Photo: @JoesBoilingPoint via Twenty20
Should retailers worry that secondhand apparel is flooding the market?
In February of 2018 I wrote a piece for RetailWire asking what clothing retailers should do in the face of the growing popularity of consignment shops. Little did we know at that time that the apparel industry was about to be hit with the biggest phenomenon since fast-fashion, now dubbed “The Marie Kondo Effect.”
“Tidying Up with Marie Kondo” launched on Netflix on January 1st of 2019. Since the show’s debut customers have donated so much clothing that thrift stores in the Bay Area, California put limits on how much merchandise they take in. However, this doesn’t mean that there aren’t buyers for the influx of merchandise brought on by Kondomania.
Customers are thirstier than ever for secondhand merchandise because it gives them an opportunity to buy reasonably-priced clothing without contributing to the environmental crisis that’s been exacerbated by fast-fashion. Sustainability is a growing priority for consumers of all ages, and the number of consumers who “prefer to buy from environmentally friendly brands” jumped 15 points since 2013 — from 57 percent up to 72 percent.
Mobile thrifting platforms such as Swap.com and ThredUp let customers thrift shop from anywhere, so it’s just as convenient to buy secondhand as it is to buy mass-produced goods.
Sourcing Journal reports, “ThredUp wants to make the experience of browsing women’s shoes, shirts, slacks and more on its website ‘indistinguishable’ from shopping first-run goods at a traditional retailer. The company sells 35,000 brands in 100 product categories, processes 100,000 unique SKUs each day and is on track to clinch its 100 millionth SKU this year.”
With Payless going bankrupt and Charlotte Russe following suit, it’s getting easier to see why ThredUp predicts that the resale market will grow to be 1.5 times larger than fast-fashion by 2028. While Millennials and Baby Boomers are the biggest thrift shoppers right now, more than one in three members of Gen Z will buy secondhand this year.
Consumer priorities are shifting, secondhand shopping is now as convenient as buying fast-fashion, and customers can find nearly anything they want by thrift shopping. It’s hard to imagine these changes will come without cost for traditional retailers.
Discussion Questions
DISCUSSION QUESTIONS: How can retailers who are paying wholesale prices compete with secondhand retailers who are getting inventory for cheap or for free? Should more businesses strive to implement secondhand or thrift into their inventory model?
Poll
BrainTrust
Jeff Sward
Founding Partner, Merchandising Metrics
Georganne Bender
Principal, KIZER & BENDER Speaking
It’s more than just price — putting together disparate looks, materials, patterns and colors from various decades is THE fashion statement of this period. Gone is the ’90s credo of the “uniform” from the likes of Gap, Abercrombie or American Eagle — and they all know it!
IMO, it will be very difficult for someone like H&M (who’s attempting “used”) to compete with stores like Salvation Army, Volunteers of America or even The RealReal on the higher end who literally have tons of merchandise from all walks of life. They LIVE used clothing.
All this is very interesting in that the rejection of the idea of conformity carries over to a lot more than clothing. The long tail of the internet is driving uniqueness in a way we haven’t seen since the ’60s and ’70s. I love it!
This can’t be good news for most mall retailers, especially the big box guys. This is a whole new layer of shopping available to the customer. Do I want new product (on sale of course)? That’s the mall. Do I want new but maybe without quite the range of choice as the mall (but cheaper than the mall)? That’s TJMaxx and Ross and company. Or now, do I want used and probably really cheap and I’m being sustainable and who knows what I’ll find but what the heck I have 10 minutes and my phone is handy…? Sometimes clothing wears out emotionally before it actually frays, so why not go this route? I haven’t researched apparel on eBay lately (actually ever), but I think eBay taught us a lot of lessons in this secondhand market.
Thrift shopping became very popular during the recession, and the trend hasn’t abated. It’s tough for retailers to compete with their own merchandise, available for 90 percent off. Going forward, retailers are going to want to come up with a new business model or two to address this.
Retailers will definitely need at least one business model to address this. Retailers who understand how and why people thrift shop can leverage this successfully. A simple idea is to bring high-end, one-time wear items into the current retail marketplace. Those are the most frequently purchased items by “sometimes” thrift shoppers. You bridge the gap for them and you capture their share of wallet.
