What’s the Advantage of Selling All Apparel Brands at a Resale Clothing Franchise?

The battle lines between private label and national brands have been drawn for some time.

Historically, consumers have sought out the comfort, familiarity and security of a strong national brand from which they may have purchased products since they were children. Think about the branding power of Tide or Heinz. Instead of reaching for the store brand or generic version (private-label) of whatever product they wanted, they’d go with what they know and recognize. At least, consumers had been loyal to specific brands until fairly recently.

Increasingly sophisticated private-label brands have chipped away at market share, accounting for 30 percent of sales in certain retail categories in the U.S. Everything from consumer packaged goods to clothing has caught the eye of today’s shoppers. In fact, roughly one-third of total consumer spending on apparel goes toward private-label brands.

The interior of a Style Encore store.

There are several important factors influencing customer purchasing habits that have loosened the grip national brands have historically had on consumers’ wallets. Some of the biggest factors include the evolution of the modern marketplace and generational buying habits.

What does this mean for resale clothing franchise brands like Plato’s Closet and Style Encore? In large part, the forces driving consumers to invest more of their dollars in private-label goods are favorable to the business model that undergirds these and other Winmark franchise concepts.

Convenience and Value

It no longer makes sense to be loyal to a specific brand, according to a recent Inc. Magazine article. Because of the proliferation of brands and products over the past century, there is a multitude of choices consumers face when making a purchase, with little separating brands in terms of what wants and needs they resolve for consumers.

Today, brands have put an enormous effort into fostering loyalty through apps and rewards programs that keep customers coming back. The average household has nearly 30 loyalty program memberships. Even so, 61 percent of people started buying from a different brand within the last year, according to Inc. Many consumers have simply become burned out on these programs, especially when they don’t live up to their expectations or they have a negative experience.

The interior of a Style Encore store.

When you look at businesses like Plato’s Closet and Style Encore, the model is brand agnostic. As an owner, you’re less concerned with stocking up on a specific brand than you are on making sure you have the most contemporary styles and looks that your customers want.

Shoppers have the option of finding a specific brand they love or fits them particularly well, but they aren’t limited to a single brand, like at most retail brand stores. The value they find is often far greater than traditional big-box retailers. In fact, Plato’s Closet and Style Encore customers can save up to 70-90 percent off of retail prices. These resale concepts are positioned competitively to address the need for both convenience and value, offering customers all of their favorite brands in one place at a significantly reduced cost.

How Can Retailers Adjust to Shifting Loyalties?

The good news for clothing brands is that apparel is in the top three categories for highest loyalty for millennials. However, that love hangs precariously, balanced among a number of factors that can cause them to switch brands, including:

  • Changes to the consumer’s financial situation
  • Increases in pricing
  • Recommendations from family and friends
  • Competitors that are more on trend
  • Poor business practices

Business owners may not have control over all these variables, but they can certainly influence millennial consumers by operating a business that functions in conjunction with these factors.

For instance, both Plato’s Closet and Style Encore have built inventory sourcing processes that enable store owners to have the latest fashion in stores. Franchise owners purchase gently used apparel and accessories from customers to replenish inventory, all of which must be put through a checklist to ensure clothing is on trend, high quality and will likely be purchased by the store’s shoppers.

The interior of a Style Encore store.

As a result, customers selling their apparel earn cash on the spot they can then use to make purchases during the same visit, which alleviates financial strain. And customers can also be assured the cost will be at a substantially reduced price compared to retail cost.

Ultimately, both of these resale clothing franchise concepts operate under an environmentally friendly business concept that millennials and many other shoppers care about. Millions of pounds of clothing and other goods stay out of landfills because of the buy-and-sell process.

Have you thought about bringing Plato’s Closet or Style Encore to your community? Learn more about the franchise opportunities by visiting www.winmarkfranchises.com/platos-closet or www.winmarkfranchises.com/style-encore.

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