Why Big Retailers Are Finally Taking Resale Seriously | BoF Professional, News and Insights



H&M goes into resale.

The site, H&M Rewear, is expected to go live on September 7 in Canada, the company told BoF. If successful, the retailer would consider expanding the concept to other countries.

The fast fashion giant joins a growing list of traditional brands and retailers embracing the second-hand market. In July, Madewell announced that it had extended its partnership with ThredUp to create the Madewell Forever program, which allows shoppers to trade in their worn jeans in exchange for store credit. In March, Kering acquired 5% of the capital of Vestiaire Collective. And last week, UK department store Harvey Nichols announced it would launch a resale service for its customers, partnering with backend technology provider Reflaunt – the same company that works with H&M in its market.

It’s a sea change for the fashion industry, which until recently viewed resale as competition for new clothes at best, and a source of counterfeits at worst. But consumer demand for second-hand clothing is skyrocketing, and the biggest resale sites are now worth billions of dollars. This year alone, ThredUp and Poshmark, two of the biggest second-hand platforms, staged initial public offerings, and the youth-focused Depop was acquired by Etsy for $ 1.6 billion.

Established brands and retailers also take a slice of the pie, often relying on third parties to handle the delicate technology and logistics involved. Most do not seek to make reselling a significant part of their business, or even in some cases, to generate a profit. Instead, they see the opportunity as an additional service they can offer to customers who buy from resale sites anyway (ThredUp lists 48,000 H&M items for sale in its women’s section alone). An in-house resale option can also attract new buyers, and this is an opportunity for brands to signal that they are prioritizing sustainable fashion, although some critics question whether second-hand sales are helping the market. planet.

While running a large-scale resale site is difficult, more limited offerings from traditional retailers represent a relatively minor investment compared to the potential payoff.

“For some retailers, the resale may simply serve the value of the ESG (environment, social and corporate governance) press release, which on its own could cover the cost of doing business,” said Simeon Siegel, Retail Analyst and Managing Director of BMO Capital Markets. “If it’s bad, if it erodes the brand, they should be able to pull out. “

The resale call

For H&M, Rewear is part of the company’s broader sustainability goals. The company is already fulfilling its commitment to make all of its products from recycled or sustainably sourced materials by 2030, for example.

At the end of the day, we’re doing this to make change, we’re not doing it to drive sales.

But the retailer also sees it as an opportunity to gain market share in a country where resale is not as established as south of the border. While Poshmark operates in Canada, ThredUp does not.

Geraldine Maunier-Rossi, Head of Marketing at H&M Canada, said the company wanted to appeal to customers with a high user experience and a focus on better visuals. Even though the retailer does not maintain any inventory on the website, they will use a photo editing tool to make the first photo on the list more attractive and consistent overall. Users selling H&M items will also be able to search a catalog of recent seasons, giving them access to product photos, descriptions and even a price recommendation.

For Madewell, too, its Forever vertical is part of its other ‘do well’ initiatives, such as the continuous denim recycling offering, in which shoppers can bring in pre-worn jeans from any brand. and get $ 20 store credit for a new pair of Jean Madewell’s.

“Where is Madewell today … we are a well known brand but we still have a great opportunity to become better known,” said Libby Wadle, Managing Director of Madewell and its parent company, J.Crew Group. “But at the end of the day, we’re doing this to make change, we’re not doing it to drive sales. “

What is the real environmental impact?

When brands advertise their participation in resale, they almost always take the opportunity to praise their commitment to sustainability. H&M and Madewell both cite “closing the loop” as the most important driving force behind their respective resale initiatives. The notion of circular fashion has become a buzzword in the industry, referring to the process of extending the life of a garment.

“It’s more about being a better version of ourselves, promoting sustainability,” said Frédéric Tavoukjian, National Director of H&M Canada.

The impact of resale on fashion’s carbon footprint depends on two factors: whether it actually leads to a reduction in primary manufacturing, and the additional energy and resources required to travel the product from one consumer to one. other.

In a May study published in the academic journal Environmental research letters, Jarkko Levänen of LUT University in Finland found that reselling contributes less to climate change than recycling textiles and renting clothes, two other methods commonly used to create circular fashion. But this was only true when the availability of second-hand clothing replaced the need to produce new clothing.

What we don’t see in all of these circularity and resale ads is the work that needs to be done in the factories themselves.

“Prolonged use does not automatically mean that the user’s clothing collection remains the same, and resale does not automatically result in an increase in use time,” Levänen wrote. “People may buy additional clothes from second-hand stores just because of the cheap price. This type of activity has no effect on primary production.

The resale boom has yet to slow the growth of clothing manufacturing, said Maxine Bédat, founder of the New Standard Institute, a research and advisory group that advocates for a more sustainable fashion industry and author. of “Unraveled: The Life and Death of a Garment.”

“What we don’t see in all of these announcements about circularity and resale is the work that needs to be done in the factories themselves that produce these garments,” Bédat said. “And if they don’t look [resale] as a way to cannibalize their own sales, then that’s just brilliant stuff. “

Resale advocates respond that the positive impact will occur when the second-hand market takes a larger share of overall clothing sales.

For Madewell, the Forever program is the start of what could be a much bigger resale push, according to Wadle, who said she hopes those efforts will one day allow the industry to produce less overall. For now, the resale is still in an exploratory phase.

“We will be looking to expand into other product categories, not only at Madewell but overall [J.Crew] group, ”Wadle said.

Report on the future of fashion resale – BoF Insights

BoF’s definitive guide to clothing resale, covering market trends, growth and benefits, consumer behaviors, and recommendations for crafting a data-driven resale strategy. To discover the full report Click here.

The Future of Fashion Resale is the first in-depth analysis released by the BoF Insights Lab, a new data and analytics unit from The Business of Fashion that provides business leaders with exclusive, data-driven research. to navigate the rapidly changing world fashion. industry.

Related Articles:

Future of Fashion Resale Report – BoF Insights

Reseller sites race to recruit staff in the fight against counterfeits

Etsy’s Depop deal is just the start of resale consolidation

The resale gold rush continues



Leave A Reply