The resale market is currently estimated to be worth $30 billion to $40 billion, with the market predicted to have a CAGR of 15 percent to 20 percent globally over the next five years, and even higher in developed markets, which could see a 100 percent YoY growth.
The expansion is being driven by an increase in the number of customers starting to buy secondhand and by the number of secondhand pieces consumers are purchasing. Combined, these developments are leading to a share of secondhand clothing in people’s closets that is predicted to grow from 21 percent in 2020 to 27 percent in 2023.
Accelerated Consumer Trends
According to a report titled, ‘The Consumers Behind Fashion’s Growing Secondhand Market’ by Vestiaire Collective and Boston Consulting Group (BCG), “Although affordability, selection availability, and item uniqueness have contributed to the growing popularity of the secondhand market.”
The survey reveals that consumers’ mounting environmental concerns are also a factor in the market’s growth. This shift has been accelerated by the pandemic, with 70 percent of respondents in 2020 saying they feel compelled to shop for pre-owned goods in an effort to become more sustainable, compared with 62 percent in 2018.
A Thriving Secondhand Market Drives Sustainable Consumption
The survey also reveals shoppers’ desires to own fewer and better pieces, to reduce overconsumption and to take better care of what’s in their closets. The presence of a thriving pre-owned market encourages all three goals.
The Upscale Effect: 85 percent of pre-owned buyers participate to reduce overconsumption by trading up fast fashion to fewer, higher-quality, longer-lasting items.
The Durability Boost: 70 percent of fashion consumers say that the existence of a secondhand market encourages them to take better care of the items they own.
The Circular Life Cycle: 60 percent of sellers would have not given a second life to their pieces without the secondhand market.
Customer Segmentation Is The Key To Understanding Engagement In The Secondhand Market
Looking beyond general preferences, the report also identifies six consumer segments, each with distinct attitudes and behaviors, representing the various ways in which participants engage with the secondhand market. The analysis offers valuable insights to help brands better understand the shoppers of today and tomorrow, which will also be useful in recognizing how secondhand consumers may evolve from occasional shoppers of luxury items, for example, to full-fledged brand loyalists.
Luxury Brands Benefit From A Healthy Secondhand Market
There are many ways luxury brands can capture value from the pre-owned boom, bearing in mind that more than 62 percent of respondents said they would be more willing to buy from fashion brands that partner with secondhand players. Potential benefits include:
The ability to respond to growing consumer desire for purpose-led organizations, as 60 percent of consumers want to buy from companies of this type.
Customer acquisition, considering that consumers discover brands through secondhand shopping. Among those surveyed, 48 percent purchased a brand that was new to them through secondhand channels in the past year and would consider buying the same brand again.
Customer loyalty, because the secondhand market represents an opportunity to get sellers to buy additional items with the money they earn from their sales; 31 percent of market participants operate this way.
With 69 percent of consumers willing to purchase more secondhand pieces in the future, the pre-owned market looks poised to address consumers' growing desire for wardrobes that are unique, of good value, and sustainable.