The Rise of Recommerce

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Recommerce is the new playbook for brands looking to stay relevant. By embracing secondhand markets, companies can tap into a growing customer base and align with evolving consumer values

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More than a trend

One of the latest trends in retail is, quite literally, nothing new. Recommerce — the buying and selling of second-hand goods— has roots in the 19th century. America’s oldest secondhand fashion store has been around since 1895, and the Salvation Army was founded 1897. EBay was founded almost 30 years ago. 

Despite its long history, recommerce has become one of the retail industry’s fastest-growing trends, driven both technology advancements and shifting consumer values.

For many brands, resale is more than a trend. It’s becoming a critical strategic pillar, with implications that impact nearly several aspects of an organization’s operations. This includes supply chain and logistics, marketing, consumer insights, financial performance, and more. As a result, industries from musical instruments to jewelry to consumer electronics are being transformed. 

Nowhere is this disruption more evident than in the secondhand apparel market. 

The Size of the Prize

According to ThredUp, the US secondhand apparel market has been growing at a double-digit rate since 2018.  It is expected to climb from $43 billion in 2023 to $73 billion by 2028.  Although traditional donation & thrifting (primarily brick-and-mortar) currently represents over half of the secondhand market (53%), resale (mainly online) is the segment responsible for the majority of forward-looking growth. By 2028, it is estimated that 60% of secondhand apparel sales will be from resale.

On a global level, apparel thrifting and resale is expected to reach $350 billion by 2028, up from $197 billion in 2023 (12% CAGR).

Although financial figures for individual apparel brands are generally not public, programs such as Patagonia’s Worn Wear, Lululemon’s Like New and Levi’s Secondhand appear to be popular with both consumers as well as the press. According to CBS News, Patagonia’s Worn Wear is profitable on its own. Additionally, offering resale is a way to mitigate cannibalization that would otherwise occur.

“Your main line of business has already been cannibalized by secondhand sites, off your site.”
– Gayle Tait, CEO of Trove

Altruism is only a side-effect

One reason frequently cited for the growth of recommerce is a heightened sense of the environmental impact of the global fashion industry. In theory, participating in the circular economy can be an enticing motivation, especially for younger generations. 

Although sustainability appeals to many consumers, it is not the main driver of the trend. In fact, the growth of recommerce may not be making a significant dent in the environmental issues caused by the global apparel industry. 

More for less

Consumers’ primary reasons for shopping secondhand apparel are centered around getting a great deal. Getting more bang for the buck is the top reason for buying secondhand, mentioned by 60% of shoppers surveyed in the ThredUp study. Finding unique items and being able to afford higher-end brands round out the top 3 reasons.  Sustainability ranks forth. 

Similarly, money is the primary motivator for sellers. While sustainability ranks third for sellers, it falls after simply cleaning out their closet as a top reason for reselling apparel. 

A hustle built for Gen Z

For younger sellers, reselling can be an attractive alternative to entry level jobs. In a challenging economic environment, it’s relatively easy to earn through reselling: no job interviews or specialized training required. Other benefits include:

• Flexible schedule
• Act as your own boss (no “authority figures” telling you what to do)
• Work harder, earn more

“I can work my own hours and don’t need to schedule time off weeks in advance. I would need to work a full day at Dairy Queen to make the same amount in just a few hours. If I hustle, I make more money. But if I bust my ass at DQ, I still get paid the same.”
-Nolan, secondhand reseller

Gen “re”?

It is no surprise that younger generations are flocking to the online resale market. As digital natives, they have grown up in an era where online marketplaces and social media platforms are integral parts of their lives. Platforms such as ThredUp, Poshmark and Depop offer a convenient way to discover, buy and sell secondhand clothing, allowing younger consumers to express their personal style at affordable prices. 

Although these platforms may be considered “social commerce,” for many younger consumers the ability to avoid in-person interaction is often part of the appeal. This comes as no surprise, given that over one-third of Gen Z and nearly 40% of Millennials are comfortable buying a house entirely online.

According to the 2024 ThredUp report, Millennial’s and Gen Z’s favorite way to shop online is livestreaming, a trend we first highlighted in 2020. Older generations, on the other hand, favor traditional brick-and-mortar thrifting over online. Gen X appreciate being able to afford higher-end brands while Boomers enjoy the thrill of finding a great bargain. 

Implications for Brands

There are both new opportunities and challenges for brands looking to tap into the recommerce trend.

1. Shifting Consumer Expectations:

With shifting consumer values around sustainability and ethical consumption, many consumers are placing a greater emphasis on quality and value. In fact, nearly half of all consumers — and 60% of Millennials and Gen Z— consider resale value when purchasing apparel. In an era of almost disposable “fast fashion” brands have an opportunity to differentiate based on durability and quality.

2. New revenue opportunities:

Brands can partner with leading resale platforms and/or merchandise secondhand products alongside new products. Rental programs provide a sustainable alternative to ownership and generate recurring revenue. Buyback programs can encourage customers to return items for credit, which keeps them connected to the brand.

Of the apparel brands currently offering resale, 67% say they have acquired more customers as a result. An equal percentage believes that resale will generate a meaningful revenue stream within 5 years. 

3. Enhanced Brand Image:

Sustainability & social responsibility are among the top consumer values of Gen Z. Additionally, vintage clothing appeals to Gen Z consumers seeking authentic ways to express their unique identity. As such, participation in recommerce improves a brand’s reputation and can also foster a sense of community and loyalty among customers.

4. Increased Competition:

In addition to new market players, increased availability of less expensive secondhand items can put downward pressure on prices. Moreover, brands need to consider how they differentiate new products from their own secondhand items. 

“You can find high-quality pieces for a lot cheaper than brand new…If something’s truly high quality, I think it will last for however long I’m looking to [keep it].”
– Ian, secondhand apparel buyer and reseller

5. Operational Challenges:

Despite the benefits of recommerce, there are several operational challenges posed by the secondhand market. Quality control and authenticating products (especially luxury items) can be difficult. Additionally, logistics surrounding the return and resale of apparel is complex. 

In many cases, it makes sense for brands to partner with third-party recommerce platform such as Thredup or Trove. Participating in this way can reap many of the benefits while mitigating the operational challenges.

It’s time to adapt

Recommerce is a growing trend that brands can no longer ignore. Embracing the secondhand market offers a chance to tap into a growing market, contribute to a more sustainable future, and align with evolving consumer values.