According to a report by ThredUp, the global second-hand market is projected to reach an astonishing $350 billion by 2027, with the United States capturing $70 billion of that figure. One particular area that is expected to experience significant growth is online resale, with an anticipated annual increase of 21%, reaching $38 billion by 2027. This makes online resale the fastest-growing segment within the resale market.
Circularity has emerged as a prominent topic within the designer and luxury resale market. The RealReal, which was established in 2011, set the benchmark for online resale platforms in the United States. However, the landscape has transformed significantly since then, with the emergence of native app-selling platforms, similar websites, and online and offline private and public selling options. Given the abundance of options available, FashionNetwork.com has delved into the competition within the resale fashion market.
One notable shift in the market is the transition from individual sellers to brands reclaiming control over their merchandise in its secondary life cycle. Reflaunt, a B2B site introduced in 2019, intends to address this by providing tools, infrastructure, and operational support to embrace circular economy practices. By integrating the platform into brands and retailers’ websites, Reflaunt offers a seamless experience for customers, encouraging them to remain on the brand’s website for longer periods. Currently, Reflaunt represents over 20 prominent brands and retailers, serving as a powerful tool for enhancing customer loyalty and retention. The platform has demonstrated a 3.5% annual increase in consumer spending for its partners.
Reflaunt offers a range of resell models tailored to each brand’s requirements, including buyback, consignment, and take-back options. The platform manages all operations, including collections, sorting, digitalization, pricing, curation, and shipping. This enables brands to concentrate on their core business. For clients who prefer not to sell their second-hand goods on their own site, Reflaunt leverages its integration with a network of over 30 marketplaces, maximizing their sell-through. The platform earns its revenue through a commission on sales and a license fee charged to the retailer.
Fashionphile, a luxury resale platform, focuses exclusively on bags, shoes, jewelry, and accessories. The platform pays sellers upfront for their merchandise, with prices being determined by market demand rather than the original retail price. Fashionphile employs various tools, such as microscopes, ultraviolet lights, x-ray machines, RFID scanners, and proprietary software, to authenticate goods. To maintain their expertise, authenticators undergo extensive training and continuous education. The platform heavily invests in training its experts to spot counterfeit items and identify poor construction.
Vestiaire Collective, founded in 2009, rivals The RealReal in terms of its offerings but differentiates itself by allowing sellers to set their own prices and ship directly to buyers. The platform places considerable emphasis on community trust and sustainability, with 92% of its users viewing it as trustworthy. In 2021, Vestiaire Collective achieved B Corp status and partnered with Chloé and digital ID company EON to utilize blockchain technology for an instant resale feature. The platform also provides a range of personalization features on its app, including gamification and a sustainability leaf filter.
The RealReal provides an in-home concierge service to facilitate the selling process for users. Nonetheless, some long-term sellers have expressed discontent with decreased earnings. Prices on the platform are determined using advanced algorithms based on internal data and external trends. The RealReal also employs expert authenticators who undergo extensive training to detect counterfeit items. Additionally, the platform collaborates with designers to create new upcycled goods from damaged jewelry and other items.
Resale apps like Depop, Poshmark, and Grailed have gained popularity among younger sellers and buyers. Each platform offers unique features and attracts different types of merchandise. Social apps like Instagram have also influenced the luxury resale market, with fashion influencers and industry icons selling their own items through live streams and other platforms.
Overall, the resale market is experiencing rapid expansion driven by the increasing demand for sustainable fashion and the growing popularity of online selling platforms. As the market continues to evolve, brands and retailers must find innovative ways to participate and adapt to meet changing consumer preferences.
Useful links:
1. [ThredUp report](https://www.thredup.com/resale)
2. [Reflaunt website](https://www.reflaunt.com/)
