The growth of resale has been a seismic shift within the broader retail segment. Growing at a rate 21 times faster than traditional retail, the resale market continues to gain even more momentum with each passing year. Now a $24 billion market, the sector is projected to more than double in the next five years, reaching $51 billion in revenue by 2024.
From overtaking fast fashion to capturing the wallet share of an increasingly economical and environmentally conscious consumer, the future of the growing resale industry is strong and sustainable in more ways than one.
Here are some key demographic and marketplace trends that will continue to drive the future success of the resale industry:
1. Sustainability Sparks Demand
The impressive growth experienced by the resale industry can be largely attributed to changing consumer demographics. Specifically, millennials and Generation Z comprise the majority of the buyer cohort today, and their purchase decisions and preferences are fairly distinct from their generational predecessors.
These consumers are more environmentally conscious than previous generations, and the vast majority cite sustainability as a top shopping priority. Although they’re also very budget-conscious, three out of four millennials and Gen Z members say they’d be willing to pay extra for sustainable products.
Unlike traditional retailers, key resale industry players appeal to both sides of fiscally constrained, environmentally conscious consumers. Not only do resale stores offer significant cost savings on a variety of brand-name retail products, but they also help consumers take an active role in saving the environment while saving money. Conversely, the traditional fashion industry is one of the largest polluters in the world, second only to crude oil.
As consumers continue to prioritize cost and environmental impact savings, resale stores will continue to pick up where traditional retail has left off.
2. Recession-Resilient Concepts Dominate the Marketplace
Similarly, resale stores’ environmental and affordability appeal also positions the industry to thrive in any economic climate – an increasingly important point moving into the new year, as economists continue to predict a potential recession in 2020.
During the 2008 recession, nearly two-thirds of U.S. resale store respondents reported an increase in sales, by an average 31 percent, according to data from the National Association of Resale & Thrift Shops (NARTS).
When times are tough, consumers increasingly turn toward resale stores, looking for easy ways to spend and earn money more efficiently. The resale segment’s unique business model, value proposition and essential inventory make it the ideal solution for cost-conscious consumers in any economy.
3. Changing Digital Landscape Opens a Window of Opportunity
The rise of ecommerce and the digital marketplace also posed a threat to many traditional retailers, but the resale model is inherently immune to many of these obstacles.
For example, the resale ecommerce (or re-commerce) hybrid answers a strong demand for a bricks-and-clicks business model. Consumers are more inclined toward omnichannel brand experiences, creating a growing need for businesses to carve out a presence and be wherever their customers are.
Younger consumers also expect to have the power and autonomy to choose how they interact with brands, both online and in person. This represents a key opportunity for resale industry growth and innovation, as resale businesses complement existing brick-and-mortar stores with a broader digital reach.
To learn more about the future of the resale industry, download our eBook.
