The world is poised to see a revolution of a new kind in fashion consumption with consumers lapping up used clothing and apparel for varied reasons. This feature decodes the trend.

Secondhand clothing market constitutes a slice of a larger pie – the resale market. The resale or re-commerce, as often addressed, is the retail of used items. While few years ago, secondhand items used to be traded mainly on flea markets and in thrift shops, today much of the trading has shifted to online platforms. Both fashion industry and non-fashion businesses have been pioneering resale models over recent years. The trend has even caught up with giants in the game with furniture retailer IKEA launching a take-back offering as well as a pilot secondhand pop-up store two years back. It is estimated that the resale industry will grow more than 10x times faster than traditional retail till 2025. So much so that by 2030, nearly one in five items in people’s closets will be secondhand.

Talking of fashion, Boston Consulting Group (BCG) estimates the secondhand and luxury market, including apparel, footwear and accessories resale, to be worth $100 billion to $120 billion worldwide, which is growing fast and has nearly tripled in size since 2020. BCG observes that though buyers generally enter the secondhand market through bags before switching to apparel and ultimately to jewellery, the demand for the secondhand market is clear with preowned clothing making up 25 per cent of the average secondhand consumer’s wardrobe. So, what is driving consumers to secondhand purchase?

Consumer Perspective

Half of the respondents in a Vestiaire Collective-BCG collaborated consumer survey—to find out their perspective on the secondhand market—cited affordability and value as the number one reason for buying secondhand items. Product variety also remains important and emerged as the second biggest driver behind secondhand consumption, powered by the increasing popularity of resale apps. Among others, sustainability is an increasingly popular driving force for purchasing secondhand clothing, as is the thrill of the hunt and the opportunity to barter with resellers. Findings further suggested that the threat of recession could result in a reversal of the affordability trend, just as the cost-of-living crisis might motivate people to turn their wardrobe as an additional source of income. The online segment has also seen considerable advancements in privacy and product-authentication protocols, which make it easier and safer for individuals to resell their goods online. In addition, secondhand fashion appeals to the shoppers’ desire for exclusivity. In recent times, it has attracted many celebrity supporters such as Zendaya, who has regularly appeared with vintage clothes on the red carpet, and singers Lorde and Rihanna who are also fans of the secondhand trend. This raises another pertinent question – what makes people trade used products?

Used Products Trending

Buying secondhand products is no more considered a taboo, rather young people are proud to buy them. The key reason for this trend – such products come cheaper and greener. They are cheaper since they can be purchased for a fraction of the retail price though not all resale models sit in low price brackets. In fact, recent years have seen an unprecedented rise in luxury fashion resale too. Renowned brands like Burberry and Gucci are partnering with consignment services like The RealReal to collect and resell their pre-owned products. The consumers can also directly sell used luxury goods to their peers on platforms such as Vestiaire Collective. At the same time, like buyers, private sellers are often driven by financial motives while cleaning out their closets. Saving money is not the only incentive in resale but extending a product’s lifecycle provides additional environmental benefits— reducing the economy’s draw on natural resources and delaying creation of waste.

Sustainable-Circular Design

With planetary crises such as climate change, pollution and loss of biodiversity rising to the top of consumers’ agendas, companies are now gearing to adapt their business models pertaining to secondhand clothing. Despite the increased emission due to the logistics of circulating used products among new owners, resale models overall outperform traditional ‘take, make, waste’ models on most environmental metrics. Resale models incentivise businesses to design more long-lasting products. The durability of products stands as a necessary pre-condition for resale models since a longer product lifecycle allows the new owner to resell more often. This has set new goal with implications for product design to last longer, compelling clothes to be made of durable garments. The technology involved in the process is required to follow a modular design which allows the reselling business to easily repair and replace components. Focusing on design for resale has fostered innovation and led to better product quality.

France: A Case-In-Point

France has come up with anti-waste regulations that aim to encourage design for circularity. It has an Extended Producer Responsibility (EPR) scheme for clothing which mandates companies producing and selling clothing in the country to pay a fee covering the management and treatment of the end-of-life of their products. This fee increases significantly when low-quality, less durable garments are being used. The law is considered a prime example of a financial reward-penalty system and is expected to expand to other countries and sectors.

During the COVID-19 pandemic phase there was a fear that consumers might withdraw from buying used items for hygienic reasons. On the contrary, the opposite happened in France if one goes by numbers. The online platforms for secondhand clothing with over 12.5 million users in the country reported a significant growth during the containment (between March and May 2021) phase. It was found that individuals cleaned out their wardrobes twice as often as before the pandemic. While retail sector in general shrank by 15 per cent, the web-based fashion resale is said to have grown 69 per cent in 2021 compared to 2019.

