Is brand owned resale the future of retail?

The resale market is booming. Sites like The RealReal, Grailed, and Vestiaire Collective are seeing consistent growth. Last month, FashionUnited reported the resale market could more than double by 2026. In January, Forbes even declared resale the "star of retail" in 2022.

The resale economy has a 25 to 30 billion valuation, and McKinsey and Company is estimating the sector will see 10 to 15 percent annual growth in the next decade. While brick-and-mortar resale stores still make up the bulk of secondhand sales, digital channels now have almost 30 percent of the market share.

Secondhand stores and these burgeoning digital retailers used to dominate the resale market, but companies are starting to launch their own resale channels. Multi-brand retailers, including Neiman Marcus, Net-a-Porter, and Farfetch, are starting to take resale into their own hands. Outside of the luxury goods sector, Lululemon has launched its own resale program. Last September, JD.com also launched its own resale platform.

What was once mostly left up to independent retail stores is slowly shifting to the hands of first-hand retailers themselves. Isabel Marant launched Isabel Marant Vintage in June 2021. Gucci also entered the resale market with vintage items as part of Gucci Vault in September. Kering also purchased a 5 percent stake in Vestiaire Collective. Neiman Marcus acquired Fashionphile to get its piece of the secondhand pie.

Brand-owned resale is looking like a huge part of resale's future. However, getting there successfully won't be an easy feat. Retailers will need to figure out reverse logistics, train staff to authenticate, and figure out how to scale sustainably. The future retail model, especially for large corporations, is looking like a combination of mainline, outlet, and resale.

Companies that rarely discount at their mainline stores have launched resale. Shoe company Allbirds rarely if ever does sales, but in February they launched a platform called ReRun for gently used footwear that has been returned to the stores. Allbirds customers receive a 20 dollar discount for handing in their old shoes for the purchase of new items.

Danish retailer Ganni recently launched its own resale marketplace with the help of tech company Reflaunt, which connects brands with secondhand marketplaces around the world. Another Tomorrow launched resale in 2021, and due to their scannable QR codes, it's possible to see if the clothes are really from the brand.

As consumers' demands for sustainability increase, it is only logical that brands want to control their own resale channels. Fashion production can produce a ton of waste and use gallons of water. Controlling their own resale channels while reducing production can allow companies' profits to grow.

As supply chain issues are making it hard for brands to produce, more consumers are also being driven toward shopping secondhand. After the COVID-19 lockdowns, consumers are also thinking about shopping more sustainably.

There is also an increasing shift with more brands creating resale platforms directly on their e-commerce websites. Net-a-Porter's off-price channel, The Outnet, recently launched resale to attract both outlet and digital resale consumers.

As consumers become more invested in sustainability and brands work toward sustainability, brand-owned resale only stands to grow. Retail continues to bend toward the needs of the customer and the environment.