Resale growth during Covid-19: sellers engage in ‘quarantine clean out frenzies’
8 Jun 2020
It’s no mystery that the fashion industry has been hugely impacted by the Covid-19 crisis. Fashion companies saw their sales plummeting as stores closed, fashion events were cancelled or postponed and consumer shopping behavior changed drastically.
But there seems to be an exception to the current bleak reality of the fashion industry: resale platforms have been reporting an increase in sales and online traffic since the start of the virus. Whether this was due to consumers using the extra time to do a thorough spring cleaning or looking to their closets for an additional source of income, the second-hand market has largely withstood the economic downturn brought about by the crisis.
In March of last year, resale platform ThredUp released its annual Resale Report that projected the secondhand market to grow from 24 billion dollars to 51 billion dollars in the next five years. By 2028, resale will be 1.5 times bigger than fast fashion and used items are forecasted to account for an average of 13 percent of people’s wardrobes. People belonging to the Millennial and Gen Z generations are driving this growth, as 18 to 37 year olds are buying pre-owned apparel, footwear or accessories 2.5 times faster than other age groups.
Another recent trend saw traditional retailers partnering with secondhand companies to appeal to changing consumer tastes and make their debut in resale. In February, Gap announced that it would be joining ThredUp’s Resale-as-a-Service program that gives consumers the opportunity to resell their clothes. Further partnerships include Vestiaire Collective and Asian fashion brand Zalora, The RealReal and Stella McCartney and Depop and Dickies.
Resale companies also have to thank their young audience groups for working to integrate the topic of sustainability into the fashion industry’s status quo. A 2018 report commissioned by British NGO Fashion Revolution showed that one in three European consumers take brands’ social and environmental impact into account when shopping.
FashionUnited wanted to find out what challenges resale platforms have been facing during the coronavirus crisis and whether they believe their increased growth to be halted by the aftermath of the pandemic. Marie Petrovicka, vice president of international at Depop, Max Bittner, CEO of Vestiaire Collective, and Natalie Tomlin, spokesperson at ThredUp, shared insights on continuing operations during the lockdown period, changing consumer mindsets, new ways to interact with consumers and future forecasts.
As countries around the world abided by lockdown measures, London-based Depop joined the list of resale companies that reported an increase in traffic numbers and elevated sales. Since April 1, the company saw a 163 percent year-over-year increase in new app signups, a 200 percent year-over-year traffic growth in the US and a 300 percent year-over-year increase in items sold. Marie Petrovicka explained that the results of a recent user survey found that “many sellers have been using Depop as an alternate source of income”.
Petrovicka also expects the increased traffic to last in the post-coronavirus era: “It has become clear that the pandemic has shined a light on the realities of the current fashion ecosystem. Depop is representative of a step in the right direction, as we value supporting young entrepreneurs and helping the fashion industry to become more sustainable. We are hopeful that our community will continue to engage with our platform beyond this moment in time.”
Depop’s Generation Z audience group of under 26 year olds are the biggest drivers of growth, often acting as ambassadors. Additionally, the platform is popular among social influencers who further increase traffic when talking about their shopping or buying experiences to their communities.
Despite the positive growth that the platform has experienced, the coronavirus has simultaneously presented the company with the challenge to adapt to the current climate. Wishing to continuously support its community, especially those who rely on resale as their primary source of income, Depop has presented its users with tools to help them carry on during lockdown.
“Implementing numerous resources, such as contactless home delivery and pick up, remote sourcing for sellers and direct and constant communication through our various channels was essential,” Petrovicka clarified.
Depop also focused on notifying sellers about making use of sanitary packing methods and scheduling USPS delivery pick-ups as safe shipping options. This has helped sellers to continue operating their Depop stores and adapt to shipping effectively from home.
We believe that we will continue to see a shift to more conscious consumer habits within the fashion industry.
In addition to ensuring that sellers could continue operations throughout the lockdown period, the company has been connecting with its audience through the “Stay at Home Sessions” interactive Instagram series, which features virtual styling sessions, live performances and tutorials every Friday.