The nation is contributing to resale revolution with secondhand trade booming in recent years. Statista Global Consumer Survey conducted there in 2022 found that 29 per cent of consumers surveyed had bought secondhand clothing in the past 12 months either online or in-person. Even French hypermarket chain Auchan – one of country’s largest food retailers, had to install secondhand clothing department in its stores in 2021. Supplied by the e-commerce platform Patatam from its 3,500 sq metre warehouse in Hastingues, in the Landes region of France, the dresses, pants and other secondhand clothes went on sale in five Auchan hypermarkets initially before expanding to over 100 Auchan hypermarkets by spring of 2021. Other supermarkets such as Super U, Carrefour, Leclerc and Cora soon followed. No wonder then that the fashion companies too are strategically catching up with the resale trend.

Smart Approach

Some companies are adopting a special approach to implement their resale business models. Many traditional companies which started engaging in resale business initially launched pilots and spin-off solutions that kept the main business separate but allowed the company to have lighthouse projects where they could learn how to cope with a new but different business. Both H&M and Zalando introduced independent platforms for selling quality-controlled pre-owned fashion – H&M’s Sellpy and Zalando’s Zirkle. Players like Lulumelon, Cos and Isabel Marant also claim to have seen success selling collections on their websites and in their stores, aided by in-house capabilities or white-label solutions. In fact, Isabel Marant reported that two-third of its secondhand buyers became its new direct clients within one year of launching its vintage resale arm.

In retail, responding to shifting demands with more sustainable offerings can attract new customers and also improve customer loyalty. Resale business models can also help in creating a so-called lock-in pattern. For example, in exchange for used products, some companies offer their customers vouchers that can only be used in-store. This helps the customers gain new value from used assets and the sales loop stays closed within the retailer business ecosystem, also generating new revenue streams for the resellers.

Role of Retailers

BCG consumer survey also found that while consumers are generally comfortable buying secondhand online, the fears of counterfeit or poor-quality goods can prove to be a major deterrent. As much as 10 per cent of branded goods sold are counterfeit and an estimated 80 per cent of consumers have handled fake or falsified goods, knowingly or unknowingly. This sets the premise for the retailers entering the resale space to help mitigate consumers’ fear of counterfeiting. Such attempt requires brands and retailers to devise and implement innovative resale business models that should be trust-inspiring and confidence-building among consumers. As the competition in resale market, and online platforms in particular, is increasing, the companies must remain relevant to their existing audiences and develop tactics that will increase their reach to new audience as well. Additionally, steps to mitigate risk and protect their reputation must also be taken. Once implemented, the resale business model must also allow the companies to retain control of their brand and pricing structure and still make the optimum margin on the same garment. In case of online, the additional insights gained can be utilised to stay ahead of a fast-changing game. For instance, the brands can enrich the data they hold for first-time purchases and use it effectively in retargeting campaigns and formulating CRM (customer relationship management) strategies.

Despite the mentioned advantages, this approach also has drawbacks. It can be resource intensive, cause inventory issues in situation of sales being underwhelming, and risk product cannibalisation, with consumers getting lured away from the brand or retailer’s new products.

Resale Models

In real world, not every fashion player has the resources to implement and manage its own resale operation. This makes partnering with a resale platform a good option. Such a partnership offers a mutually beneficial solution wherein the platform handles the logistics, payment processing and product validation i.e., performing quality and authentication checks, and the fashion partner provides additional traffic, promotion and credibility owing to its brand pull. Through this way, the brands and retailers, for their part, can resell products, boost recognition and cheaply acquire new customers without having to actually run the resale operation. They can source products from individual sellers in exchange for store credit, which in turn can build customer loyalty. The luxury retailer Mytheresa partnering with Vestiaire collective, and Burberry partnering with The RealReal operate under this model.

The other model involves the fashion companies to explore opportunities that come with growing their business through resale without making a significant investment or long-term commitment. Under this model, the options for brands and retailers include giving third-party resale platforms a modestly sized space in stores and developing discount-and-incentive schemes for customers who sell their secondhand clothing back. This also helps in increasing footfall and audience reach, besides allowing the players to participate in circular economy while mitigating the risk that comes with counterfeit goods.

