What are clothing retailers to do as consignment shops grow in popularity?
Consignment stores selling vintage and “gently used” stores pack a big punch these days. According to 2017 data from the digital resale platform ThredUP, consignment and resale apparel sales are on the rise. Secondhand apparel is already an $18 billion industry, but the resale biz is projected to keep growing by 11 percent annually to reach $33 billion by 2021.
Millennials and grandmas, in particular, are going all in on vintage charm. In fact, ThredUP reports these two demographics are 30 to 32 percent more likely, respectively, to do their shopping secondhand.
Why all of the sudden attention on resale apparel? One reason is that today’s consumers would rather differentiate themselves than blend in with their fashion purchases. Young and young-thinking customers today are more interested in finding clothing with a story than snatching up the biggest brand name. Suddenly, in 2018, finding a one-of-a-kind “vintage” clothing piece carries more social clout than just being the guy or girl who can pay the highest ticket price.
Secondhand clothing is also more sustainable than manufactured apparel, and consumers seem to be more concerned than ever about environmental impact. In fact, Forbes reports that 58 percent of consumers are willing to pay extra for sustainable brands.
Customers who can’t afford to purchase sustainable products at a higher price point have the option of either buying their clothes fast-fashion or buying them secondhand. Guess which option nearly guarantees no one else shows up in the same outfit?
Even fast-fashion retailers such as H&M, Mango and Zara are delving into offering their customers ethical apparel lines, in addition to hash-tagged recycling initiatives. However, it’s tough for e-commerce to compete with consignment shops selling pre-manufactured clothing, which has very little negative environmental impact. Judging by recent statistics about Gen Z’s sustainability concerns, the “green customer” is only going to grow in number in years to come.
- Fashion Retailers Have to Adapt to Deal With Secondhand Clothes Sold Online – Forbes
- Annual Resale Report, 2017 – ThredUP
- Millennials Will Spend Money for Eco-Friendly Clothing – Refinery 29
- The Luxury Trends of 2018: Green Is the New Black and More – Forbes
DISCUSSION QUESTIONS: How will the growth of resale and consignment affect mainstream retail brands? How can traditional retailers appeal to customers that seek out secondhand goods?
Sunny KumarHead of Experience Design, Tribal Worldwide London
Sunny KumarHead of Experience Design, Tribal Worldwide London
Sunny KumarHead of Experience Design, Tribal Worldwide London
Sunny KumarHead of Experience Design, Tribal Worldwide London
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10 Comments on "What are clothing retailers to do as consignment shops grow in popularity?"
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Managing Director, GlobalData
We conducted this research for thredUP.
The consumer interviews we undertook were most revealing: the rise of secondhand or resale clothing is not rooted in one factor. Those making the switch are doing so for multiple reasons — ethical concerns, the desire to find interesting and unique products, as a way to save money, because it is fun and enjoyable, and so on.
One of the big findings is that mainstream apparel retailers are not delivering enough newness and interest. By virtue of the business model, resale players have constantly changing assortments which often contain some real hidden gems.
On the ethical front, some retailers like the U.K.’s Marks & Spencer, have embraced apparel recycling. Their Shwopping scheme allows customers to recycle old clothing in return for points which they can use to get vouchers or discounts in-store.
Chief Executive Officer, The TSi Company
Senior Retail Writer
Many shoppers love consignment stores for the incredible value and the treasure hunt experience. If retailers can offer great deals and unique one-of-a-kind items, they can still appeal to these thrifty shoppers.
Principal, Cathy Hotka & Associates
During the Great Recession, customers realized they could feed their Ralph Lauren habit and their Banana Republic habit by purchasing at secondhand stores, T.J. Maxx and even Goodwill. That genie shows no sign of going back into the bottle any time soon. Traditional apparel retailers will need fresh styles and reasonable prices to appeal to price-conscious consumers.
Head of Experience Design, Tribal Worldwide London
There has been a trend, in the U.K. at least, for some of the larger High Street clothing retailers to have vintage sections in their bigger stores. Based on this article, you could see this trend growing if traditional retailers want to build on the resale and consignment growth. If they tie this with their own stylist credentials you could see a place for “getting the look” combining new and resale items that may help a little to stem the fall in new clothing sales.
Retail Solutions Executive, Teradata
Combine the two into one concept! LOVE IT!
Chief Amazement Officer, Shepard Presentations, LLC
The first thing that came to mind was what happened when someone decided to sell a used car. It seems that the car dealerships figured out the balance between new and used on their lot and how to compete with dealerships specializing in just used cars, as well as individuals. I don’t think we can compare retail clothing to the car industry, but retailers should look at any industry that has had similar disruption and study how they operate.
One way traditional retailers might be able to deliver a “secondhand experience” is to have a section of returned, but like-new offerings. This would be returns that are not new. Think of the open-box items at an electronics store. Same thing.
Global Retail & CPG Sales Strategist, IBM
Mainstream retail has already taken a significant chunk out of this trend’s growth by offering new “distressed” and “new “vintage” apparel. I don’t think the industry leaders are taking this lying down. I think it’s just a matter of time before the big retailers offer genuine used clothing in their own stores and/or open spinoff brands with secondhand apparel.
CFO, Weisner Steel
As always, perspective: retail clothing sales are, what, $200B? $300B? So even the $33B figure is only a small segment. That having been said, it’s still a large number — equivalent to the total sales of any number of (large) chains — so probably it shouldn’t be ignored altogether.
So how to respond? Two approaches come to mind: the purely defensive one of simply buying up consignment shops (though the lack of concentration and the necessity of a one-by-one approach may make this impractical). The second is more proactive: emphasize the durability and resalabilty of your clothing as an advantage. “Try it and buy it … if you don’t like it you can always (re)sell it.”
Other than that, response may be limited: fashion fads like nostalgia and a dislike for “mainstream” products are the antithesis of what large companies are all about.
Vice President of Marketing, Paper Mart
I think this is a very natural progression of the female clothing buyer. When you’re young, you can’t afford to pay full price and you’re striving to find your individuality, so consignment shops are great. As you get older and make more money, you move towards retailers because you don’t have as much time to sift through mounds of second hand clothes. It’s a novelty way to shop that goes in and out of fashion and I don’t foresee any significant impact to retail brands.