Used clothes heat up during pandemic, worn by young people

Annie Karlen loves saving money – buying and selling lightly used clothes. Clothes are cheaper than new clothes, and she appreciates the positive environmental impact of recycling and finds it fun to browse through a huge store of options.

“I love shopping, buying new things and receiving packages in the mail,” said Karlen, 28, of Washington Square, who buys about 60% of her clothes from resale sites, mostly from thredUP and The RealReal.

“I’ve been using these sites since I started about five years ago, and they have all the designers and brands that I love,” she said, along with 100% recycled packaging. “I am not an impulse buyer. If I like it, I can wait for it.

Karlen is among 223 million consumers in 2020 who report having or are open to buying second-hand products, according to thredUP’s 2021 Fashion Resale Market and Trend Report. The second-hand market is expected to double from around $ 36 billion in 2020 to $ 77 billion by 2025, according to the report. And it is expected to grow 11 times faster than the clothing retail industry while creating many jobs.

“For a lot of people, saving was a pandemic habit,” said Christina Schultz, director of corporate communications for thredUP. “People have learned to do more with less and the motivations for buying have changed. When people were stuck in their homes in April and May [2020], they had time to tidy up their cupboards. Based on the projections we see for the occasion and resale, we think we’re only at the start of something big. “

Dozens of companies have gotten into the resale game, well-established names like Macy’s, Levi Strauss, and Lululemon, all of which can be found in physical stores, online sites, or just for apps including thredUp and Shopify. . These companies provide customers with a variety of processes for buying and selling their lightly used clothing, from marketing, pricing, packaging, and selling to accompanying the seller through these steps. The more the seller does, the more he earns.

Poshmark, for example, asks the seller to take the photos, price the clothes, and mail the packages to the buyer. The site takes a commission and the seller earns the rest. At thredUp, the site handles the sale from start to finish, offering ready-made kits that can be loaded with clothing, shoes and accessories and shipped to the company for free. They determine the value of each item, list them for sale on their site, and then reimburse the seller. Payments vary by product and price.

The selling price of an item is based on an algorithm that includes brand, category, color, style and material, as well as supply and demand, Schultz said. Items can sell for as low as $ 2.99 for a necklace and up to several thousand dollars for a designer dress. Karlen estimates that she saves between 40% and 60% off the original prices on most of the items she purchases.

When thredUP started in 2009, “there was still a stigma in savings, something you might hide or say lip service,” Schultz said. “But that has largely disappeared, especially among the younger generation. Our 2020 report found that 80% of Gen Z said there is no stigma in buying second-hand fashion. “

The resale market has changed the model of clothing buying and has given young consumers access to the branded clothing market, which can turn them into lifelong customers, said Barbara Kahn, professor of marketing at the Wharton School.

“If you buy something knowing that you are potentially going to resell it, it affects your initial purchase and the resale affects your subsequent purchases because you could replace what you sold,” she said. “When we start to see some of the big brands participating, they will develop a product line that anticipates the resale model. “

To help other brands and retailers enter the resale business, thredUp has created a new division, Resale as a Service. Brands include Gap, Vera Bradley, Cuyana and Madewell, a division of J. Crew.

“We have different types of partnership structures,” she said. “Some run cleaning loyalty programs while others have full resale stores where you can buy used items both online and in stores. Any resale is a good resale.

The most recent entry into the resale market is Nuuly Thrift, owned by Urban Outfitters, and launched as an iPhone app this fall. The Nuuly brand hopes to capitalize on the clothing rental service it launched in 2019. The global online clothing rental market reached a value of $ 1.26 billion in 2019, according to Business Wire, and is expected to reach over $ 2 billion by 2025.

“Retail is going to pivot into the everyone’s closet of part of the full price, resale and lease,” said Simeon Siegel, managing director and senior analyst, BMO Capital Markets. “It’s interesting to see Urban being the first company to offer all three aspects of this ecosystem in one. “

With Nuuly Thrift, Urban hopes to increase its customer base to consumers who may not have tried the resale market but are loyal to their current brands, which also include Anthropologie, Free People, and Urban Outfitters.

“Since the emergence of e-commerce, many retailers and brands have had to grapple with the question: would you rather cannibalize yourself or let someone else do it for you,” Siegel said. “I don’t know yet if the resale is significant enough where there is a huge cannibalization factor. In the end, if done right, it will attract two separate customers. “

One incentive in the Nuuly model is Nuuly Cash, a 10% bonus given to customers who resell products of any of Urban’s brands. thredUP offers a similar incentive on its Cashout Marketplace, where customers can use the proceeds of their sales on specific brands to receive recall credit. Siegel likens the concept to a promotion.

“It only works if the assortment is convincing enough,” he said. “To convince someone to turn around and use that cash back in the same system, you have to convince them that you have what they want to buy.”

Siegel compares the resale market to that of used cars. “The success of resale over the next decade will depend on the ability of companies to convince people that buying resale clothing is just another way to participate in the ecosystem in the same way that no one else. shrinks from buying a certified pre-garment. owned car, ”Siegel said.

The Future of Work is produced with support from the William Penn Foundation and the Lenfest Institute for Journalism. Editorial content is created independently of project donors.