While fashion retailers are collapsing in the wake of the COVID-19 pandemic, with some analysts predicting that a quarter of US malls may close in the next five years, the opposite is true for the second-hand and resale market.
A recently published annual report by the world’s largest thrift and consignment platform reveals that the total second-hand market will grow five-fold over the next five years and is projected to be worth US$64 billion, up from $28 billion in 2019.
The 2020 Resale Report, a partnership between San-Francisco-based resale platform thredUP and third-party research and analytics firm GlobalData, shows that the online resale market is booming despite the pandemic, with the second-hand market set to overtake the traditional thrift and donation segment by 2024.
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According to the report, second-hand fashion is projected to grow to nearly twice the size of fast fashion by 2029 and will make up 17% of a person’s share of closet space compared with just 3% in 2009.
The report also surveyed 2,000 female respondents and found that shoppers are getting thriftier; 66% said they plan to spend less on department stores and 44% plan to spend more on second-hand. Additionally, 82% of respondents have or are open to shopping secondhand when money gets tighter.
Gen Z consumers are leading the thrift trend, with nine out of 10 Gen Z shoppers have, or are open to, shopping secondhand when money gets tight. Driven by environmental values and frugality, these young consumers are adopting second-hand fashion faster than any other age group. This finding is echoed in Afterpay’s recently published report, Global Gen Z Report: Financial Feels, which revealed that budget-conscious Gen Z shoppers are more willing to consume second-hand fashion than their predecessors.
Hoping to keep their businesses profitable and meet the changing needs of consumers, traditional retailers are also turning to resale. American department store Macy’s partnered with thredUP, designer brand Burberry partnered with TheRealReal and luxury department store Neiman Marcus joined forced with online fashion resale website Fashionphile.
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And it’s not just traditional bricks-and-mortars retailers making the switch. In May, the Australian retail arm of non-profit organisation The Salvation Army, Salvos Stores launched their new online thrift store.
COVID-19 may have severely impacted discretionary spending, but if this report reveals anything, it’s that cash-strapped consumers are still buying fashion – just not entirely from fast fashion brands.
To access the 2020 Resale Report, click here.
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Cover image via thredUP.