Petrovicka also trusts that Depop’s young audience will shift consumer mindsets in a more sustainable direction in the post-pandemic world: “We believe we will continue to see a change to more conscious consumer habits within the fashion industry, and that this change will be spearheaded by the resale industry.”
The coronavirus will not impact the way Depop will proceed and it will continue to do what it is good at. “We will continue to enable our creative, entrepreneurial community to both express themselves with creative agency on our platform, as well as empower them to turn their passions into a business,” Petrovicka concluded.
Like Depop, Vestiaire Collective has also witnessed positive growth in its orders, which has allowed for a quick rebound from the initial impact of Covid-19. In early May, orders were up 54 percent in comparison to the pre-pandemic February average and deposits have since increased from an average of approximately 10,000 to 13,000 new pieces being added to the inventory every day. The company has also experienced its biggest sales day ever in May.
Max Bittner trusts that the coronavirus will not be able to hinder the growth that the resale market has been experiencing in previous years: “We believe that the current crisis will further drive the adoption of e-commerce, the consumer switch to sustainability and the increase of consumer resourcefulness as more people look to their closets as an additional source of income. All of this will accelerate the rapid growth of the resale market.”
Despite the global lockdown, Vestiaire Collective has been able to efficiently continue operations by equipping its logistics hubs with safety measures, including employee shifts, social distancing guidelines, mandatory face masks and increased sanitization of buildings. At the beginning of the pandemic, the company had to close its US logistics hub in response to an executive order of New York State. Meanwhile, after being deemed an essential business, Vestiaire Collective has been able to reopen, which, according to Bittner, “has been an honor, as the government realized what a valuable resource resale platforms are for people who want to raise funds from pieces in their wardrobes”.
As many of its key markets have been impacted by Covid-19, the resale platform has been attempting to protect and support its employees and customers. In the interest of sellers, Vestiaire Collective has reduced commission on products priced from 150 to 300 euros, allowing them to earn more and list items at a lower price. The Direct Shipping service, which grants buyers the option to bypass an authenticity check, has also been successful during this period of uncertainty. Aside from Europe, this shipping option has recently been launched in the US, with Asia to follow by the end of the year.
“Launched in September 2019, the Direct Shipping service is increasingly popular with a growing number of customers,” Bittner said. “Currently, over 50 percent of orders in the EU are fulfilled through this service, which is growing at a rate of 60 percent month-over-month.”
In order to avoid mass layoffs, the French government has introduced the ‘chômage partiel’ unemployment scheme, which offers workers an allowance of up to 1,000 hours per year per employee. A small fraction of the Paris-based Vestiaire Collective team has been able to benefit from this.
Vestiaire Collective has similarly found new ways to facilitate engagement with its customers during lockdown: “After listening to feedback on Instagram, we launched our social media initiative #HomeMadeByVestiaire, which was inspired by our community’s requests to have more insight from our team, along with tips on how to use our app and how to buy vintage,” Bittner explained.
I think customers will continue to question and change their approach to consumption and this has gained speed during Covid-19.
In April, in an attempt to further stimulate a sustainable consumer mindset, the company also debuted its “Fashion Should Feel Good” campaign. Not only did it share insights on how to reduce the environmental impact of wardrobes, but also highlighted popular sustainable brands on Vestiaire Collective’s platform.
In unison with Petrovicka, Bittner is also under the impression that consumers will continue to support sustainability once the world returns to complete normalcy: “I think customers will continue to question and change their approach to consumption and we can see that this process has gained speed during Covid-19. Resale and pre-owned is definitely an answer to this consumer demand and the current climate crisis, allowing fashion lovers to extend the lifespan of their fashion pieces and encouraging participation in the circular economy can reduce waste.”
In the future, Vestiaire Collective will integrate the flexibility needed during the lockdown period into its working procedures and authorize employees to work from home more often. Bittner concluded by saying that the company will “further increase its focus on sustainability, which is one of its core pillars, as it believes that this will be important to consumers following the crisis”.
