becoming more widely accepted, brands are not in control of their aftermarket. Whether they attempt to retrieve some of the market share being pulled by resellers through their branded goods remains to be seen.
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