Tariff turbulence is catalyzing demand for secondhand goods. As import duties drive up the cost of everything from sneakers to sundresses, savvy consumers —especially Gen Z and Millennials— are making resale fashionable.
When we first highlighted how the trend of recommerce is disrupting retail, we discussed how brands need to adapt to stay relevant. Secondhand apparel is increasingly embraced by consumers for a variety of reasons, including finding great deals, the thrill of the hunt, exploring unique styles, or participating in the circular economy. According to the latest market report from ThredUp, the US secondhand apparel market reached nearly $50B in 2024 and is expected to grow and a 9% compound annual growth rate.
Now, with US trade and tariff policy serving as a catalyst, the trend is poised to accelerate. Apparel brands —especially those that cater to Gen Z— will face mounting pressure to embrace resale as a critical strategic pillar.
The Tariff Tipping Point
The US tariffs announced on April 2 represent one of the most significant changes to global trade since the 1947 General Agreement on Trade and Tariffs (GATT). The US imports roughly $73B in apparel, with China —currently with 125% tariffs— representing 22% of apparel imports.
According to the non-partisan Budget Lab at Yale, the tariffs are estimated to result in a loss of $4,900 in consumer spending power, with apparel among the hardest hit categories. The Budget Lab estimates that apparel will face a short-term price increases of 65% for apparel and long-term increases of 25%, after accounting for substitution effects. The impact on leather goods is even higher, which is expected to see prices for items such as shoes and handbags increase 87% in the short term and 29% over the long term.
In terms of final consumer prices, this could cause a $50 t-shirt to retail for $60.
Perception Drives Reality
While economists and politicians can debate the efficacy of the current trade policy, one thing is clear: consumer confidence has plummeted. The University of Michigan’s April 2025 survey found sentiment at its lowest point in over a decade. Future expectations of are similarly bleak, dropping to the lowest level in 12 years. With disposable income under pressure, shoppers are rethinking what—and how—they buy.
“This decline [in consumer confidence] was pervasive and unanimous across age, income, education, geographic region and political affiliation,”
– Joanne Hsu, University of Michigan Surveys of Consumers Director
Gen Z Driving Change
Against this backdrop of economic headwinds, value becomes paramount. This is especially evident among younger generations (Gen Z and Millennials). These younger generations —already known for core values around thriftiness and sustainability— are propelling the resale market to new heights.
Are we previously noted, younger consumers are actively engaged in the recommerce ecosystem, as both buyers and sellers. They prefer online shopping and social commerce (especially livestream commerce). In fact, 68% of Gen Z and Millennials shopped secondhand apparel in 2024, and almost half say secondhand is the first place they look, according to the latest ThredUp report.
“It’s kind of wild to think that in the younger generations, it’s not just that they’re shopping secondhand, but that it’s the first place they’re going,”
–Alon Rotem, Chief Strategy Officer at ThredUp
Predictably, two-thirds of younger generations are more likely to buy secondhand apparel if government policies result in higher prices.
Resale is also impacting how younger consumers purchase new apparel: they consider resale value when making new purchases and are cutting back on lower-quality products as a result.
On the Other (Second) Hand
It’s not just resale. A related trend can be seen in the apparel rental market. Services such as Nuuly, Rent the Runway, Armoire, and Taelor offer curated apparel subscription services. Similar to resale, these services allow consumers to get more bang for their buck and afford higher-end brands. They are also an attractive alternative to new purchases for those seeking sustainable options.
The economic and cultural factors driving resale appear to be a tailwind for rental companies as well. Nuuly’s subscriber base has increased over 50% year-over-year and boasts over 300,000 subscribers and Rent the Runway and claims over 130,000 active subscribers in fiscal 2024.
Ironically, the strong growth in rental subscriptions may actually be hampering subscribers’ ability to find unique items.
Implications for brands
Resale has been growing steadily for over a decade and is expected to continue outpacing new apparel for the foreseeable future. Although there are operational challenges associated with resale, participation in the resale economy can take many forms and should be an integral part of your brand strategy.
- Evaluate different resale models. This can include peer-to-peer marketplaces (e.g., Hanna Andersson Preloved), trade-in programs (e.g., Patagonia’s Worn Wear, REI Re/Supply) and consignment partnerships.
- Pilot new programs. Third-party partnerships (e.g., J.Crew Always partnership with ThredUp) can help mitigate operational challenges and white-label solutions can integrate resale into a brand’s ecosystem.
- Resist the urge to sacrifice quality in favor of cheaper prices. Value is about more than cost, and savvy consumers consider the quality of an item, and its potential for resale when making new purchases.
- Communicate your progress. In addition to potential new revenue streams and mitigating the impact of supply-chain shocks, resale can showcase a brand’s commitment to quality and sustainability. Messaging around environmental impact, product longevity, and waste reduction can strengthen your brand narrative and appeal to eco-conscious consumers.
The current trade wars have set the stage for a volatile future in apparel and footwear. With each new policy shift and price hike, resale’s appeal only grows stronger. The rise of recommerce signals a lasting transformation in how we buy, sell, and value clothing. Those who adapt and innovate now—by investing in quality, transparency, and circularity—will set the pace for the next era of retail.