Reselling – once the playground of the cash-strapped – is trending in popular culture today, no doubt boosted by celebrity endorsements such as the partnership between ITV’s Love Island and eBay. But fashion brands are wary about entering the space, in particular, out of fear of the impact on their bottom line.
Consumers have moved beyond simply dabbling in reselling and are now making the channel a staple in their wardrobe choices. This is according to several reports including one from the Boston Consultancy Group and preowned designer fashion retailer Vestiaire Collective which indicated nearly 60% of surveyed global consumers have either discovered a brand or bought it for the first time secondhand.
But despite the success stories and figures telling us this is the way consumers are headed, fashion brands seem slow to capitalise on this trend.
Earlier this week, Source Fashion in London hosted panellists for the seminar ‘Thrifty business: How reCommerce is breaking the vicious cycle of overconsumption’, in which the fear of fashion brands to move in this direction was put down to concerns around profit erosion, but also the lack of awareness on how or where to start.
Moderator Debbie Luffman, Director at Think Creative agency, was joined by Matt Hanrahan, co-founder of resale brand Reskinned, Tatiana Wolter-Ferguson, co-founder and CEO of luxury reseller Hewi, and Yasmin Topi, co-founder and CEO of Sociate AI, which has created a personal AI stylist.
Reselling as a commercial opportunity
Hanrahan made the case as to why brands should invest in sustainable reselling: “Brands ask us whether reselling will cannibalise new product sales, but this is not the case. Preloved garments have a 40% resale value and brands can engage with customers who can’t afford to buy new full-price items today, but they might tomorrow.”
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In 2022, Reskinned partnered with eBay, as well as fashion brand Joules to launch a resale platform. The resale brand has also introduced a returns credit system for consumers who can then spend the credit on other brands. Hanrahan says that through this “brands can start to take control and participate in recommerce itself.”
The commercialism of reselling also extends to the luxury market, as demonstrated by Wolter-Ferguson’s company Hewi (Hardly Ever Worn It). Working against the “stigma” surrounding the secondary market in the luxury sector, Wolter-Ferguson works to promote the notion of fashion items as “assets rather than burdens” for consumers and retailers alike.
“We’re tackling the frustrating mindset that taking the tags off a garment lowers its value,” she adds. “Retailers need to match the primary experience and ensure that resold products are in the best condition they can be in.”
The financial longevity of reselling
In 2022, the global resale apparel market was US$182.4 billion in 2022 and is expected to grow more than 16% by 2026, according to data and research firm GlobalData. It’s an opportunity ripe for the taking, explains Topia, but brands must be open to investing in new technology and systems that require time to operate smoothly.
Sociate AI has developed an AI programme named ‘Maya’ which allows retailers to track their products through an entire lifecycle. “AI can obtain business intelligence directly from the consumer, and then retailers can see the trends and be informed about what and how much they should be producing, therefore saving on costs,” Topia says, adding: “a system can be created where brands can make money every single time their garments are sold. It can be a brand-new revenue stream which is more sustainable and will alleviate pressures in terms of production and marketing costs.”
How can brands and retailers embrace sustainable reselling?
But while profitability is a natural driver for many, Hanrahan explains brands also have a moral duty to ensure what they are putting out into the world, is not destroying it.
“Fashion brands have traditionally had linear trading models where you design, make, market, sell, and that’s the end of the engagement with the product. But brands need to be part of the longer circular journey and engage with recovery at the end of a garment’s life.”
He acknowledges for many, this is a new and daunting space. But expertise in reselling is growing as demand for it increases.
“Most brands are on a linear model and don’t own their own warehouses. Sourcing external expertise makes sense. You have to have a flexible approach that reflects your customer. For many brands it’s scary, but it doesn’t have to be like flicking a big red switch. You can start small-scale and run pilots.”
Wolter-Ferguson ended the session with the advice: “Reach out, have those conversations and learn. Brands and retailers are so focused on targets, and it can be hard to switch mindsets. But recommerce can make them money.”