Secondhand in Australia

In addition to the US and Europe, Australia is also on the growth curve with an increasing demand for pre-owned clothing and other items. The continent-nation is witnessing mushrooming of secondhand retail avenues – online as well as offline, with concentration in Melbourne and Sydney. The Australian fashion industry is the second biggest consumer of textile and clothing in the world according to a 2021 study by secondhand outlet Reluv. This leads to each Australian sending about 23 kilograms of clothing to landfill annually, totalling over 800,000 tonnes of clothes going to waste every year. Another study by YouGov – a knowledge sharing portal, shows that at least 24 per cent of Aussies have worn an item only once before throwing it out. Reluv study further claimed that at least 72 per cent of Australians purchased a secondhand item in the previous 12 months. At least 52 per cent of shoppers bought clothes from shops like Vinnies, 33 per cent used online platforms and 15 per cent thrifted at markets or dedicated vintage stores.

The Australian market is seeing many entrepreneurs, even immigrants, entering the secondhand space as is the case of Swapup – a Sydney-based online secondhand store started by Alifa in 2018 when she moved to Australia and wanted to buy secondhand for her wardrobe and home but struggled to get it easily. She set up Swapup – a thrift and consignment store that delivers a stylish and current secondhand collection of women’s and kids’ fashion sourced from Aussie’s wardrobes. There are many established as well as budding names which are shaping Australian secondhand market – Vinnies, Savers, Salvos Stores, Goodbyes, Out of Closet (OTC Vintage), Hunter Markets and Retrostar to name a few.

Key Secondhand Players in Other Markets

Swap: Swap is an online consignment and thrift store that offers apparel and accessories for women, maternity, men, children and babies at up to 90 per cent off retail prices. It is headquartered in Downers Grove, IL and has offices in Chicago (US) and Helsinki (Finland). Launched in 2012, the online store began its journey from a 6,000 sq feet warehouse in 2013 and expanded to 360,000 sq feet by 2015, adding women’s clothes and accessories before including men’s clothes and accessories a year later. Initially called ‘ online consignment’ it was rechristened in 2017. As of today, it has over 2 million unique products with an average order size of $55 with orders ranging for $7 to $360 and nearly 20,000 new listed items added daily. It offers free shipping on orders over $75 and 30 per cent off to new customers on their first order. The marketplace enables a community of thrifters to find affordable, quality secondhand apparel for the whole family. Its brands portfolio is rich and boasts of having every brand name beginning from all 26 letters of English alphabet. Its best sellers are fashion-forward items that have been in the mall or department stores in the previous three years. Swap has well defined dedicated acceptance criteria for clothing, shoes, accessories, rejected as well as recalled items, clearly displayed on its site to help sellers select the in-demand items that its customers search for. However, the prevalent acceptance criteria are subject to frequently changing fashion. Additionally, it runs a Swap-affiliate programme that involves 5 per cent commission per order.

Thredup: Thredup is an online store that offers women’s and kids’ secondhand clothing, shoes and accessories. Thredup has changed the way consumers shop by ushering in a more sustainable future for the fashion industry. By extending the lifecycle of millions of garments through its scalable resale business model, it has emerged as a solution to the fashion industry’s wastefulness. To date, it has processed 137 million unique items across 100 categories besides displacing 637 million lbs of CO2 by empowering consumers to buy and sell secondhand. In the process, it has helped its buyers save an estimated $4.1 billion off retail price.

Founded in 2009 by James Reinhart – its present CEO and Co-founder, it added women’s resale in 2013 to its kids’ business that soon surpassed the later. The designer fashion with curated pieces from high-end brands was included the next year, followed by its first distribution centre with automation opening in 2015; an office for a team of its engineers and data scientists opening in Kiev, Ukraine in 2016; and its pop-up stores popping up in Texas and California in 2017.

The Thredup selling process starts with a Clean Out Kit – a giant polka dot bag for the givers who can fill it with clothes on its accepted brands list and ship it for free. Upon receiving, the items are professionally photographed on mannequins to help interested shoppers see how they fit. Once sold, the money can be kept, used as store credit or used at other sustainable retailers like Reformation via their Upcycle programme. Anything that is not accepted is either returned to the giver or recycled responsibly. If the giver mandates to forego a profit, a Donation Kit is ordered and instead of giving the giver a percentage of the sale earnings, Thredup donates $5 to any charity of giver’s choice. Besides keeping clothes in circulation, it does more to combat fast fashion via its Circular Fashion Fund – a 501(c)3 non-profit status pending organisation.

As a managed marketplace, Thredup delivers shoppers great brands at great prices in an ever-changing assortment. Each item undergoes quality inspection enabling buyers shop value, premium and luxury brands all in one place, at up to 90 per cent off estimated retail price. The platform has Resale-as-a-Service (RaaS) that enables even brands like Walmart, GAP and Reformation to deliver modern resale to their customers. Technically speaking, Thredup is a custom-built operating platform with ability to process more than 100,000 unique items per day. Built for ‘single SKU’ logistics, the platform consists of distributed processing infrastructure, proprietary software and data science expertise, whose technology includes machine learning and artificial intelligence. These technologies enable visual recognition, multi-layered algorithms to determine resale prices and automatic photography that can produce hundreds of thousands of photos a day.

Beyond Retro: UK-based Beyond Retro was born in 2002 as its first store in Cheshire Street. Since then, it has grown to a global business with 15 stores across the UK and Nordics with Helsinki joining more recently. It offers an interesting model that thrives on fast fashion originals. It sources products up to six months in advance, aided by sophisticated information management system that gives constant internal trend updates. It has a network of trained treasure pickers who work in warehouses of global sorting facilities literally scaling mountains of secondhand clothes to find the vintage ‘diamonds’ matching retailer’s trends. The pickers look at colour, size, fit, quality and label to meet their buyers’ needs. The painstaking effort results only 1 in a 1,000 making the cut. Once thousands of these finds are saved from reaching landfills or shredders, they are shipped to the company’s warehouses in London and Sweden. Specially developed software tracks the crucial fashion statistics of each unique item: trend, decade, size, style and source among others. Multiple shipping containers are processed per week wherein product experts examine each box for quality control before hanging items for pricing. With thousands of new pieces added to Beyond Retro shop floors and online every week, it is ensured that there’s fresh vintage drops every time the shoppers shop. This is how the women’s and men’s online thrift store is able to boast a boho fashionistas’ dream by offering everything from the 1960s to the 90s. Additionally, it has a Reworked Vintage range for upcycled clothing.

Over the years, Beyond Retro has developed an expert eye for rare print, shape and embellishment that fuels its ‘Design Archive’ – a reference and inspiration source for product development across all markets and genders. With over 6,000 original garments and 10,000 print swatches available on-site, Beyond Retro’s collection offers a remarkably rich and varied selection tracing the evolution of fashion history from the Victorian era through to more recent times. It stocks exquisite 19th century tailoring that includes 1930s-era tea dresses, mid-century denim and even military items, while a plenty of original print swatches cover every pattern, motif and theme from florals to paisleys, geos and more.

Vestiaire Collective: The European social commerce app for desirable pre-loved fashion Vestiaire Collective was launched in 2009 in Paris by Fanny Moizant after being a mother to 2 kids. She founded the site with five business partners after realising that many of her friends had closets full of designer clothes that they no longer wore. She launched the platform with 3,000 pieces and the commitment that all items could be authenticated. As a practice, the platform does not disclose its turnover or profitability, despite that the company achieved a valuation of $1.7 billion in September 2021. As of today, it is a certified B Corporation that meets the highest verified standards of social and environmental performance, transparency and accountability. It has offices in Paris, New York, Los Angeles, Hong Kong, Seoul, Singapore and tech hub in Berlin. Since its inception, Vestiaire Collective has been building a planet friendly alternative to fast fashion and is dedicated to transforming the fashion industry for a more sustainable future by promoting the circular fashion movement as an alternative to overproduction and overconsumption, and the wasteful practices of the fashion industry. It allows the customers to buy and sell ‘authenticated’ pre-owned luxury fashion wherein sellers can either list the item themselves or ask Vestiaire to do it for them. The platform is unique thanks to its highly engaged community and its rare, desirable inventory of 3 million items.

A survey of secondhand apparel shop users was conducted in the UK in 2022 to evaluate Vestiaire Collective platform on five metrics – brand awareness, its popularity, usage, consumer loyalty and buzz around the brand in the market. Statista reports that while 22 per cent of the respondents were aware of the platform, it was popular only among 4 per cent; only 3 per cent admitted having used it with 2 per cent each confessing their loyalty to the platform and hearing about it in the media, on social media or in advertising over the past three months. There were another 9 per cent who felt there was little or no buzz around the Vestiaire Collective, suggesting a long catching up for the brand to do in the UK market.

Depop: Depop is a P2P (peer-to-peer) social e-commerce company based in London with offices in Manchester, Milan and New York City. It was founded by co-founder of PIG (People in Groove) magazine and Retro Super Future sunglasses, Simon Beckerman, originally as a social network where PIG’s readers could buy items featured in the magazine. After realising a need for a selling function, the app was re-envisioned as a global marketplace where one could see what one’s friends and people inspiring oneself were liking, buying and selling. This helped Depop become a global channel of connection through m-commerce, connecting cultures, designs and creative communities around the world. It became a wholly-owned subsidiary of Etsy – the global marketplace for unique and creative goods, but continues to operate as a standalone company. It is a home to 30 million plus stylists, designers, artists, collectors, vintage sellers, sneakerheads and more.

