Shoppers are buying from resale retailers more than ever. Here's why

Bloomberg | Bloomberg | Getty Images

Secondhand retail companies are finding success with shoppers focused on sustainability and hard-to-find items, while also avoiding the supply chain pressures being felt by traditional retailers.  

Big box retailers like Walmart and Target have focused on keeping prices down, and have absorbed the increasing costs in shipping, labor, and materials for shoppers. Other retailers, like Macy's and Kohl's, have raised prices to keep up with the uptick in costs.    

But resale companies The RealReal and ThredUp are playing up their secondhand supply chains, inventory levels, and pricing.   

“While many retailers have been forced to raise prices due to inflation or supply chain pressure, we do not have the same level of exposure,” James Reinhart, CEO of ThredUp, said on the company's recent third quarter earnings call.  

ThredUp's business is entirely sourced domestically from its users, according to Reinhart, and has no reliance on direct manufacturing for inventory.  

“We have chosen to strategically lower prices in order to engage as many customers as possible during a time when consumers are feeling price pressure in many other parts of their life,” he added.  

ThredUp's prices averaged 15% lower in the third quarter compared to the same period last year. Reinhart said the company will continue to keep prices down through ThredUp's domestic supply system.  

The company reported record quarterly revenue of $63.3 million in its third quarter, up 35% year-over-year. It also had record numbers of active buyers at 1.4 million and a record number of orders at 1.3 million, growing 14% and 28%, respectively, year-over-year.  

Julie Wainwright, founder and CEO of the RealReal, said after its third quarter earnings that the company's inventory has exceeded pre-Covid levels, adding “we believe we are well-positioned from a supply perspective as we enter the holiday season.”

She also noted that the RealReal is shielded from the inflationary impacts other businesses are seeing.  

The RealReal reported total revenue of $119 million in its third quarter, an increase of 53% compared to last year. There were 757,000 orders in the third quarter, up 38% year-over-year.

“Adjacent to the issue of reselling and all of the empty storefronts, I feel very strongly that retail is just changing,” said Tim Ceci, founder and president of Tim Ceci Retail Consulting.  

Still, investors aren't entirely sold on the outlook for these companies, even amid the supply chain issues around the globe for retailers. ThredUp's stock has been volatile since its initial IPO pop this year, and after its recent earnings resulted in a one-day bounce, shares continued on a declining trajectory. RealReal received a boost from its recent earnings, but remains down near-25% this year.

Loading chart…

But the broader consumer trends supporting the secondhand market do continue to serve as a secular tailwind for the niche.

New habits pushing shoppers towards resellers  

In total, by 2023, the resale market is expected to reach $51 billion, according to a recent report from ThredUp.

The resale industry is growing 11 times faster than traditional retail, according to Carolyn Thomas, president and CEO of Aravenda, a consignment software company. This trend is likely linked to two factors: supply chain logistics and the consumer's shift to a sustainable mindset.  

It's also being aided by younger consumers like Edwin Elliott, a 25-year-old Miami resident, who is scoping out old-school pieces online to complete trendy outfits. They can be difficult to recreate “without real vintage pieces,” Elliott said. “And there are so many resale shops online, so it has made it easier to buy vintage items.”  

“Before you would have to go thrifting,” said Elliott, “you would have to sort through piles of stuff and hope that you find something worth buying.”  

Thrifting, the antiquated term for resale, is all about the shopper having choices. And the web has provided that, says Ceci. “Gen Z is running after secondhand and reselling,” he said.  

Etsy, the online business known for its handmade and vintage item marketplace, acquired the resale app Depop in July for $1.62 billion, showing “significant potential to further scale,” according to Etsy CEO Josh Silverman in a statement announcing the deal. 

Etsy's stock has outperformed the marker this year. 

Loading chart…

Depop, or the “resale home for Gen Z consumers” as Silverman described the marketplace, hosts 30 million users across 150 countries. Through its core messaging around environmental and ethical shopping, the resale brand is a huge attraction to the younger consumer.  

