The resale industry is expected to exceed new goods apparel growth by 16 times, according to Bloomberg, increasing the market from $9 billion in 2020 to $51 billion by 2026.
In 2010, 4% of closets consisted of secondhand clothing; in 2021 that has increased to 9%, and projections are as high as 27% by 2030. Why? Many shoppers are looking for value, sustainability and fashion uniqueness. Secondhand items provide those options. In addition, younger shoppers are driving this growth with 53% of millennials and Gen Z planning to purchase resale goods in the next five years, based on a GlobalData survey.
The data projects secondhand goods to be twice the size of fast fashion by 2030, this driven heavily by environmentally conscious shoppers looking for value.
Large fashion and apparel brands are also entering the resale goods market. This year a major athleisure company launched a full campaign allowing customers to sell back their apparel at retail locations where used goods are planned to be resold.
Resale and sustainability
With supply chain disruptions, increased production costs and labor shortages, resale goods present retailers and consumer goods companies with a very attractive supply chain. By leveraging unused goods in closets to fill demand, companies can generate sales multiple times from one item produced. In addition, reusing materials is an efficient way for some companies to be sustainable. Bloomberg estimates a resold item cuts its carbon footprint by 82%. This efficiency is appealing to consumers. A GlobalData survey shows that 45% of millennials and Gen Z refuse to buy from a non-sustainable brand.
The resale strategy poses an intriguing opportunity for middle market consumer goods companies and retailers. However, companies will need to be innovative and develop new go-to-market plans along with non-traditional supply planning. Warehousing, retail and ecommerce sales are all unique to resale goods, requiring new tool development to meet industry requirements.