When you think about all the times you received a gift that ended up in your storage cupboard for a few years, here’s a statistic that is sure to shock you: Each year, the UK spends approximately £700 million in unwanted gifts and about £42 million of that winds up in landfills. You may have thought about using that gift you received a few Christmases ago, but you can’t quite put your finger on when or how. Or, perhaps you’ve outgrown a beautiful leather bag from a previous season that’s collecting dust. Over the last decade, the resale market for pre-owned clothing and accessories has skyrocketed to levels that rival even the most popular of e-commerce stores. In Europe alone, the revenue for the resale market was €1.4 billion in 2021, with names like Depop, Vinted, Etsy, eBay and Vestiaire Collective becoming household names. In this article, we discuss who are the resale market’s biggest supporters, how the industry is growing globally, and why getting consumers to choose second hand is harder in the face of capitalism.
More millennials are choosing second-hand gifts this season
According to data collected by Trove, an e-commerce operating system for trade-in and resale platforms, 74% of millennials would receive a pre-owned gift and 64% would give one too. Considering that Millennials (ages 26 - 41 in 2022) contribute the most to global spending and economic growth, this shift in thinking and buying behaviour is interesting and optimistic to see. The resale market being powered by mostly Gen Z and Millennial consumers is not surprising since one of their main values when shopping from a particular brand is authenticity and identity. When a brand has a strong identity, it resonates better with younger shoppers, especially when they are open about their practices; who makes up their C-suite; and their efforts for inclusivity and sustainability. This comes from a desire to stand out instead of fit in, unlike older generations.
Most pre-owned gifts are high-end bags that are in excellent condition; vintage watches, blazers or shoes; or retro sunglasses like the original RayBan wayfarers. Leather items, if taken care of, are also often seen as second hand gifts that are desirable. If a younger audience is keen to give or receive second hand gifts, designer labels would be smart to create and market a pre-owned division, which would target sustainability efforts and new markets for revenue.
In the face of capitalism and newness, the resale market has its work cut out for them
Getting the average consumer to choose secondhand over a brand new item is like a salmon trying to swim upstream, which is why it can be difficult for resale platforms to see continuous support, growth and profit. One of Europe’s largest resale e-commerce sites, Vinted, reported €118 million in losses for the year of 2021, which is a number five-fold from the previous year. The losses are mainly due to marketing expenses after acquiring German competitor Rebelle. Vinted spending three times as much on marketing in 2021 compared to 2020.
Although their losses are much higher, it must be noted that their revenue also increased from €148 million to €245 million, which is a testament to the mission of continuing the fashion cycle instead of adding to waste and carbon emissions. The company’s directors are reportedly not concerned about the increase in losses as E-commerce News EU reports that it was always the plan to increase spending on marketing to drive growth.
The feeling of buying something that’s new and shiny is a feeling that can’t be recreated (unless one buys something else, of course), which is the serotonin boost brands and retailers love to see when annual sales reports come in. However, that doesn’t mean the culture of consumption and capitalism should not be met with more sustainable ideas. In 2021, Vinted alone was valued at €3.5 billion and operating in 16 countries. Vestiaire Collective, the French marketplace for secondhand fashion, is valued at €1.7 billion and just acquired Tradesy in 2022. In the Middle East and the UK, there’s The Luxury Closet which sells second hand high-end fashion and accessories, and just secured $14 million in its fourth round of funding. If these numbers are anything to go by, needless to say, the second hand apparel market is not only growing but cultivating new attitudes on fashion and sustainability.
Source: Statista 2022
Vestiaire Collective conducted a survey to learn more about the shopping behaviours of thousands of consumers around Europe, Asia and the US, and found that the main reason, at 50%, for choosing second hand items over new ones was affordability, while sustainability came in second at 40%. Notably, sustainability as a reason for shopping used items increased significantly since the 2020 survey; and 25% of the average consumer’s cupboards are filled with pre-owned items. This is expected to grow to 27% by 2023. Sellers, who use these platforms to sell luxury or vintage bags, coats, watches and more, are seeing both the monetary and the environmental value in selling them, with 40% of sales being attributed to the climate crisis. In addition, 59% of shoppers either discovered a brand or bought it for the first time second-hand.
Attitudes are changing
Traditional retail and consumer buying choices are being challenged more and more as the climate crisis continues to worsen. People who may have been big fans of buying the latest season’s shoes or coats are rethinking their choices, opting for the same luxury items via a different experience that’s more sustainable and affordable. These same brands are even creating their own pre-loved channels, like Marc Jacobs, for shoppers to sell and buy second hand items. This allows the life cycle of a clothing item to continue years longer than the average timeline, which is 2-3 years. This shows that the fashion industry is maturing as consumers’ attitudes are changing towards newness and consumption. However, it isn’t just the fashion industry that’s seeing second hand channels and platforms flourishing; we are also seeing it with smartphones and other tech products, children’s toys, and gym and sporting equipment. If brands and retailers commit to creating pre-loved channels, and if resale platforms continue to grow as they have been, we see this as a successful concept with lifelong potential.