The Resale Fashion business should be considered in relation to the landscape of Fashion as a Service (FaaS), or how experience is getting over product ownership. In previous posts, TFR already introduced subscription boxes model and rental clothing including success cases such as The Trunk Club or Rent the Runway.
When describing Circular Fashion, reuse was one of the main drivers to foster sustainability in the fashion industry. Reuse means increasing the lifespan of a product and empowers clothing rotation. It’s time to connect to circular economy and update our closets to those ethical principles, as already commented in Sustainability starts in your closet.
As seen in previous articles, Modern Liquidity is changing the rules. Retail players that will adapt faster to the sharing, experience, customization and sustainable economy will be more likely to prevail. The ones betting for immediacy will succeed, not only in terms of product ownership but freshness experiences.
According to Thredup annual report (2019), secondhand market will reach $51B in 5 years with millennials and Gen Z adopting secondhand 2.5x faster than other age groups.
The Closet of the future: Apparel shopping basket contribution by segment, channel and business model (GlobalData Market Sizing and Growth Estimates, 2019)
Furthermore, the average number of items in consumer’s closet is declining from 164 in 2017 to 136 in 2019 (GlobalData survey). Department stores and “Other retailers” are decreasing their contribution or market share (in units per closet). It is also important to remark that Mid-Priced specialty retailers (GAP, J.Crew) are decreasing their contribution as the fashion industry is polarizing.
Brands positioned in the middle of the fashion pyramid will struggle to compete in a market where low-cost, fast-fashion brands and luxury brands are capturing their usual customers. In fact, Scott Galloway predicts in FOUR, his latest book, that Alexa will kill brands (Alexa is Amazon’s Virtual Assistant) as discussed in the New Fashion Retail Paradigm.
Circular Fashion, a brand DNA
Patagonia, the activist company, business pillars are quality and environmentalism since day one. The result is longevity products supported with Patagonia’s sustainability capabilities such as Worn Wear, that allows customers to trade in their older gear for credit towards buying new products from the company.
One of the most responsible things we can do as a company is make high-quality stuff that lasts for years, so you don’t have to buy more of it. Patagonia
Within the circular economy ecosystem, we can find companies that bet on product reuse, an important pillar of the wheel that increases product lifespan and allow customers to experience the sharing economy. Reuse is about the experience, not the product.
Some of the companies leading the Apparel Reuse Market are:
THREDUP
ThredUp is a fashion resale platform that allows consumers to buy and sell secondhand clothing. Founded in 2009 in Massachusetts and headquartered in San Francisco, ThredUp is part of the Collaborative Consumption Movement which encompasses the sharing economy.
Today, ThredUp is the world’s largest fashion resale marketplace with over 35k brands, from Gap to Gucci. Their UPcycle program is a new online platform that connects brands and retailers in a fashion circular economy model. Customers can turn their old clothes into Reformation or Cuyana, for example, niche brands from the Long Tail.
Regarding its offline presence, Thredup launched IRL (In Real Life), a thred up in a store. This is a series of stores, pop-ups and partner shops were people can bring its used clothing. Nowadays, the company has 4 locations in California. On average, ThredUp accepts about 40% of the items and payout is around $40.
In 2018, ThredUp launched a line of clothes designed for the resale thanks to using transactional data. Their objective is to produce what customers really need or search for.
VESTIAIRE COLLECTIVE
Vestiaire Collective was founded in 2009 in Paris and is a global marketplace enabling people to buy and sell clothing, shoes, bags and accessories, watches, jewelry, etc. Their international community is composed of over 7 million fashion members located in over 50 countries across Europe, the United States, Asia, and Australia.
How it works? Once an item is sold, Vestiaire Collective‘s Quality Control team compares the product to the original item description, checks the quality (the seams, zippers, linings, buttons, and soles and heels of shoes), and looks for any signs that the product may not be authentic. The quality team receives trainings from luxury brands to identify counterfeits.
The luxury resale store offers a concierge service that takes care of everything needed to sell an item in case someone has no time. Vestiaire Collective will pick-up the item, chose the right price and make photographies.
POSHMARK
Poshmark, founded in 2011 and headquartered in California, is the largest social commerce marketplace for fashion where anyone can buy, sell and share their personal style. With over two million Seller Stylists and millions of shoppers, Poshmark sells around 25 Million items from 5,000 brands.
One of the services offered are “Posh Parties”, virtual buying and selling events that happen in the app. You can browse, buy, and even list together with your community.
In June 2019, Poshmark announced it expands its product portfolio with the launch of Home Decor. “With the launch of the Home Market, we’re taking our first step into broader lifestyle categories and expanding our social marketplace beyond the closet,” said Manish Chandra, founder & CEO of Poshmark. “This Market launch reiterates the power of Posh Markets to scale social commerce and enables Poshmark to continue transforming the e-commerce experience. “
THE REAL REAL
The RealReal was founded in 2011 in LA by Julie Wainwright, an e-commerce entrepreneur (notice that many FaaS players are founded in California, like other key niche players such as Cuyana, Everlane or Reformation).
The RealReal is the leader in authenticated luxury consignment. With an expert behind every item, it ensures everything it sells is 100% real. The company has 100+ in-house gemologists, horologists and brand authenticators who inspect all items available online each day. As a sustainable company, The RealReal gives new life to pieces by brands from Louis Vuitton to Cartier, and hundreds more, supporting the circular economy.
The company makes consigning effortless with free in-home pickup, drop-off service and direct shipping. At its stores in SoHo NYC and Los Angeles, customers can shop, consign and meet with its experts to learn more about luxury authenticity and sustainability. Across the country at The RealReal‘s nine Luxury Consignment Offices, clients can consign and receive free, expert valuations of their luxury goods (Crunchbase).
Fashion as a Service is offering what new generations demand: experience with an ethical and sustainable touch.
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