“It's about having choices,” Ceci said. And for the younger shopper who is looking for retro styles and a sustainable way to shop, “it is a viable way to have an exchange with a retailer or a brand,” he added.  

Growing focus on new, unused items  

The sustainability factor is an “added perk” for Elliott, but the main reason he shops resale is for the exclusiveness and online convenience.  

These resale sites are not just providing a platform for sellers to sell off old goods. 'New with tags' or 'new in box' items are increasingly being sold through resale platforms, according to Thomas.

StockX, which launched in 2016 as the “Stock Market of sneakers,” the resale site has evolved to become a hub for users to buy and sell new high-ticket and hard-to-find items from clothing, handbags, and electronics. In April, StockX completed a new round of funding that valued it at $3.8 billion, signaling the “broad recognition and excitement” for the company in the long-term, StockX CEO Scott Cutler said in a statement.  

Through resale sites like Depop, consumers can resell limited items that may have sold out and are no longer available directly from the retailer – a common occurrence, according to Elliott, “so, it's hard not to buy off a resale site.”  

“When you pivot over and look at the RealReal, a lot of that relationship with the customer is on luxury or higher-end goods,” Ceci said.  

Traditional retailers moving into resale  

Several traditional retailers are finding ways to move into the reselling space as that business booms.  

Lululemon announced in April it would be launching its own resale program. The brand partnered with Trove, a business that helps companies build out resale shops, and began piloting its 'Like New' program in California and Texas in May.   

ThredUp has struck several partnerships, including a deal with Macy's in August to offer secondhand apparel at 40 stores. J.C. Penney works with ThredUp to offer secondhand women's clothing and handbags at 30 stores.  

Through its “resale as a service” platform, ThredUp is working with several retailers to help them provide secondhand products to customers, including Walmart, Everlane, Farfetch, Gap, Adidas, and Crocs.  

Even Ikea said it would get into reselling, with the Scandinavian ready-to-assemble furniture store announcing this month it would offer a “buy back & resell” program in 33 of its U.S. stores through December 5, after piloting the service at a Philadelphia store.  

“I am optimistic amid a lot of evolution that is going on,” Ceci said. “And certainly, the resale market is definitely here to stay.”  

News Related

OTHER NEWS

German lawmakers debate possible COVID vaccine mandate

The Associated PressGerman Chancellor Olaf Scholz presents a poster of a new vaccination campaign during a press conference after a meeting at the Chancellery in Berlin, Germany, Monday, Jan. 24, ... Read more »

Russian airlines increase transportation by 60% to over 111 mln people

More than 87.5 mln passengers were transported on domestic routes, which is almost 56% more than in 2020 and surpasses the figure for 2019 by 20%," the statement said Read more »

Russian Investment Forum may be held in late March-April — source

The event was not held in 2020 and 2021 due to the coronavirus pandemic Read more »

SnowWorld clashes with supervisory board appointments due to new women's quota

Ski hall manager SnowWorld wants to appoint two men to the company’s supervisory board next Friday. This means it does not meet the top women’s quota, which has been in ... Read more »

Russia ranked second globally in terms of oil output in November 2021

In November, Russia increased oil production to 10.9 mln bpd, while the world leader, the United States - to 11.5 mln bpd Read more »

Micron to shut DRAM chip design operations in Shanghai: Report

Representative image Memory chip maker Micron Technology will shut its DRAM chip designing operations in Shanghai by the end of this year, the South China Morning Post reported on Wednesday. ... Read more »

Chancellor Rishi Sunak defends handling of COVID support scheme and vows to go after fraudsters

The chancellor has been accused of writing off £4.3 billion of fraud from people who took advantage of furlough and bounce back loans issued during the pandemic but he denied this. Read more »

Global oil benchmark tops $90 for the first time since 2014

An oil pump at sunset in Daqing, Heilongjiang province, China, on July 13, 2006.Lucas Schifres | Getty Images Brent crude futures, the international oil benchmark, topped $90 on Wednesday for ... Read more »

Never travel internationally from Amsterdam again?

