Second (hand) comes first

MICHELE CAPRINI
04/10/2020
In brief
For the retail industry, business and sustainability can be associated in many ways. In the fashion & luxury sector, especially after the Covid-19 emergency, the secondhand market is even more rapidly taking different forms, size and meanings of considerable interest both for the online and physical distribution. ‘Pre-owned’ must be defined through three keywords: digital, circular and sustainable.

’Secondhand’, ‘used’ or pre-owned, as you prefer, and sometimes even pre-loved. The issue of recycling, circularity and environmental impact is spreading like wildfire in various market areas, but in the fashion & luxury segment the phenomenon of secondhand shopping is progressing at a breakneck pace.

SECONDHAND, THE NUMBERS

The Covid-19 emergency has boosted the resale market, capitalizing on the shift towards saving and sustainability. The annual report of the U.S. platform threadUp looks at the lockdown numbers, recording a growth of 20% for the secondhand market, with 52% of consumers planning to spend more in this segment in the next 5 years.

By 2024, the volume of sales of secondhand garments is set to hit 36 billion dollars, compared to 7 billion last year. Resale market is expected to grow 2X times over the next 10 years, overtaking fast fashion by 2029: 44 billion dollars compared to 43.

The secondhand clothing market will increasingly also concern luxury fashion. According to Boston Consulting Group, it is already worth 25 billion euros. It was worth 22 billion in 2018 and will be worth 31 billion in 2021. This growth can be associated with two major groups: new buyers, who want to access a brand, and regular customers who resell goods that they own to buy new ones. Overall, the market is growing four times faster than the new products market.

CIRCULARITY, WHICH MEANS

The Ellen MacArthur Foundation is among the ten most important independent charities in the UK and supports various non-profit organizations in around 50 countries throughout the world.

According to the EMF, circular economy “is a generic term to define an economy designed to regenerate itself. In a circular economy, the flows of materials are of two types: biological ones, capable of being reintegrated into the biosphere, and technical ones, destined to be re-valued without entering the biosphere”.

Consistently with this theory, the classical economic model, which requires large quantities of resources and energy, is unsustainable. Consequently, this necessarily calls for a transition to a circular model which limits the input of materials and energy at all stages of the chain – from design, to production, to consumption, up to the end of the product’s life cycle – and minimizes waste and losses. This in order to prevent and contain the environmental impact and create shared social value.

ONLINE, ON THE DOUBLE

Circularity is a primary value, and complementary to sustainability for younger consumers. At the forefront of change there is, of course, Generation Z, sensitive as much and perhaps more than Millennials to the principles of the Global Fashion Agenda. No surprise, therefore, if the preferred field of application of secondhand sales is digital.

The results achieved during the lockdown by Vestiare Collective (the French luxury resale platform which today has more than ten million users worldwide) are there to prove it. In June, according to what communicated to Il Sole 24 Ore newspaper by Fanny Moizant, president and co-founder of the company, the articles deposited increased by 100% and orders by 144%. The number of garments put online each week on Vestiaire Collective exceeds 40,000.

Significant results also for Vinted, a Lithuanian community with eleven million active members, whose site is visited on average by one and a half million people who browse through 23,000 new ads every day, with an average cost of €15. Vinted is currently valued at around one billion euros.

RE-COMMERCE, BECAUSE

The strategic importance of sustainability for the sector has now become relevant to the point of involving even illustrious names in fast fashion, such as H & M. Last February, the Swedish company assigned the role of CEO to Helena Helmersson who previously held the role of CSR manager. After the first investment in 2015 in Sellpy, a seconhand fashion platform also based in Sweden, H & M has recently increased its stake to 70%. In its intentions, this new venture is an expression of the “group’s strategic efforts to create a circular economy”.

Among the established e-commerce players, Zalando has expanded its online offer with pre-owned garments for customers in Germany and Spain. The German company also completely abandoned plastic for all secondhand orders, focusing on recycled paper.

For retailers, the move to a circular business model – whose popularity was already high before the pandemic and then significantly augmented by it – supports competitiveness in a market where sustainable alternatives increase in proportion to the difficulties of fast fashion. 

Turnover, values, customers, experiences and people. Let’s put some order in all this.

Turnover, values, customers, experiences and people. Let’s put some order in all this.

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