When Etsy snapped up Depop for 1.6 billion dollars investors took note. Dubbed the “resale home for Gen Z” by Etsy CEO Josh Silverman, the app, which counts over 30 million registered users, has enormous potential to be scaled.
Expansion would see the company grow its share in a booming and growing resale market, which according to analytics firm GlobalData is set reach 64 billion dollars over the next five years.
After the pandemic a “purge surge” is looming, says ThredUp. 80 percent of US consumers plan to refresh their wardrobes by clearing out the items they no longer want or buying something new. With sustainability top of consumer’s minds, shoppers are looking at ways to reduce their environmental impact and are embracing circularity in fashion.
Data from Edited shows the fast fashion cycle of mass product drops has returned to new heights after the brief Covid disruption. In the UK alone, new product arrivals online for May were up 56 percent YoY and 37 percent on 2019.
Demand for second-hand fashion can be measured by analyzing the age of stock available on resale sites, says Edited. Products at Vestiare Collective show signs of rapidly selling through, with the majority of goods currently stocked arriving within the past three months and only 4 percent of products being listed for over a year. In comparison, between 22-30 percent of listed products have been online for over a year at traditional luxury etailers.
During lockdown, resale firms such as Depop, Ebay and Vinted have benefitted from consumers being stuck at home, with sales and listings of items spiking.
Neil Saunders, managing director of GlobalData, told the BBC: “Over the next ten years the resale clothing market will become larger still, fuelled by an interest in sustainability, a desire for uniqueness, and the rise of the participatory consumer who wants to trade as well as buy.”
A shift in perception
A decade ago consumer attitudes toward pre-owned clothing was decidedly negative. Today, however, any stigma around second-hand fashion being uncool or unhygienic has dissolved with customers now proud of their thrifted finds. Even fashion’s most fickle demographic, Gen Z, has given second-hand shopping their blessing, Helen Riley, Fashion Acquisition Manager at eBay, said in an interview with Edited.
In a joint report between Bain & Co. and Depop, 75 percent of the platform’s users surveyed (90 percent of which are under the age of 25) said they shop second-hand to reduce fashion consumption. Additionally, 55 percent said their motives were “to find one of a kind pieces,” while 45 percent use Depop “to tap into trends,” proving that while Gen Z are often portrayed as the figurehead generation of sustainability, trends remain paramount to their wardrobes.
Clothing production is in overdrive
By 2030 the global fashion industry is expected to discard more than 134 million tonnes of textiles per year. Any sign of a manufacturing halt in the early days of the pandemic are now well and truly behind us.
Data from Edited show levels of new product arrivals across the UK, Germany and Spain returned to pre-pandemic volumes and eclipsed them. Consumers are purchasing more than ever, where a reported 155.9 million US shoppers are preparing to purchase new items after the pandemic is over. This makes circular fashion a fundamental cornerstone of sustainability, underscoring the need for retailers to be upcycling and repurposing pre-existing goods.
The numbers don’t lie
The RealReal, the world’s largest resale marketplace for luxury goods, had a 99 percent sell through rate in 2020. Furthermore, since its inception in 2011, the company saved 17,023 metric tons of carbon and 827 million liters of water.
Getting in on the act
Other companies are pivoting their strategies too. Nike back in April launched its Refurbished program where pre-owned shoes will be graded, sanitized, restored and then resold at 15 stores at a reduced price based on their condition. Luxury etailer MyTheresa recently partnered with Vestiaire Collective to launch a resale service by inviting its top clients to sell their pre-loved luxury handbags online in exchange for store credit.
One answer as to why resale is fashion’s most bankable new category is that Gen Z, who are set to make up 40 percent of luxury sales by 2035, is a cost-driven demographic, and very price savvy. By forging a relationship early in their shopping life, the only way is up.Data courtesy of Edited