On this Tuesday, March 12, 2019 photo of Yakaranday Arce was selling clothes for delivery in … [+]
The business model of the fashion industry is based on planned obsolescence. Every season thousands of fashion brands present completely new collections, and major changes in fashion trends arrive predictably every five to seven years, all intended to stimulate a flurry of new fashion purchases.
But people and the planet pay a heavy price for indulging the fashion industry’s obsolescence plan. According to McKinsey, the fashion industry produced enough clothing in 2014 to provide nearly 14 individual items for every person alive in the world, and it’s definitely grown since then.
Constantly pumping out a steady stream of new products, the industry produces about 10% of global greenhouse gas emissions, uses more energy than the aviation and transportation industries combined, and spews out 20% of global wastewater, while the second in terms of the amount of water. intensive industry in the world.
While the industry works overtime to clean up its act, fashion’s basic outdated business model remains unchanged. But it is not sustainable as consumers become more and more aware of its price. They are beginning to break the vicious cycle of consumption that the fashion industry is based on that is expensive for them and destructive for the environment.
Because of the breach, ThredUp offers fashion brands an alternative to get on the right side of the environment and feed consumers’ desire for something new to wear; only ThredUp’s new is something old from another customer’s closet.
Called Resale-as-a-Service (Raas), ThredUp allows fashion brands and retailers to expand their business model to sell new and gently used items to serve the growing legion of conscious consumers who want to save money and play a role in helping the environment. ThredUp calls these customers “savers.”
A frugal lifestyle
Unlike the thieves of old who were forced to live frugally, the modern generation of savers, while still interested in saving money, are increasingly motivated to change their shopping habits to make a real difference to world.
“When we were debating using the term ‘thrifter’ in our communications, we thought about whether it would be equated with things being cheap or low quality,” explained Anthony Marino, president of ThredUp. “But we found it was a term that evoked an aspirational lifestyle, and it became an asset for us to connect with shoppers concerned about lasting value, sustainability and a new way to shop.
Also encouraging a thrifty lifestyle is that thieves get a psychological reward for their new shopping habit. “Saving is like a sport. It takes a bit of work to sift through a lot, but thrifters get an endorphin rush when they discover that the Diane von Furstenberg wrap dress is $39 instead of $139. Today it has become a badge of honor to save, rather than a stigma.”
That’s why 72% of consumers who consider themselves thrifty are proud to share their thrift finds with others, according to a GlobalData survey of 3,500 American adults and published in the tenth edition of ThredUp of the “Resale Report 2022”.
Thredup estimates that more than half of American consumers are or have the potential to become savers. About 57% of consumers resold clothing in 2021, and more than half (53%) reported buying second-hand in the past year, up 22 points from 2020.
Spending has become such that 41% of those who describe themselves as thieves first buy second-hand and are passionate about it. Nearly half of consumers who bought used clothing in 2021 bought ten or more used items.
Profit through resale
With the rise of lifestyles, the livelihood of fashion brands is threatened, especially in the North American market, where the second-hand clothing market is expected to grow 16 times faster than the first-hand fashion market by 2026. That’s where ThredUp and its RaaS service can help brands bridge the gap.
“Brands and retailers are starting to realize that the next wave of growth in fashion is reselling,” said Marino. “Nearly 80% of fashion brand and retail executives surveyed said their customers were already buying second-hand. They are now being forced to ask ‘What is our resale strategy?’
To date, ThredUp estimates that there are currently 85 brands and retailers that have a resold product offering, growing from just 38 in 2021. And these are big brands with a loyal customer base that relies on these brands to be responsible towards them and the environment. including Eileen Fisher, Lululemon, REI, Patagonia, Levi’s and Madewell.
Recognizing that reselling is a growth opportunity for established brands, but one that requires a whole new set of skills that ThredUp has mastered, it’s offering brands two ways to get on the resale bandwagon – a Take Back Program, where brands can offer Clean Closet Distribute Kits for customers to return their used clothing and accessories from any brand to their brand credit and a Brand Online Resale Store to add resale to a brand’s e-commerce site brands.
Currently, Walmart
WMT
TGT
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GPS
Fashion brands that offer resale send a powerful, reinforcing message to customers that the quality of their products is extremely high, which drives brand growth in both the primary and secondary markets.
We’ve long known luxury brands justify their high prices in part because their products hold value over time. For the next generation of Gen Z and Millennial consumers, value retention is becoming a consideration not just for luxury, but for every fashion purchase, with 46% saying resale value has now become part of their buying equation of fashion.
“Consumers are always looking for smarter alternatives,” Marino said. “There is something inherently smart about savings. It is an innocent pleasure, not a destructive form of consumerism, but a conscious way of consuming.”
And he continued, “It’s really smart for fashion brands to get ahead of resale trends. They are at a fork in the road. They can either bury their heads in the sand or start and learn. Retailers entering resale will have a distinct advantage and increased share of wallet by combining new items with used clothing in the same experience.”
And ultimately, fashion brands that incorporate reselling into their existing business model can buy some time to re-engineer their current manufacturing processes, which Kearney reports isn’t going so well.
In Kearney’s latest Circular Fashion Index 2022 report, the industry index average rose from just 1.6 two years ago to 2.97 out of ten on the measure of fashion brands’ efforts to extend the life cycle of their clothing and to reduce their environmental impact.
“I think the best clothing is the one that already exists,” said Theanne Schiros, assistant professor at the Fashion Institute of Technology and principal investigator at Columbia University’s Materials Science and Engineering Center for Materials Research. “The best fabric is the fabric that already exists. Keeping things in the supply chain as many loops and loops as you can is really, really important.”
ThredUp wholeheartedly agrees and gives brands a new loop in the fashion supply chain cycle.
Note: ThredUp provided an update on the number of brands and retailers currently offering resale, updated July 7th @ 11:10am.