58 min ago in FINANCIAL The news that CEO Pieter Elbers is leaving KLM has hit like a bomb. With his departure, the Dutch touch within Air France-KLM seems to ... Read more »

57,000 jobs in business for people with an occupational disability

Photo: ANP Employers in the corporate sector hired more than 57,000 people with a distance to the labor market between 2013 and the third quarter of 2021. According to employers’ ... Read more »

Boeing records $3.5 billion charge as 787 problems mount

Boeing Co said on Wednesday said it incurred a $3.5 billion charge in the fourth quarter due to longer-than-expected delivery delays of its problem-plagued 787 widebody jet. Still, Boeing generated ... Read more »

WTO gives China right to impose tariffs on $645 million of U.S. goods

The World Trade Organization authorised China on Wednesday to impose $645 million of compensatory tariffs against the United States in a decade-long case into U.S. measures to counter Chinese subsidies. ... Read more »

Wind turbine maker warns of volatile business environment as inflation and supply chain issues bite

Vestas wind turbines photographed in North Rhine-Westphalia, Germany, on 19 September, 2021.Horst Galuschka | picture alliance | Getty Images The wind energy sector faces a rocky road ahead due to ... Read more »

Budget 2022 | Must focus on execution of elements of last year's budget: Rahul Singh, CIO-Equities, Tata Mutual Fund

Representative Image With only a few days left for Finance Minister Nirmala Sitharaman to present India’s annual budget for the year 2022-2023, Rahul Singh, CIO-Equities of Tata Mutual Fund expects this ... Read more »

Ministry wants to make agreements with 60 companies about an emergency plan in the event of a gas crisis

The Ministry of Economic Affairs wants to make agreements with sixty companies about how they can be switched off from gas in an extreme emergency. It concerns large consumers, such ... Read more »

Restaurant sites see huge spike in reservations

Photo: ANP The number of Dutch people who have reserved a table in a restaurant on Tuesday is “hugely” large. That’s what restaurant sites The Fork and Eet.nu say. The ... Read more »

IMF urges El Salvador to drop bitcoin as legal tender, cites large risks

The International Monetary Fund wants El Salvador to stop using bitcoin as legal tender. NurPhoto via Getty Images The International Monetary Fund is urging El Salvador to drop its controversial ... Read more »

US new home sales jump in December as prices fall

The Associated PressAn advertising sign for building land stands in front of a new home construction site in Northbrook, Ill., Tuesday, Dec. 28, 2021. U.S. home prices surged again in ... Read more »

UK Advertising Code Commission reprimands oat milk maker Oatly

Popular oat milk maker Oatly has banned some commercials in the UK. The Advertising Standards Authority (ASA), the UK’s Advertising Code Commission, is critical of some of the Swedish company’s ... Read more »

KHN: 5 billion euros invested to keep companies afloat

Photo: ANP Horeca entrepreneurs have invested at least five billion euros in their own money in the past 22 months to keep their companies afloat. Koninklijke Horeca Nederland (KHN) reports ... Read more »

Banks and asset managers vie to carve up £1bn mortgage platform Kensington

M&G, Pimco and Starling Bank are among the bidders participating in the £1bn-plus auction of the specialist mortgage lender, Sky News understands. Read more »

How AMC rode the meme stock rally to revitalize its business

The AMC Burbank 16 and the Batman bronze statue in Downtown Burbank.AaronP/Bauer-Griffin | GC Images | Getty Images After a year of massive stock gains, AMC Entertainment shares are starting ... Read more »

Mattel has rights back to Frozen characters and Disney princesses

Photo: ANP Toymaker Mattel will regain the rights to make toys based on Disney’s Frozen movies from next year. The maker of Barbies can also produce dolls of all kinds ... Read more »

Croatia announces deal to buy US Bradley fighting vehicles

ZAGREB, Croatia — Croatia has reached an agreement with the United States to buy 89 Bradley vehicles as part of cooperation with Washington and plans as a member of NATO ... Read more »

