WHAT DOES THE $17 BILLION RESALE INDUSTRY LOOK LIKE?
The resale industry has consistently demonstrated strong growth. According to recent research from Dun & Bradstreet, resale generates revenues of roughly $17 billion as an industry as of 2016. The industry includes a number of commodities, such as clothing, sporting goods, furniture and musical equipment, which are sold through resale and consignment shops, thrift stores and franchised retailers.
Currently, an average of 15 percent of Americans shop at resale stores in a given year, compared with 11 percent of shoppers at outlet malls, less than 20 percent in apparel stores and just over 21 percent at major department stores. The industry has experienced an average growth of seven percent a year for the past two years, and, according to IBISWorld, is expected to increase at an annualized rate of nearly three percent until the year 2021.
Fifty of the largest U.S. companies account for about 30 percent of sales. Despite market competition, the resale industry remains lucrative for its ability to offer both consumers and storeowners a variety of benefits over traditional retailers. These include:
- Being Eco-Friendly
Studies show that consumers age 35 and under purposefully seek out businesses that are socially and environmentally conscious. With a growing concern for reducing waste and carbon footprints, today’s generation appreciates the opportunity to opt for gently used items, eliminating what would otherwise end up in a landfill.
- Customizing Their Look
When it comes to clothing in particular, not only does second-hand shopping help reduce waste, it also allows for greater style individuality. Rather than purchase what is mass-produced in today’s department stores, consumers can find truly unique items to better express themselves. At the same time, resale shops like Plato’s Closet and Style Encore maintain inventory of apparel that is on trend, giving consumers the opportunity to keep up with the latest fashions at a significantly lower cost.
- Saving Consumers and Owners Money
Kids are constantly growing and evolving, making it challenging for families to keep up. Beyond clothing, sports equipment and musical instruments constantly need to be replaced as a child grows. Buying new equipment can quickly add up, but resale stores offer consumers these items in great condition at a fraction of the cost, allowing them to redirect that saved money back into the family.
Savings are also a perk for the storeowners, with minimal inventory costs compared to traditional retailers thanks to reliance on donated items or purchasing inventory directly from their local communities.
- Letting Consumers Earn Money
Not only does the resale industry offer consumers considerable savings on a variety of items, it also provides them an opportunity to earn money for their gently used apparel, equipment and other products. As mentioned, children can quickly outgrow their clothing and other items, requiring upgrades while their original items are still in great shape. From clothing to sporting equipment, musical instruments and more, franchises such as Plato’s Closet, Once Upon A Child, Play It Again Sports, Style Encore and Music Go Round encourage consumers to bring in their clothing and items for resale. This makes it even more efficient for the shopper, who can then replace one item with another while saving both money and space at home.
Because the resale industry meets a variety of consumer needs, it attracts customers from all economic levels rather than having any one “target” audience. Demand for these gently used goods is driven by factors such as consumer income and demographics.
For more information about investment opportunities with Winmark Corporation’s resale franchises, click here.