Rental is going strong, with Rent the Runway, the pioneer in this area, now 10 years old and profitable. The global online clothing rental market is expected to grow annually by over 10% for the next four years, according to MarketWatch. And the fashion resale market has been expanding a breathtaking 21 times faster than traditional retail over the past three years, Fortune reports. Millennials and Gen Zers, in particular, enjoy frequenting thrift and consignment stores, shredding the last remnants of social embarrassment about such places and remaking their image into trendy shopping destinations.
Re-commerce loomed large at the Baker Retailing Center CEO Summit, “Powering the Future of Retail in a Changing Environment.” Major industry lights offered their take on the phenomenon, also discussing where it leaves traditional retailers.
Secondhand, but It’s New to You
One notable resale business is thredUP, which bills itself as “the largest online consignment and thrift store.” Founded in 2009 as a men’s shirt-swapping company, thredUP is today a consumer resale marketplace touting representation of over 35,000 brands. Its CEO and co-founder, James Reinhart, delivered one of the conference keynotes.
Reinhart asserted that the total secondhand apparel market will double in five years, reaching $51 billion. One reason for this meteoric increase is a growing concern among the public — especially among younger people — about fashion’s negative environmental impact. Right now, said Reinhart, the industry is a major polluter. “We’re buying twice as much clothes and wearing them half as long,” he noted, adding that the equivalent of one garbage truck of textiles is dumped in a landfill or incinerated every second.
Reinhart highlighted some factors in thredUP’s success. The service is easy to use, he said. The company provides customers with prepaid bags to fill, picks the bags up from their doorstep, and then compensates them for items determined to be resalable. People can shop for used clothing on thredUP’s website, the design of which Reinhart identified as another contributor to the business’s popularity. He said it features high-quality attractive photos, clear information and sophisticated functionality so it resembles retail platforms rather than platforms selling items people are getting rid of.
“We’re buying twice as much clothes and wearing them half as long.”
Moreover, thredUP’s website displays new items every time a user hits refresh. Reinhart compared the appeal of this to today’s habit of checking email or social media frequently (almost obsessively, for some of us) to see the latest messages and posts.
Should retailers feel threatened by the growth of secondhand? Reinhart noted that, in fact, thredUP has been forming partnerships with large retailers such as Macy’s and J.C. Penney, and it is now operating over 100 store-in-store collaborations. According to Reinhart, having a resale option in traditional retail settings has been shown to boost overall sales: It spurs customers to spend 21% more and to visit 70% more frequently. He attributed the big increase in visit percentage to the fact that the secondhand collection is replenished every other week, whereas in traditional retail formats, new pieces arrive only about four to six times a year.
ThredUP has been attracting brands onto its platform as well, such as Reformation and Madewell. “Bringing brands and retailers along with consumers into this equation is how we’re powering this next generation of resale,” he said.