How the Resales Boom Is Evolving
Growth in the second-hand retail sector is faster than ever, from high-end to mass market. Here’s our update on a sector full of innovation.
Consumers are warming to second-hand as a more sustainable form of consumerism that enables them to score discounts and showcase savvy sourcing. The second-hand clothing market alone is growing 24 times faster than traditional retail (ThredUp, 2018). For more context on recommerce, see Pause & Pulsate (part of our Liquid Retail series), the fashion-focused A Sustainable Journey, and Budget Retail's Quality Drive.
Refining the Second-Hand Store: Brands are reimagining resale shops as lifestyle hubs in high-profile locales.
- Expansive Luxe Experience: American luxury recommerce player The RealReal has opened a 12,000 sq ft LA store featuring sections for womenswear, menswear, kidswear, sneakers, handbags and jewellery, plus a café. “Think of it as a resale department store with a full lifestyle assortment,” chief merchant Rati Levesque says. This Melrose Avenue store is The RealReal’s second permanent location, following a Manhattan launch last year (see Retail City Guide, December 2017). As in New York, there’s a focus on services, including repairs and alterations, authentication, valuations and expert workshops.
- Communal Magnet: UK-based social shopping platform Depop, which claims to have nine million users, opened its first store earlier this year in LA (see blog). It has now unveiled a similar concept in New York City: a 1,000 sq ft space designed to deepen engagement with and among Depop’s young, subculture-immersed fans (see Instagangs: Teen Resale Rulers). Depop sellers can photograph products in a dedicated set-up and glean advice. “It’s a chance for our community of creatives to spend time together IRL [in real life] and meet the people behind the shops,” according to chief executive Maria Raga. Inventory is limited to a few local brands.
- Thrift Facelift: American charity retailer Goodwill has introduced Curated – a “best of" concept much smaller than its typical stores and aimed at younger, trend-conscious customers. The first location, in Manhattan, is stocked with stylist-selected garments.
Strategies for Reclaiming Resales: Brands are starting to profit from the second-hand boom by pulling resales back in-house or partnering with recommerce platforms.
- Bridging Retailers & Resellers: Start-up Reflaunt, still in pre-launch, is positioned as a tool helping retailers participate in resales. Consumers would be able to list no-longer-wanted products via the original retailer’s site, with Reflaunt pushing these out to second-hand platforms. Post-sale, consumers get shopping credit at the original retailer. Blockchain would enable traceability, tracking a product from the original sale. Interestingly, Walmart is also exploring a blockchain-based resales concept.
- Grabbing Grey Market Sales: TrueFacet has become the first e-commerce platform for jewellery and watches to sell certified refurbished goods in partnership with brands. The seven launch partners include Raymond Weil, Fabergé and Frederique Constant. The scheme helps brands remove inventory from unofficial ‘grey market’ channels and ensure a high-grade experience for first-time, younger buyers (pre-owned goods include a new manufacturer’s warranty). TrueFacet shares data with participating brands to help them determine which products to list.
Once seen as soiling a brand’s luxury allure, the pre-owned sector is coming to be regarded as an opportunity for watch brands. In June, Swiss luxury group Richemont announced its acquisition of UK second-hand retailer Watchfinder. Meanwhile, Swiss brand Audemars Piguet is planning to start selling pre-owned watches in its domestic outlets this year – potentially expanding the initiative into the US and Japan. Customers would be able to trade in watches for credit towards new ones.
- Facilitating Customer Trading: US outdoors brand REI, a retail co-op that offers $20 lifetime memberships, will introduce periodic “gear swaps” for members at select stores this autumn. REI has also expanded the used gear and apparel website it began testing 10 months ago – a trial it says was “successful beyond expectation”.