The tribe of fashion savers is growing. ThredUp invites brands to come on board.
The business model of the fashion industry is based on planned obsolescence. Thousands of fashion brands launch brand new collections every season, and every five to seven years there are predictably major shifts in fashion trends, all designed to stimulate a slew of new fashion purchases.
But people and the planet are paying a heavy price for succumbing to the fashion industry‘s obsolescence plan. According to McKinsey, in 2014 the fashion industry produced enough clothing to supply almost 14 unique items for every living person on the planet, and since then the number has undoubtedly increased.
By constantly bringing new products to market, the industry produces about 10% of global greenhouse gas emissions, uses more energy than the aviation and shipping industries combined and emits 20% of the world’s wastewater, while also being the second most water-using industry. intensive industry in the world.
As the industry works overtime to clean up its deeds, fashion’s underlying obsolescence business model remains unchanged. But it’s not sustainable as consumers become increasingly aware of its price. They are beginning to break the vicious circle of consumption on which the fashion industry is based, which is expensive for them and harmful to the environment.
In the breach, ThredUp offers fashion brands an alternative to get on the right side of the environment and satisfy consumers’ desire for something new to wear; only the new from ThredUp is something old from another consumer’s closet.
Called Resale-as-a-Service (Raas), ThredUp enables fashion brands and retailers to expand their business model to sell new and gently used items to serve the growing number of conscientious consumers who have a role in saving money want, the environment. ThredUp calls these customers “savers.”
Unlike the old savers who were forced to live frugally, the modern generation of savers, while still interested in saving money, are increasingly motivated to change their shopping habits to make a real difference in the world .
“When we debated using the term ‘saver’ in our communications, we wondered if that would mean things were cheap or low quality,” said Anthony Marino, President of ThredUp. “But we discovered it was a term that evoked a non-desirable lifestyle and became an asset for us to connect with shoppers who care about enduring value, sustainability and a new way of shopping. “
Another driver of the frugal lifestyle is that savers receive a psychological reward for their new shopping habit. “Frugality is like a sport. It takes a bit of work to sort through a lot of things, but bargain hunters get an endorphin boost when they find Diane von Furstenberg’s wrap dress for $39 instead of $139. Today it’s more of a badge of honor for thrift than a stigma.”
That’s why 72% of consumers who consider themselves bargain hunters are proud to share their used finds with others, according to a GlobalData survey of 3,500 American adults, published in the tenth edition of ThredUp’s 2022 Resale Report became.
Thredup estimates that more than half of US consumers are or have the potential to be bargain hunters. About 57% of consumers resold clothes in 2021 and more than half (53%) said they bought secondhand in the last year, up 22 points from 2020.
Thrifting has become such a thing that 41% of those who describe themselves as thrifters buy secondhand first, and they’re passionate about it. Almost half of the consumers who bought second-hand clothes in 2021 bought ten or more used items.
Profit from resale
As frugal lifestyles grow, the livelihoods of fashion brands are under threat, particularly in the North American market, where the second-hand clothing market is projected to grow 16 times faster than the first-hand fashion market by 2026. This is where ThredUp can help brands bridge the gap with its RaaS service.
“Brands and retailers are starting to realize that the next wave of growth in fashion is resale,” Marino shared. “Nearly 80% of fashion and retail brand executives surveyed said their customers are already buying used. You are now forced to ask, ‘What is our resale strategy?’”
To date, only 41 brands offer resale as a product offering, according to ThredUp, with the vast majority – 33 in total – being new to the business and having opened their resale stores in 2021 or the first three months of 2022. And these are big brands with a loyal customer base who count on those brands to be responsible to them and the environment, including Eileen Fisher, Lululemon, REI, Patagonia, Levi’s and Madewell.
Recognizing that resale is a growth opportunity for established brands, but one that requires a whole new set of skills that ThredUp has mastered, it offers brands two ways to get on the resale bandwagon – a take-back program that pays brands for closet cleaning Out Kits to customers to convert their used clothing and accessories from any brand into credit for their brand and a branded online resale store to add resale on a brand’s own e-commerce site.
Geographic Positioning System
Fashion brands that offer resale send a strong, reinforcing message to customers that the quality of their products is exceptional, driving brand growth in both the primary and secondary markets.
We’ve long known that luxury brands partly justify their high prices because their products hold their value over time. For the next generation of Gen Z and Millennial consumers, value retention is becoming a consideration, not just for luxury but for every fashion purchase, with 46% saying resale value has now become part of their fashion buying equation.
“Consumers are always looking for smarter alternatives,” Marino said. “There is something inherently smart about thrift. It’s a guiltless pleasure, not a destructive form of consumption, but a mindful way to consume.”
And he continued: “It’s really smart for fashion brands to stay ahead of resale trends. You are at a fork in the road. You can either bury your head in the sand or start and learn. Retailers who move into resale have a distinct advantage and a higher share of the wallet by combining new items with used clothing in the same experience.”
And finally, fashion brands that integrate resale into their existing business model can buy some time to overhaul their current manufacturing processes, which Kearney says doesn’t work so well.
In Kearney’s latest Circular Fashion Index 2022 report, the industry index average rose to 2.97 out of ten, from 1.6 two years ago, to measure fashion brands’ efforts to extend the lifecycle of their clothes and reduce their environmental impact.
“I think the best piece of clothing is what’s already there,” said Theanne Schiros, an assistant professor at the Fashion Institute of Technology and a senior researcher at Columbia University’s Materials Research Science and Engineering Center. “The best stuff is the stuff that already exists. It’s really, really important to keep things in the supply chain in as many loops and cycles as possible.”
ThredUp wholeheartedly agrees, giving brands a new loop in the fashion supply chain cycle.