Resale is the most important growing sector in fashion

Online resale is also experiencing a concrete presence. Neiman Marcus Group acquired a minority stake in Fashionphile three years ago. Fashionphile now has 10 locations in Neiman Marcus stores where vendors can sell their luxury items directly to customers. “This [is] the first large luxury retail environment where customers can enter with last season’s bags and receive a credit to go out with this season’s bag or a Neiman Marcus gift card that includes an additional 10% bonus on value of purchase, “says Davis.

ThredUp, meanwhile, is expanding its partnerships with major retailers. Using its “Retail As a Service” (RAAS) platform, Walmart, Adidas, Target and others are using ThredUp technology to offer resale on their sites. Wells Fargo analysts said this could potentially be more profitable for the company than its own reselling platform.

Traditional retail is not set up for hiring, processing, pricing, and selling millions of unique items. ThredUp, on the other hand, has spent the past 12 years building the infrastructure to power large-scale resale, ”says Wallace.

Other retailers are expanding into the space. Nuuly – owned by URBN (the parent company of Urban Outfitters) – was initially launched as a fashion rental platform in 2019 and decided to expand into resale in 2021. “Rental and resale are natural partners who can benefit from each other in the same ecosystem,” says Kim Gallagher, Nuuly’s director of marketing and customer success. Charm. “Self [customers are] looking to extend the life cycle of their garments by selling them on Nuuly Thrift or by joining the “don’t buy new” movement and renting their wardrobes, we are here to help. “

Meanwhile, fashion brands, many of which have ignored resale or actively sought to thwart its growth, are increasingly putting their hands in the pool.

Accessories brand Dagne Dover launched resale, which they call “Almost Vintage” on their site in mid-2021. “There were already Facebook groups where we were seeing the resale business,” says the co-founder and COO of Dagne Dover Deepa Gandhi Charm. “There were already people selling Dagne on Poshmark. We just wanted to bring that experience to our channel so we can check it out. “

Gandhi says it’s still a small part of the overall business, but he thinks it won’t be long before the offering is quite ubiquitous among brands. “This is just another way for brands to get proprietary data and I wouldn’t be surprised if it becomes an unofficial requirement for ESG. [Environmental, Social, And Corporate Governance]. “

Direct-to-consumer workwear brand MMLaFleur also recently delved into resale. “We had wanted to launch resale as part of our sustainability roadmap for a long time … but we didn’t have the internal resources to scale it,” says Sarah LaFleur, founder and CEO, MMLaFleur. Initially, MMLaFleur partnered with ThredUp before using the company Archive, which provides it and other brands with operating systems to launch platforms to resell their used designs on their sites.

Coach took a different route with its (Re) Loved offering, selling vintage pieces, deconstructed and reused used pieces, and custom one-offs made from second-hand items. The limited edition drops sell out regularly every month.

“[We are] offering new circular paths to give these products a second or third life and thus keep them out of landfills, ”said Joon Silverstein, Coach’s Global Head of Digital and Sustainability.

Despite the growing number of companies watching and entering the resale market, however, making resale profitable and scaling these businesses has been difficult. And with more and more competition in space, it will get more and more difficult.

RealReal showed a net loss of $ 236 million in 2021. The company doesn’t believe it will be profitable until 2024. ThredUp posted a net loss of $ 63.2 million in 2021. And while Poshmark has been profitable in some quarters, showed a loss in the last quarter.

“There’s a lot of manpower involved in reselling – some of these companies handle the hiring and inventory for many unique products, they’re making sure the items are authentic – there’s a meaningful checklist,” Ceci said. To be successful in the long term, resale companies need to have a strong strategy that differentiates the branding, operational and logistical capacity and marketing in place, says Ceci. Charm.

“Everyone is trying to figure it out, including Amazon,” Ceci said. “It will take time to train”.

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