Secondhand: A Cinderella Story

Once upon a time, non-new items were dismissed as used, pre-worn, or pre-owned, drenched in negative connotations. Secondhand was bought only if you couldn’t afford something new. Vintage stores were seen as musty, dingy, and if nothing else, just a good place to buy a costume for a theme party. To say this industry has had a glow up is an understatement.?

Today, those same shops are coveted and the inventory is described as pre-loved, vintage, thrifted, and resale. They’re flooded with hopeful shoppers excited to discover incredible gems. In fact, 72% of those who consider themselves thrifters say they feel proud to share with others that their outfit is secondhand. Between in-person stores like Crossroads Trading and Buffalo Exchange to online stores like Depop , Vestiaire Collective , The RealReal , Rebag , FASHIONPHILE , and countless others, the resale market is more than booming; it’s becoming very saturated.?

How much so? In 2022, Americans spent as much time shopping recommerce online as they did browsing social media. 62% of Gen Z and Millennials say they look for an item secondhand before purchasing it new, and 2 out of 5 Americans (mostly Gen Zers and Millenials) sell secondhand as a primary or secondary form of income. Global resale apparel is a $72 Billion industry and is on track to hit $218 Billion by 2027, if not earlier.?

This is a movement, not a moment.

Now, brands have recognized that resale is a massive additional revenue stream for them and provides an opportunity to connect with their customers in a new way. Brands themselves are now owning the resale process of their own products which allows them to price, authenticate, and resell their own vintage collections.“Imagine walking into a luxury store with a handbag you bought three years ago. The sale associate is able to authenticate it on the spot — as easy as banks authenticating your account when you tap your credit card — and you receive store credit that matches the market value. You can either spend this on new items or pre-owned ones, or you can resell the bag yourself knowing its true value. This is the future of resale,” wrote Bella Webb in Vogue Business in March 2022. This is already becoming the reality.?

In order to create a whole new segment of their existing business, they partner with emerging Saas, software as a service, companies. Archive , Recurate (acquired by Trove Recommerce) , Trove , LUXCLUSIF , and Reflaunt work with brands directly to build their own customized, in-house, resale programs. This means instead of leaving it up to the thrifting gods or scouring the entirety of the internet to hopefully come across the item you’re looking for, you can now go directly to the brand to find the authenticated item. Shopping circular just got even easier.?

So what’s next? Where resale is today, rental will be tomorrow.?

The rental industry is exploding. Depop has more than one-third of all of Gen Z on their app, and 45% of their users are buying secondhand clothes only. Two in five college students say they buy clothes for events that they're likely to wear only once, so renting is the perfect alternative to buying for single use. The global rental apparel market is more than a $1 billion industry and is expected to grow to $3.3 billion dollars by 2027 if not sooner as well.?

RentTheRunway.com was the first generation of apparel rental companies that paved the way for brands to understand that renting is a viable option. Today, HURR , FashionPass , Armoire , Le Tote , and so many more take inventory from brands and rent it for them. Sometimes they own the inventory themselves and sometimes they simply rent it out for the brands, but they are a vehicle for rented fashion from brands.?

But with so many other rental companies taking a cut into their inventory just like independent resale shops did, the brands want in and now have the opportunity to take the reins and establish yet another in-house revenue stream. Cue CaaStle , the leading name in fashion rental software for brands which launched Vince ’s Unfold and has been prolific since. It’s becoming commonplace to see brands own the trifecta of revenue: newly designed collections, resale, and rental compounding to create an even more robust business model and positioning them to be even more autonomous.?

From previously disowned inventory left only for those that weren’t able to acquire brand new pieces, the secondhand market has traveled a full 180 degrees. Everyone wants a piece of it, and the competition is stacked between both independent resale shops and sites and the Saas companies to compete with each other for acquiring the most desirable brands.?

Where do we go from here? The big white space is peer-to-peer rental. Join the waitlist here: https://brrwscty.com/?

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Sources: Vogue Business, Business of Fashion, Bain & Company, Reuters, AdWeek, ThredUp, The Real Real, Ebay, Piper Sandler, Recurate, McKinsey & Company, Credit Karma x Qualtrics, The Balance