Driven by Gen-Z, it’s expected that by 2023, used clothing will make up 27% of the average resale shopper’s closet
Joint study by BCG and Vestiaire Collective finds secondhand fashion and luxury market has tripled since 2020 with no signs of slowing down
PARIS, October 5, 2022 /PRNewswire/ — The estimated value of the apparel, footwear and accessories resale market is between $100 and $120 billion globally more than three times larger than in 2020, according to a new study by Boston Consulting Group (BCG) and Vestiaire Collective, a global platform for used fashion. The report entitled What an accelerating second-hand market means for fashion brands and retailers, will be released today.
The second-hand market already accounts for 3% to 5% of the total clothing, footwear and accessories sector and could grow to as much as 40%. While resale items make up about a quarter of second-hand buyers’ wardrobes, they are projected to make up 27% of wardrobes by 2023. Gen Z consumers are the most likely to buy (31%) and sell (44%) second-hand items, with Millennials close behind.
“At BCG, we have analyzed the global resale market in detail since its inception,” he said Sarah Willersdorf, Global Head of Luxury at BCG and co-author of the report. “It is now certain that consumers have embraced second hand and it is changing the way they buy and sell their clothes. There is a tremendous opportunity for brands entering this market to attract new customers while also targeting existing buyers who are motivated by sustainability, affordability and exclusivity.”
Sustainability is an increasingly important driving force for second-hand buyers
The report is based on two global surveys of 6,000 consumers conducted in 2020 and 2,000 consumers in 2022 to better understand their engagement in the resale market. While affordability was cited as the top reason for buying second-hand items by more than half of respondents, this trend is declining. The variety of products was named as the second largest driver behind the consumption of used goods. 40 percent of shoppers see second-hand as their way of consuming fashion sustainably, and just as many choose the second-hand market for the wide range and unique pieces it offers. The thrill of the hunt and the opportunity to barter with vendors are also increasingly popular factors in buying second-hand clothing, with 35% of respondents citing this as their driving force.
Salespeople are motivated by detoxing their wardrobe but put off by lack of time
Sixty percent of thrift sellers want to clear out their closets and make room in their closets. The same figure also reported recovering the residual value of their item and spending it on either used (39%) or first time (20%) products or in general (39%).
While selling is an increasingly accepted buyer behavior, not all buyers have themselves sold items in the used market. Thirty percent of non-sellers have something to sell but didn’t find time to list their items. Instead of selling, 30% of respondents would rather give their items away to friends or charities. A quarter of shoppers said they didn’t know what items they were going to sell from their closet.
“Vestiaire Collective is the leading global app for coveted pre-loved fashion, created in 2009 with one mission: to transform the fashion industry into a more sustainable future,” said Fanny Moizant, Co-Founder and President of Vestiaire Collective. “We are proud to see that sustainability and environmental awareness are increasing buying and selling drivers for customers, but also for companies that want to integrate circular economy into their business model. However, there are many ways for brands to explore this market, internally or with them as an external partner, working with an established platform like Vestiaire Collective has significant benefits, including access to a community of over 23 million reseller customers worldwide, as well as more than a decade of data, price, logistics and fulfillment expertise.”
Successful in the Brave New Resale World
Almost 60% of consumers have either discovered a brand or bought it second-hand for the first time, underscoring the huge opportunity for brands to increase their reach to new customers by participating in the resale market.
The report outlines three models that brands or retailers should consider when entering the second-hand market.
- Owning and operating own resale capacities: By reselling their own collections online and in stores, businesses can maintain control of their brand and pricing structure while still earning double the margin for the same item. However, this approach can be resource intensive, and there can be limited customer reach, and volume and inventory risks.
- Partnership with a resale platform: This model offers a mutually beneficial solution. The platform takes care of the logistics, payment processing, and product validation while gaining more traffic, promotion, and credibility from the retailer. In turn, the brand can resell its products, increase awareness and attract new customers cheaply without having to engage in resale.
- Consider reselling without making a significant investment or long-term commitment: This option involves providing a retail partner with modest in-store sales space and developing discount and incentive schemes for reselling second-hand clothing to retailers. These lighter solutions help increase traffic and audience reach, allowing players to participate in the circular economy while mitigating the risk associated with counterfeit goods.
Download the publication here: www.bcg.com/publications/2022/the-impact-of-secondhand-market-on-fashion-retailers
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About Vestiaire Collective
Vestiaire Collective is the world’s leading app for coveted pre-loved fashion. It is dedicated to transforming the fashion industry into a more sustainable future by promoting the circular fashion movement as an alternative to overproduction and overconsumption and the fashion industry’s wasteful practices. Inspired by the “Long Live Fashion” philosophy, it offers its community – those who live for fashion and care about it for a lifetime – inspiration, tools and features to drive change by selling unique, loved pieces by everyone and buy other people’s wardrobes. The platform is unique thanks to its highly engaged community and rare, coveted inventory of 5 million items. Introduced Paris As of 2009, Vestiaire Collective is a Certified B Corporation® with offices in Paris, new York, los Angeles, Hong Kong, Seoul, Singapore and a tech hub in Berlin. Find out more by downloading the app, visiting www.vestiairecollective.com and following @vestiaireco on Instagram.
SOURCE Boston Consulting Group (BCG)