With consumer tastes trending toward vintage and value, I really wonder what the five-year impact will be on the apparel industry. I’m not completely certain a majority of people will continue to lean toward used clothing. Stay tuned…
The term vintage in relation to clothing has been used for some time and consumers are looking more and more to rental and second hand – often for financial reasons. This is starting to be taken seriously in the luxury sector – Stella McCartney has moved in this area. This is likely to trickle down. The business implications are huge in that it generates the need for complete re-engineering of merchandise and supply chain processes. A key question is, do systems exist in order to support this? The answer is “unlikely” – as this is a completely new business model.
They can’t … in the short run. The Thrift Store Revolution is about more than orderly closets, environmental consciousness, and saving money. It’s a legitimate subcultural fashion trend. And trends change. My guess is that the best way to stay in business is to know your customers and offer them a unique retail experience. In retailing, playing by somebody else’s rule book is the fastest way to fail.
Weak mass market brands which churn out undifferentiated apparel should worry about this. Strong brands with a point of difference should not. The truth is many people are turning to secondhand because it fulfills many of their needs – sustainability, desire for interest and newness, value for money – in a way that so many mainstream retailers fail to do.
The digital platforms of resellers have enabled this and made selling and buying secondhand easy and fun. Their success will only grow as they attract more consumers and, in some cases, move into physical stores.
Well said. Funny how “strong” and “differentiated” make for a strong moat no matter what the angle of attack.
Practically speaking, buying used clothes is like buying used clothes. Even with price tags, most used offerings have been worn or housed in someone’s closet. “Fresh” is a key variable when buying clothes already worn on someone else’s body without laundering prior to sale. Ask anyone who has walked into the awkward stuffiness of a used clothing store.
Thrift store shopping is nothing new. Physical world vintage thrift stores heavily curate their apparel offerings. The influence of Marie Kondo mania, while generating press and media attention and yes, people shedding their wardrobes to the Goodwill and Salvation Army to “spark joy” will pass in time. Retailers who jump on this media-driven frenzy are wasting time and resources. For some retailers it’s again another attempt to save a floundering business. Soon closets filled with 2X used clothes will inspire a renewed thirst for freshly purchased new clothes. As trends come and go, second-hand retailers like ThredUp and Swap will continue as before, enabling those with fewer resources to purchase used clothing to augment their wardrobes. Meanwhile back at Instagram, those with clean closets will be in pursuit of new inspirations to fill their empty closets.
There is no denying that consumers are become more open to secondhand clothing as an alternative to full-priced new merchandise. This is evidenced by stores like REI (used gear), Patagonia (worn wear) and Rent the Runway that are focused on appealing to the growing demand for secondhand merchandise and, in some cases, appealing to consumers’ support for brands that encourage and embrace sustainability practices.
The best way to compete with secondhand and thrift stores is to join them. If retailers feel threatened by secondhand stores, they should consider testing their own secondhand stores, following the model that Patagonia pioneered.
I get that this is a trend and that it’s fun to treasure hunt at Goodwill or to save a bundle at RealReal, but as much as it’s talked about I just don’t see it becoming as mainstream as shopping at H&M to save a buck. I agree with Ryan Mathews, that it’s a subcultural fashion trend – I think it’s always been a subculture fashion trend. Thrifting was hot when I was in high school, and again when my daughter was in high school 30 years later.
Should every retailer implement thrift into their inventory model? Only if it makes sense. Gently used Louis Vuitton bags at Lord & Taylor? Sure. But racks of used apparel? That’s not why I visit the mall.
I’m not certain this will have a large impact on the day to day mainstay apparel retailers. That being said, we’ve been seeing some disruption by companies like “Rent the Runway,” but I think that’s because it’s a niche section. Companies should stick to their core-competencies of being the first-hand supplier … it’s seldom you see both a new and used car dealership doing both very well!
It ain’t used, it’s vintage. Shopping secondary markets is seen as being smart and fun. Goodwill and others are getting more sophisticated about how they offer goods. Harajuku in Tokyo is a scary example of where the market is going. Cool looking kids on the street with sign boards guiding you to fourth story stores — cheap real estate. Funky location. Kwell music. Hip staff and great margins. What can Gap learn from this?