The resale retail market is on pace to reach $41 billion by 2022, and 49% is in apparel, according to a report released by second-hand apparel website ThredUp. Citing an example of the category's popularity, the company said 70% of its customers hadn’t bought used clothing before purchasing on ThredUp.
Resale is growing 24 times more than overall apparel retail (which is growing 2%, with off-price growing 7% and traditional apparel sales growing 9%), according to the report. Forty four million women shopped secondhand last year, up from 35 million in 2016. That breaks down to one in three women 18 years and older and 40% of 18-24 year olds.
Resale’s surge began in 2008, and now those shopping for used items plan to buy twice the amount of used apparel in the next five years, according to ThredUp.
Resale taps into the same treasure- and bargain-hunting penchant that drives off-price retail. Shoppers in the space see an opportunity to acquire nicer things, ThredUp found. Two thirds said they buy better brands than they would if shopping at full price. But resale shoppers aren't all strapped for funds considering 13% are millionaires, ThredUp found.
While many U.S. full-price retailers (particularly department stores) are experiencing soft consumer demand, the "re-commerce sector" is thriving, and online resale in particular is one of the fastest-growing sectors in retail, according to a report last year from Coresight Research. The total U.S. apparel resale market will grow at a compound annual growth rate of 13% from $18 billion in 2016 to $33 billion in 2021, according to that report, which was emailed to Retail Dive.
Resale is attracting both customers and investors. ThredUp, which is a managed marketplace offering all brand tiers, has garnered $130 million in funding. Meanwhile, online luxury consignment shop The RealReal has tapped $173 million; and marketplace Poshmark, also offering all brand levels, has had $153 million in funding. Other resale players include Rebagg, Depop, Tradesy and Grailed.
To ThredUp co-founder and CEO James Reinhart, the growth of resale, subscription, direct-to-consumer and other models are fundamentally changing apparel buying. "The closet of the future is going to look very different from the closet of today," he said in a blog post. "When you get that perfectly curated assortment from Stitch Fix, or subscribe to Rent the Runway’s everyday service, or find that killer handbag on ThredUp you never could have afforded new, you start realizing how much your preferences and behavior is changing."