Is there a possibility that Fashion Resale will overtake Fashion Retail?￼
With consumers increasingly expecting an emphasis on sustainability from fashion brands, going forwards, circular business models won’t be optional. The additional focus on sustainability is driving fashion resale massively. Brands are trying to reach “Net Zero” and are now integrating repair and reuse policies into their retail strategies. Doing so to compete with resale market contenders like Vinted and TWIG, to name a few. As a result, fashion rental is on the rise, and clothing resale has grown exponentially in the past few years.
Read the below Snapshot to find out if there’s a possibility that Fashion Resale could overtake Fashion Retail.
What do customers want?
A recent study by Forbes highlighted that over 94% of consumers worldwide say that the brands they engage with have a vital purpose. Customers are increasingly aware of retailers’ behaviour. It has been noted that those who show the correct behaviour and ensure their purpose is aligned with the customer stand themselves in good stead for customer loyalty and sales. Sustainability and circularity are at the forefront of their purpose alignment.
Second-hand retail has seen rising significance over recent years. With the rise of concerns about the environmental and ethical costs of the consumer goods industry worldwide. In the United Kingdom, over 3,800 stores specialise in selling second-hand goods. In 2021, sales in these stores saw a tremendous growth of 27.2 per cent in value. This, indicating increased consumer interest in the second-hand market. The UK also plays a crucial role in trading second-hand and used goods worldwide. For example, in 2018, it ranked as the world’s second-biggest exporter of used clothing, with exports valued at approximately 541.41 million U.S. dollars.
With the increase in living costs, customers want value for money. Owning something pre-loved or repaired offers the opportunity to have a usually high-priced item at a significantly reduced rate.
According to Statista ; In 2021, the global market value of secondhand and resale apparel was estimated to be worth 96 billion U.S. dollars. This value is projected to rise rapidly in the coming years, more than doubling in size from 2021 to 2025, before reaching a value of 218 billion dollars in 2026.
What do fashion retailers have to say about changing customer preferences?
McKinsey&Co recently caught up with Vanessa Rothschild, H&M’s head of sustainability, to find out what the retail giant feels the future of retail is. Vanessa stated in an interview, “The H&M Group, the world’s second-largest clothing retailer, thinks that people will choose and buy clothes differently from the way they have in the past. It sees itself as a potential catalyst for that change.” The company, (which operates some 5,000 stores in 70-plus countries), believes it has both the responsibility and a tremendous opportunity to change consumer behaviour.
Vanessa mentioned that her definition of circular fashion is an industry in which resources and products stay in use for as long as possible before being recycled or regenerated into new products, again and again.
Not only are the larger fashion retailers trying to incorporate sustainable practices and supply chain transparency. Many have also integrated repair and re-use models into their offerings. An attempt to stay relevant and do their bit for the planet. A few examples are; Uniqlo, which is now offering a repair service to its London flagship store. Levi’s has several tailor shops world-wide, including in London, Manchester and Glasgow. The tailoring service offers repairs with the main emphasis being on customisations. Well known outdoor brand Finisterre offers a Lived & Loved service coupled with a range of reasonably priced services. The luxury fashion retailer Selfridges has also implemented an in-store repair service. This service allows customers to “make your most loved items as good as new”.
The massive growth in the fashion resale sector can mostly be attributed to younger Gen Z and millennial customers. Buying preloved clothing is seen as a cheaper and more environmentally friendly way to purchase clothes. Both these topics are especially relevant to younger consumers. Moreover, the reduced prices of second-hand apparel also make clothes which would otherwise be too expensive more accessible.
It is evident that there has been a massive market shift whether brands and retailers decide to take part or not. The resale, repair and reuse movement is here to stay! Therefore, it appears that fashion retail needs to reevaluate its strategies to deal with the disruption. One thing is for sure, when a brand deals with a massive change that is essentially a shift in how customers buy and what they buy, they can either acknowledge the change and adapt or ignore it. With such a significant movement, it would be very naive to ignore it. It will be interesting to see how our favourite brands adapt to the change and if there is a possibility that Fashion Resale will over take Fashion Retail.
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