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Preowned fashion is grabbing more of the consumer’s wallet share, especially among those 40 and younger.
BCG’s recent report with B Corp luxury reseller Vestiaire Collective says secondhand could account for 27 percent of the typical resale shopper’s closet by next year, up about 2 percent from current numbers with Gen Z most interested in buying and selling at 31 percent and 44 percent, respectively. Millennials follow closely behind.
“We are proud to see that sustainability and environmental awareness are increasing drivers for customers to buy and sell, but also for companies who wish to integrate circularity into their business model,” Fanny Moizant, Vestiaire Collective cofounding president, said. “While there are many avenues for brands to explore this market, internally or with an external partner, collaborating with an established platform like Vestiaire Collective has significant advantages, including access to a community of over 23 million resale consumers worldwide, as well as over a decade of data, pricing, logistics and fulfillment expertise.”
The report tapped 6,000 consumers in 2020 and another 2,000 this year to gauge how people are interacting with a resale economy estimated at 3 percent to 5 percent of the broader apparel, footwear and accessories market and seen reaching about 40 percent. It suggests a variety of opportunities for brands, including discovery, as nearly 60 percent reported learning about or first purchasing a label through a resale platform.
Consumers also revealed their motivations for shopping secondhand. Budget-friendly prices still lead, according to more than half of survey takers, though the report described affordability as a “declining” trend. Rather, the choice and selection found through resale are becoming key drivers for 40 percent, with the same percentage also saying purchasing secondhand makes them feel better about responsibly consuming fashion. That’s followed by the 35 percent who enjoy the “thrill” of finding goods no longer populating first-market channels.
Many consumers, at 60 percent, still seem to be Marie Kondo-ing their closets and giving unwanted garments the old heave-ho, according to the report. The same percentage wants to recoup some of their investment in those items, with 39 percent aiming to spend their gains on new-to-them secondhand goods.
“At BCG, we have been analyzing the global resale market in detail since its infancy,” said Sarah Willersdorf, BCG’s global head of luxury and coauthor of the report. “It is now certain that consumers have embraced secondhand and it’s changing the way they buy and sell their clothes. There is a tremendous opportunity for brands that enter this market to capture new customers while also appealing to existing shoppers motivated by sustainability, affordability, and exclusivity.”
ThredUp outlines impact
With so many brands touting their dedication to reducing waste and being planet- and people-friendly, impact reports have become more common to show the actual data backing up those sustainability claims. And online resale platform ThredUp is the latest to release its impact report, outlining the company’s environmental, social, and governance (ESG) strategy and detailing the progress the company made across ESG initiatives in 2021.
“ThredUp’s core purpose and mission are rooted in circularity,” said James Reinhart, co-founder and CEO, ThredUp. “It is ingrained in everything we do. I am proud to be sharing our first annual Impact Report that describes—full circle—how we are helping our people, our communities, and the planet while growing a sustainable business.”
Looking at its environmental impact, ThredUp reported that since its inception in 2009, the company has processed 137 million items and displaced 1.3 billion pounds of carbon emissions to date.
And while the company’s core business boasts a 95 percent sell-through rate, ThredUp also has focused on refining its approach to managing items in its aftermarket business, which includes pieces that don’t sell.
Approximately 60 percent of the items ThredUp receives are listed on its marketplace, with the remaining 40 percent going to the company’s aftermarket program. This also includes Rescue Box items, which are pieces that don’t fit the criteria to sell on the traditional ThredUp marketplace and are sold in bulk according to categories such as shoes and sleepwear. Through 2021, the company has sold nearly 2.5 million items through its Rescue channel, diverting more than 1.48 million pounds of clothing from third-party aftermarket channels.
The company also launched its Resale-As-A-Service (RAAS) arm in 2018 which allows apparel brands to offer resale items on their websites. As of year-end 2021, ThredUp counts 28 brand clients in the program, including Adidas, Fabletics, Madewell, Crocs and Gap.
Tracking emissions has also been a major part of ThredUp’s sustainability measures. Overall, the company’s emissions increased 17 percent to 154,942 MT CO2e emissions, primarily driven by a 24 percent increase in international shipping. International air freight was responsible for 96 percent of the retailer’s international shipping emissions. ThredUp doesn’t use air freight for U.S. shipments, and by consolidating orders, U.S.-based shipping emissions decreased by 54 percent in 2021. And while emissions increased overall, direct emissions dropped from 759 MT CO2e in 2020 to 691 MT CO2e in 2021.
Social impact and employee experience also factored into ThredUp’s 2021 goals. The company directed $20,000 on behalf of the Future Fund, a philanthropic fund that gives grants and investments to nonprofits and socially conscious companies. The retailer also devoted $75,000 to charities such as Stand Up to Cancer and Feeding America through shopping events.
To improve its employee experience, ThredUp launched several programs designed to make working for the company more equitable and enjoyable. Two new initiatives include a pandemic management task force and an enhanced employee wellness program. ThredUp also launched an employee-led diversity, equity, inclusion and belonging committee, tasked with strengthening diversity and representation through ongoing initiatives. The company also established board oversight over ESG and an employee-led corporate social responsibility (CSR) committee.
In its recruiting practices, ThredUp implemented a diversity sourcing checklist in 2021 to enhance recruiters’ ability to engage a more diverse talent pool. The company also offers employees multiple learning and development programs, such as ThredUp University which includes interactive workshops led by internal and external subject matter experts, BizUp, a yearly mini-MBA course and fireside chats with leadership experts, among others.
In 2021, ThredUp launched a new career website with a focus on the company’s diversity, equity, inclusion and belonging commitment. Looking at its demographics, 70 percent of ThredUp’s workforce is female and 72 percent is minority. And among senior leadership, 30 percent is female and 30 percent is minority.
And those moves seem to be paying off for the company, as 95 percent of employees say they trust the decisions of senior leadership, and 88 percent say they feel like they belong at ThredUp. Additionally, 92 percent of ThredUp employees say their opinion seems to count at the company, and 83 percent of employees say people from all backgrounds have equal opportunity to succeed.
“Together, we are a collective inspired by our mission,” said Natalie Breece, chief people and diversity officers. “We believe we all have a purpose in the work we do and the impact it creates.”
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