Fashion clothing resale and rental have both experienced massive growth over the past five years, driven by many of the same factors: Customers want cheaper, more sustainable access to high-quality brands at great prices. fast fashion. But reselling has been in a better place than renting since the start of the pandemic. As a result, the need for a constant rotation of outfits for special occasions was no longer necessary, and rental suffered as a result.
URBN’s Nuuly rental department added a resale service called Nuuly Thrift on Tuesday, making URBN one of the first major fashion companies to consolidate retail, resale and rental businesses under one. roof. Unlike other companies who have used external platforms to fuel their resale, Nuuly created the Thrift program in-house. However, the company declined to state the cost of developing the iOS app where its resale service will reside. The move is a big gamble on the future of circular fashion and alternative consumption models, although it comes with high associated costs.
Nuuly Thrift is a peer-to-peer resale marketplace, as opposed to a consignment service like The RealReal. Nuuly customers can now sell clothing – any garment, not just URBN brands – directly to other users. They then get either a cash payout or a 10% top payout in Nuuly Cash, which can be used for Nuuly rentals or Nuuly Thrift purchases, or in one of URBN’s brands like Anthropologie and Urban Outfitters. Nuuly Thrift will primarily be marketed through targeted emails and social ads to existing Nuuly tenants, as well as customers of the company’s other brands.
The integration of Nuuly Thrift and its associated payments with the rest of URBN’s brands fulfills the promise that resale has always had for primary market brands: buying second-hand clothing from one brand is a gateway. so that customers then buy new clothes from the same brands. This is the pitch that companies like The RealReal or Vestiaire Collective have given to hesitant luxury brands to convince them that resale is a supplement and not a threat.
David Hayne, CTO at URBN and President of Nuuly, echoed the idea.
“With the millions of existing URBN customers, our expertise in merchandising and creation, our in-depth technical capacity and the potential for Nuuly Cash to generate additional purchases in our family of brands, we believe the scene is ready to capitalize on a very large resale market opportunity, ”said Hayne.
According to Nuuly data, Nuuly’s roughly 30,000 subscribers also have extensive knowledge of reselling. Three-quarters of Nuuly’s rental customers have purchased used items in the past and 50% have sold items in the past year.
Notably, Nuuly Thrift will include clothing for men, women and children, while Nuuly Rent continues to only offer clothing for women. This shows that the rental is still largely gendered in a way that resale is not.
But setting up both a rental and a resale service in the same company is not easy. Both require complex infrastructures for the reception and processing of the clothing returned by the consumer. It’s easier to use peer-to-peer rather than logging because it doesn’t require the company to create individual product listings like The RealReal does, for example. But even so, setting up a resale service is expensive.
“It’s not a small investment,” said Andy Ruben, CEO of resale technology company Trove, which powers resale brands like Patagonia and Lululemon. ThredUp has made this a big part of their business to handle resale logistics for companies that can’t or won’t do it themselves.
Ruben said it can cost tens of millions of dollars to build a robust resale program from scratch. While URBN can afford to consolidate resale, rental and retail into one company, most do not have the resources to do so. URBN brings more $ 3 billion in revenue per year, according to company earnings reports. But the overlap between rental and resale customers provides further evidence that both business models are worthy investments for retail brands.