Poshmark: Beginning January 2023, Naver Corporation – South Korea’s largest internet company, acquired California-headquartered Poshmark – a social marketplace for new as well as secondhand style for women, men, kids, pets and home. The acquisition has created a global player in online fashion re-commerce. While Poshmark will accelerate Naver’s strategy to build a global e-commerce community portfolio to capture growth in large untapped markets around the world, Poshmark, in turn, will benefit from Naver’s technology, expertise in Asia, and successful track record of backing e-commerce platforms globally. Together, they will increase purchase conversion rates, deepen user engagement, create an industry leader in livestreaming commerce, and enhance the unique relationship and discovery-based experiences that are driving fast-growing re-commerce market. The transaction resulted in delisting of Poshmark on NASDAQ which will, otherwise, continue to operate in its existing form.

Poshmark boasts of 80 million registered users across the US, Canada and Australia and offers 200 million plus items for sale in these markets. It makes one sale every second in the US. Poshmark connects people and allows them to easily shop closets and boutiques. The listing of items on the site reportedly takes less than 60 seconds. The marketplace conducts Posh Parties which are virtual buying and selling events that happen in the app. People can browse, buy, and even list together with their friends. Additionally, the shipping is made easy. When a sale is made on Poshmark, seller is provided with a pre-paid, pre-addressed label ready to be put on the box. Once the sale has been packaged, it can be dropped off at a USPS (the US postal service) mailbox or even have it picked up for free from seller’s home.

Goodfair: Another American online thrift store is Goodfair that encourages the customers to go beyond shopping secondhand and become full-fledged conscious consumers. Its mission “No New Things” cuts down on the need for low wage factories and combats clothing waste and pollution that are the result of fast fashion. Goodfair’s thrifted clothing, accessories and home goods come at a fraction of the cost of buying new. When order is received, its team hand-selects each piece into a one-of-a-kind bundle. As an online thrift store with no physical location, Goodfair works directly with the textile recycling companies and other partners to purchase its preloved clothes before they are exported, the majority of which end up in landfills overseas. It purchases product categories of thrifted items that arrive at its warehouse in large bales, weighing 1 ton or more. These bales are opened and then graded into three buckets: 1. Good to go; 2. Damaged, printed with inappropriate content or stained beyond help (these are repurposed as best as they can be); and 3. Surface stains that can likely be soaked or washed out (these are sent for laundering and then they are re-evaluated for sale).

Each piece of used clothing is resized according to Goodfair True Size Standards and then folded, counted and stored to be packed by its pickers on receiving the orders.

Worn Wear: Worn Wear by Patagonia (an American retailer of outdoor clothing) is a hub for keeping gear in play, i.e., to trade in and buy used Patagonia items – all clean, functional and backed by guarantee. Patagonia’s durable gear last long and after giving most on their part they are bought back against Patagonia credit for others to use them. The used Patagonia gear are sold online and in select stores. Patagonia also offers trade-in credit for its items which the consumers no longer use, shares online guides for DIY repair and care, and recycles garments at the end of their useful lives. Worn Wear aims at cutting down on consumption and getting more use out of stuff that is already owned.

Refashioner: Although many players are trading secondhand, there is Refashioner from US which has unique vintage fashion to offer – ‘owned’ not ‘pre-owned’ clothes. Founded by a fashionista Kate Sekules in 2011, the site sells the designer pieces and exceptional vintage from private collections, organised by owners themselves and come complete with stories. Take the case of Marie Rottler – a grandmother of nine, who kept four decades of her outfits pristine, complete with memory notes. One of her granddaughters revived her collection when she noticed that, not only had Marie kept her outfits from all decades pristine, but had also written notes to remind herself where she had worn them. Likewise, the site invites the people who love their clothes too much to discard or ‘soullessly’ sell them. Though the site generally bears the names of these recognisable owners there are few which operate by pseudonyms for privacy. These prominent people believe in a highly personal clothes trade. There is option of private shopping by appointment offering a small fraction of pieces in addition to facilitating personal shopping, sourcing, styling and incorporating vintage into buyers’ look. Its services include closet clearing and redistribution of surplus too.

The Way Forward

Currently, the secondhand market occupies small share in the overall fashion sector but is expected to grow immensely in future, depending on macroeconomic conditions. Regardless of global economic challenges and how it effects on the way individuals buy and sell their clothes, this segment will continue to play a major role in consumers’ lives. The affordability trend under stressed global economy, advent of secondhand retail as innovative format, acceptance and increased demand for vintage fashion, globalisation, and scaled up recycling and reusing efforts to contain negative impact of fashion on global environment will remain key drivers of this market.