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05/25/2022

Resale Report: Factors Driving Market Growth

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Online consignment company ThredUp has released results from its 10th annual 2022 Resale Report. The study revealed that secondhand is becoming a global phenomenon led by North America, with the U.S. market estimated to more than double by 2026, reaching $82 billion.

Conducted by third-party retail analytics firm GlobalData, the study serves as a comprehensive measure of the secondhand market and includes global market sizing for the first time.

This year's study highlighted new insights on the key factors driving market growth, why consumers are embracing secondhand and the rise of branded recommerce among retailers. It also includes a one-time special section exploring inflation's impact on the consumer and a 10-year anniversary lookback on the last decade in resale.

"The last 10 years of resale were dominated by marketplaces, but brands and retailers are driving the next wave of secondhand,” James Reinhart, ThredUp CEO and co-founder, said in a news release. “We're still in the very beginning of this trend, but the acceleration of resale adoption is a positive signal with enormous benefits for the planet. This year's report proves that with the collective power of conscious consumers, resale marketplaces, and forward-thinking brands and retailers, we can pioneer a more sustainable future for the fashion industry."

Some notable findings from ThredUp's 2022 Resale Report include:

  • The global secondhand apparel market will grow 127% by 2026, three times faster than the global apparel market overall.
  • The U.S. secondhand market is expected to more than double by 2026, reaching $82 billion. (Secondhand saw record growth in 2021 at 32%.)
  • Resale is expected to grow 16 times faster than the broader retail clothing sector by 2026.

The report also highlighted technology and online trends are driving the growth of the U.S. secondhand market, including:

  • Online resale is the fastest-growing sector of secondhand and is expected to grow nearly four times by 2026.
  • 50% of total secondhand dollars are expected to come from online resale by 2024.
  • 70% of consumers say it's easier to shop secondhand now than it was five years ago.

Particularly during the rise of inflation, resale is a popular choice for consumers. For example:

  • 58% of consumers responded that secondhand has helped them in some way amid rising inflation.
  • 80% of consumers are buying the same or more secondhand apparel items, compared to 49% of consumers buying the same or more apparel items overall.
  • 25% of consumers say they'll consider buying more secondhand products if prices in apparel, footwear and accessories keep rising.

Brands and retailers are embracing resale to satisfy consumer demand, and resale is becoming an inevitable part of retail.

  • Brands with resale shops increased 275% in 2021 compared to 2020, according to the Recommerce 100.
  • 78% of retail executives said their customers are already participating in resale – slightly up from 2020.
  • 52% of retail executives said offering resale is becoming table stakes for retailers.
  • 88% of retail executives who currently offer resale said it's helping drive revenue.

The report also concludes that resale is a more sustainable alternative to the fashion industry's wastefulness. According to the report, secondhand displaced nearly one billion new clothing purchases in 2021. Plus, nearly 2 in 3 consumers believe their individual consumption habits have a significant impact on the planet.

Consumers are thinking secondhand first:

  • 41% of consumers said when they shop for apparel, secondhand is the first place they look.
  • 62% of Gen Z and Millennial consumers said they look for an item secondhand before purchasing a new item.
  • 46% of Gen Z and Millennial consumers said they consider the resale value of an apparel item before purchasing it.
  • 62% of fast fashion shoppers said fast fashion retailers encourage people to buy things they don't need, while one in five said they feel pressured to have the latest styles due to social media.
  • 65% of those who bought their first thrifted item a year ago responded that they want to quit buying fast fashion. 
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"Resale has emerged from the pandemic in an extremely strong position. More consumers are shopping secondhand, growth has accelerated and the interest from traditional retailers has soared,” Neil Saunders, managing director, GlobalData, said in the release. “The economic outlook remains uncertain, but with inflation driving apparel prices higher and higher, more shoppers appear to be turning to secondhand to make their budgets stretch further. These things will ensure resale remains a disruptive part of the market and a force for good in helping people shop sustainably."

GlobalData's assessment of the secondhand market is determined through consumer surveys, retailer tracking, official public data, data sharing, store observation, and secondary sources. For the purpose of this report, GlobalData conducted a January 2021 survey of 3,500 American adults over 18, asking specific questions about their behaviors and preferences for secondhand. The firm also surveyed the top 50 U.S. fashion retailers and brands in January and February 2022 to gather their opinions on resale.