- The resale sector is exploding in spite of the coronavirus pandemic.
- Resale marketplace thredUp recently filed for a US initial public offering (IPO), according to a Bloomberg report.
- A June report from thredUp says that the total secondhand market is projected to reach $64B by 2025.
- The report highlighted the impact of Gen Z on millennials on the growing segment, which is expected to overtake fast fashion by 2029.
- Visit Business Insider's homepage for more stories.
As retail takes a hit from the coronavirus pandemic, the resale sector is emerging victorious.
Resale marketplace thredUp is doing particularly well. The company filed for a US initial public offering (IPO) this week, the details of which will be determined after a review by the U.S. Securities and Exchange Commission.
As the resale sector thrives, thredUp is in a favorable position. A recent report from the resale marketplace estimates that the total secondhand market is projected to go from $28 billion to $64 billion by 2025 despite headwinds across the retail industry as a result of the pandemic.
ThredUp partnered with analytics and research firm GlobalData to release its 2020 report on the state of the resale market, which examined how the pandemic impacted resale as whole. In general, the report highlighted the acceleration of the resale sector, which grew 25 times faster than retail in 2019.
In the foreword to the report, thredUp president Anthony S. Marino said that the pandemic seems to have catalyzed changes were that were already taking place in retail.
"When times get uncertain, we all focus on our family balance sheet," he said. "Brands whose core proposition delivers value and convenience have the opportunity to gain share. Amazon, off-price, and resale are emerging as winners."
Quarantine gave a boost to resale
As examined in the report, quarantine-driven shopping habits helped boost the resale sector as more shoppers looked to hunt for bargains at home.
Online secondhand resale is set to grow 27% in 2020 thanks to a bargain-hunting mentality that has become common during the pandemic, according to the report. Meanwhile, the broader retail sector is projected to shrink 23%.
Business Insider recently spoke to 10 CEOs of different resale platforms including Poshmark and Depop, most of whom said that they were experiencing higher levels of usership and engagement amid the pandemic as more people turned to reselling to make some extra money during a time of widespread unemployment and economic uncertainty.
As household budgets shrink and unemployment hits record highs, shoppers' tendency to thrift and start side hustles is also driving growth in resale.
Gen Z is driving growth
Part of the resale sector's dramatic growth has been owed to Gen Z, defined by Pew Research as anyone born after 1997 and the next generation of shoppers that brands are looking to win over.
Data from thredUp's report shows that Gen Z is adopting secondhand fashion faster than any other age group.
Gen Z, which is known to value authentic brands that resonate with them and engage in real-time culture, also tends to be more entrepreneurial and environmentally-conscious than generational predecessors, which makes them more likely to turn to resale.
On the other hand, the fast fashion industry is historically more harmful to the environmental, generating 10% of all humanity's carbon emissions. Thanks, in part, to Gen Z's focus on sustainability and environmental impacts of their purchases, the resale sector is expected to surpass fast fashion by 2029.
As resale becomes a notable winner amid the pandemic, mainstream retailers are looking to jump on the bandwagon as well. Walmart recently announced it would sell used clothing, accessories, and shoes for the first time on its website via a partnership with thredUp.
"It's an incredible online assortment, the resale prices are outstanding, and we are thrilled to offer our Walmart customers the opportunity to reuse garments," Denis Incandela, head of fashion for Walmart ecommerce, wrote in a blog post.
Source: Read Full Article