The San Francisco-based resale platform, by also reporting increased traffic and sales, similarly conforms to the recent trend of increased second-hand growth during the Covid-19 crisis. Looking for entertainment while stuck at home, shoppers have spent more time browsing ThredUp’s website. Sales for leggings and blouses have seen a higher average over the past month in comparison to February, with 40 percent and 30 percent, respectively. In line with changing consumer attitudes throughout the pandemic, as the occasion to dress up became nonexistent, blazers and cocktail dresses have been less desired.
ThredUp pointed out that consumer demand for value and sustainability have been important factors ensuring the growth of the resale market in the past few years. The company expects this growth to be further accelerated in the post-coronavirus world, as “thriftiness” will become an even greater priority.
Though ThredUp’s distribution centers have been able to remain open for the past few months, they have been operating at reduced capacity to ensure the possibility of social distancing and enhanced hygiene. Nevertheless, as it continued to accept ‘Clean Out Kits’ with unwanted clothing, the platform did not have to stop shipping orders.
Consumers will continue to shift their spend to brands and resale platforms that are committed to transparency and sustainability.
Many have been engaging in a ‘quarantine clean out frenzy’ as they looked to declutter their closets and make some extra money: “We’ve received an influx of clean out kits and first-time sellers. We’ve been working hard to maintain the safety of our teams first and foremost as we work to process the additional items sent in,” said Natalie Tomlin, a ThredUp spokesperson.
In order to keep in touch with its audience throughout lockdown, ThredUp turned to Instagram to launch its ‘Shop Her Closet’ auction series, where customers could bid on pieces from celebrity closets, such as Whitney Port, cast member of American reality television series The Hills.
The resale platform also drew attention to how the coronavirus impacted sustainable consumption habits: “Consumers will continue to shift their spend to brands and resale platforms that are committed to transparency and sustainability in the years to come,” Tomlin forecasted.
In the post-pandemic era, ThredUp will carry on with its mission to inspire the next generation to think ‘secondhand’ in the path towards a circular fashion future.
- Depop, a global resale marketplace where consumers can buy, sell and share items, was founded in Milan in 2011 by Simon Beckerman. With its headquarters in London and offices in Manchester, Los Angeles, New York and Sydney, the company employs over 200 people.
- Sellers can create their own instagram-like feed, where they can list unwanted items, set the price and then ship them directly to the buyer.
- The platform’s community consists of over 15 million people and attracts stylists, designers, artists, collectors, vintage sellers and influencers across fashion, design, art and music.
- Beckerman told the financial times in 2017 that the platform sees about 350,000 to 400,000 active users in a day, with 70 percent female and the majority aged between 16 and 26. Of the approximately 22,000 sales each day, the company takes a 10 percent cut.
- The luxury fashion resale platform Vestiaire Collective, whose current CEO is Max Bittner, was launched in Paris in 2009 and is now used by over 8 million members across 50 countries worldwide.
- Averaging 40,000 new item listings from over 3,500 brands each week, the company is well known for its authenticity and quality control processes.
- After listing and successfully selling items on Vestiaire Collective’s app, the company checks sellers’ items for quality and authenticity and then sends them on to the buyer.
- Recently, as part of the ‘Direct Shipping’ model, trustworthy sellers have been able to acquire a ‘trusted’ seller badge’, allowing them to ship an item directly to the buyer by skipping the authentication process.
- Resale platform ThredUp, which originally started out as a men’s shirt swapping service, was founded in 2009 by James Reinhart and now adds over 40,000 new arrivals to its site every day.
- Sellers can order a ‘Clean Out Kit’ bag free of charge and fill it with their unwanted clothes. After sending it back to the company, ThredUp chooses what items are fit for resale, photographs them and lists them on the website.
- Once an item is sold, the seller will receive a percentage of the sale in cash or shopping credit.
Photo Credit: ThredUp, Vestiaire Collective, Depop