Resale marketplace sites and consignment apps, which allow consumers to sell and purchase used and vintage goods—often higher-end and/or limited-edition fashion items—have been on the upswing in 2018 and 2019. The resale clothing market overall is expected to reach $51 billion by 2023, according to ThredUp’s 2019 Resale Report, compared to $24 billion in 2018. Millennials and Gen Z consumers are driving growth.
A number of players involved in licensing have latched onto the trend in recent months:
- Retailers. Neiman Marcus purchased the resale website Fashionphile; Bergdorf Goodman collaborated with GOAT, a reseller of sneakers; Macy’s, Stage Stores, and JCPenney all paired with the consignment app ThredUp; H&M partnered with Sellpy for a pilot in Sweden involving the former’s & Other Stories brand; and American Eagle worked with Urban Necessities for a sneaker resale pop-up in one of its New York stores. Urban Outfitters and R.E.I. are among the many other retailers taking steps into the resale space. Most of the ventures involve resale departments in-store, sourced by the consignment partner, but other configurations are possible.
- Fashion labels and designers. Burberry partnered with The RealReal to form a marketplace on the latter where fans of the brand can consign or purchase Burberry items. Stella McCartney, a pioneer in this space, in keeping with her long-time sustainable positioning, paired with The RealReal in 2018 for a pop-up shop inside the site’s bricks-and-mortar concept store as well as an online resale site. Luxury handbag label Mark Cross is authenticating and selling secondhand items within its boutiques. Eileen Fisher and Patagonia have white-label resale platforms with Yerdle.
- Celebrities. The Kardashian-Jenner clan launched the Kardashian Kloset to resell designer clothing from their own wardrobes. Early items included Off-White Boots and a Gucci handbag worn by Kylie Jenner and Kris Jenner, respectively, with new pieces expected to be available weekly. Serena Williams entered resale with Poshmark, selling items from her own and her daughter’s closet, with proceeds going to charity. She also joined the company’s board of directors. Other celebrities that have worked on similar programs with Poshmark (but without becoming a director) range from DJ Khaled to Rachael Ray.
The resale trend is one component of the so-called “circular economy,” where items are recycled or reused (via resale or rental) rather than purchased new, as a means of reducing waste. In some ways, this trend is a threat to traditional licensing models. After all, the more consumers are buying used, the less they will be shopping for new items in traditional retail and ecommerce venues.
On the other hand, there may be some good reasons for licensors and licensees to experiment with this platform. First, resale sites appeal to young adult consumers who would rather purchase a quality item, especially for a discounted price on a resale site, than buy a fast fashion piece, even if they do not intend to wear it forever. Pairing with a resale site also helps position a brand as high-quality enough that its clothing or other products hold up through multiple owners. From an awareness-generating perspective, these sites may represent a customer’s introduction to some brands, especially those priced on the higher end of the spectrum, and a purchase on a resale site could, perhaps, create a customer for new branded merchandise in the future.
Most importantly, pairing with a resale site or launching another form of circular initiative indicates that the property or brand cares about the environment, which is a very attractive characteristic in the eyes of most young consumers.
A heads-up that this month’s edition of the Raugust Communications e-newsletter goes out next Tuesday, October 15, 2019; you can sign up for this free publication here if you haven’t done so already. The Licensing Topic of the Month will be a discussion of the retailers that seem to be on the verge of bankruptcy and what it means for licensing, while the Datapoint research spotlight will take a look at agency commissions.