Delight among entrepreneurs about reopening interspersed with major money worries

Premium The best of De Telegraaf Through Gabi Ouwerkerk 4 min ago in TO UNDERTAKE Hans van Heesch is overjoyed that his restaurant can open again, but is awake because ... Read more »

Boeing takes billions due to production problems 787 Dreamliner

Photo: ANP The American aircraft manufacturer Boeing takes an extraordinary charge of 3.5 billion dollars, converted more than 3 billion euros, in connection with the production problems with the 787 ... Read more »

Stalker has been harassing Apple CEO Tim Cook for over a year

Photo: ANP Apple CEO Tim Cook has been harassed by a woman for over a year and Apple has applied for and received a restraining order against her. That can ... Read more »

10 Mins Delivery: Ola rebrands grocery business from Ola Store to Ola Dash

Ola founder Bhavish Aggarwal. With an aim to bring in the element of speed in the name itself, ride hailing firm Ola has renamed its express grocery delivery business as Ola Dash, ... Read more »

Norfolk Southern railroad's Q4 profit up 13% on higher rates

The Associated PressFILE – A Norfolk Southern freight train moves along elevated tracks in Philadelphia, Wednesday, March 31, 2021. Norfolk Southern railroad delivered 13% higher profit in the fourth quarter ... Read more »

China Evergrande aims for restructuring plan within six months as creditor talks begin

China Evergrande began long-awaited talks with creditors on Wednesday as the property developer struggles under debt of more than $300 billion, saying it aimed to have an initial restructuring plan ... Read more »

Succession and Dune bring HBO Max many new subscribers

Photo: ANP Streaming video service HBO Max and pay TV channel HBO attracted 4.4 million new subscribers in the past quarter. The new season of the series Succession and the ... Read more »

State Secretary Heijnen: Tata must keep promises

The cabinet assumes that Tata Steel will keep its promise that the company will reduce its emissions of carcinogenic substances by half this year. But first there must be clarity ... Read more »

Big vote of confidence in the City of London as Citi dismisses Brexit threat

Sky's Ian King says Citi's investment in its Canary Wharf home, believed to be around £100m, is part of a wider judgement that London remains central to the financial services sector. Read more »

McDonald's McPlant burger made with Beyond Meat sold better than expected, analyst says

McDonald's McPlant BurgerCourtesy: McDonald's McDonald's McPlant burger is more popular than initially expected, according to Piper Sandler analyst Michael Lavery. In December, participating locations sold roughly 70 of the plant-based ... Read more »

Insurer Anthem underwhelms Street with 2022 forecast

Anthem is starting 2022 with lower expectations than Wall Street for how the year will play out. The Blue Cross-Blue Shield health insurer laid out on Wednesday earnings, revenue and ... Read more »

So long, Saturdays: More couples embrace weekday weddings

The Associated PressThis photo shows Shelley Kapitulik-Jaye and her husband, Stephen Jaye, on Oct. 20, 2021, in Norwalk, Conn.. The two wed on a Wednesday, tapping into a trend of ... Read more »

Crypto money laundering rises 30% in 2021: Report

(Image Courtesy: Shutterstock) Cybercriminals laundered $8.6 billion in cryptocurrencies last year, up 30 percent from 2020, according to a report from blockchain analysis firm Chainalysis released on Wednesday. Overall, cybercriminals have ... Read more »

Intel wins: billions fine Neelie Kroes off the table

The General Court, part of the European Court of Justice, announced this on Wednesday. The mega fine was imposed in 2019 by the then European Commissioner Neelie Kroes (Competition). At ... Read more »

Supermarkets wary of discussions about quarantine

Photo: ANP Supermarkets doubt whether the relaxed quarantine rules will solve scheduling problems quickly. From now on, employees with essential tasks are no longer obliged to go into quarantine after ... Read more »

Coming era of stagflation and wealth destruction will be boon to working class

The world is entering a period of stagflation, with inflation significantly above the economic growth rate. The world’s major central banks are unlikely to halt the trend by raising interest ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic