This week, we’re visiting topics for which we typically write end-of-year wrap-ups or beginning-of-the-year predictions. Since it’s mid-year, we’re looking back and looking forward.
The growth of resale has been so dramatic in the last few years that it may seem impossible to overstate. Exhibit 1: ThredUp’s The Recommerce 100 list of the brands whose resale shops have the most listings:
- Among the top 100 resale programs, 52 launched in 2022, according to a list updated in May.
- Another 21 of the top 100 resale programs launched so far in 2023 (as of May).
But a recent article in Bloomberg suggests that overstating the impact of resale may be exactly what industry and media observers have been doing. “But here’s the rub,” declared the article’s lede. “So far, even savvy brands such as Patagonia or Shein haven’t figured out how to make secondhand selling account for more than a tiny fraction of their profits.”
Andy Ruben, founder and executive chairman of Trove—which developed resale programs for brands including Levi’s, Patagonia, and Allbirds—told Bloomberg that among Trove’s clients, resale only accounts for between 1% and 5% of their revenue.
Early innings: Karin Dillie, VP of partnerships, sales, and success at Recurate, a tech startup that helps brands launch resale programs, thinks it’s premature to expect resale programs to have high volumes and profits.
“It feels like...jumping to conclusions when you’re in the first inning,” Dillie told Retail Brew. “We haven’t even actually had the time or ability to scale out and see what the longer-term implications are.”
Dillie added that the selling price is considerably lower for secondhand items; for example, if resale accounts for 5% of a brand’s revenue, “that means 10% of their units,” so she cautioned against taking a “myopic view” of measuring revenue rather than volume.
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Ruben made a similar point, telling Bloomberg, “Right now, we’re still building for a future that’s not here yet.”
Looking forward: ThredUp, while still bullish on resale, projected slower growth in its annual resale report it released in partnership with GlobalData in April.
- Last year’s report predicted the US secondhand market would reach $82 billion by 2026, as opposed to this year’s report, which estimates the market will total $66 billion by that time.
We recently covered how eBay built an authenticity program for sneakers, and Dillie said brands that Recurate partners with, including Another Tomorrow, are increasingly tagging their products with a digital ID. That means items have a QR Code that both authenticates a product and streamlines reselling it by embedding all the information about its provenance and original selling price.
“What we’ve been working on is really getting digital ID into an easy place where a customer could scan a QR code and be able to resell directly from there,” Dillie said.
What’s up, frock? Dillie also had a prediction about upcycling, whereby a product is altered creatively, citing as an example she’d seen of someone who’d taken “three different Carhartt jackets and made them into a patchwork Carhartt jacket.”
While resale marketplaces like Etsy and eBay have an abundance of upcycled items because of the crafty independent sellers on the sites, brands themselves haven’t pursued upcycled items. But Dillie said that a couple of brands Recurate is working with are developing an upcycle strategy (although she said she could not yet name the brands).
Brands are looking to partner with those creative people making upcycled products to introduce their work as “capsule collections to engage a customer because they are essentially an elevation of resale because there’s an added aspect of artistry,” Dillie said.