Why everyone got sold on resale in 2022

If someone predicted a decade ago that brands like Tommy Hilfiger, Rolex, and Pacsun would launch resale programs in 2022, you’d have told them to hold on while you drew up a purchase-and-sale agreement for the nearest bridge. But somehow clothing resale went mainstream.

In April, we asked James Reinhart, co-founder and CEO of ThredUp, how he viewed the industry’s evolution.

“We’re at the Honda Insight and Prius stage of resale,” Reinhart said. “When those [hybrid] cars originally came out…the Prius was an ugly car. And the Honda Insight was an ugly car.”

But resale is moving out of that “early adopter” phase, and toward what he called a “Tesla” phase. In other words, Reinhart acknowledged that resale-clothing retail isn’t as evolved as new-clothing retail yet…but it’s getting there.

In the meantime, when it comes to resale clothing, 2022 offered a walk-in closet’s worth of milestones, surprises, and insights.

Everybody in the pool!

Brands from A (Allbirds) to Z (Ziabird) opened online resale shops in 2022. Plenty of non-avian brands got on board, too, including Athleta, Steve Madden, and Eddie Bauer.

According to ThredUp, there are now 121 brands with resale programs, and it tracks and rates the activity of most of them in a list it updates monthly, The Recommerce 100:

• Among the 100 brands on the list, 72 launched in 2022. That fulfills what Reinhart prophesied in an April press release, that “the number of new resale shops launched in 2022 is expected to exceed the number of all other resale shops launched to date.”
• In November, the brand with the most resale items listed was Athleta, with 34,525 items, followed by Tea Collection (22,591), Lululemon Athletica (13,290), and Tommy Hilfiger (9,925).

It’s not mainly being green

The environmental benefits are often cited as a big motivator for resale shoppers, but as it turns out, there are other factors they care about more:

• The environment ranked third, with 12% of shoppers citing it, behind being motivated by the prospect of saving money (22%) and finding “fun” and “unique” items (15%), according to an August report from Recurate, a startup that helps brands launch resale programs.
• Among resale shoppers, only 26% say sustainability is a major reason behind their shopping choices, compared to 68% who say saving money is, according to a Morning Consult study.

Resale isn’t a PR panacea

In October, Shein launched its resale platform, Shein Exchange, and it may have been expecting some love for helping to mitigate the environmental impact of fast fashion.

Instead, it drew accusations of greenwashing.

Buyer + seller = Circular

Toss out the buyer-sellar binary, because in resale, it’s much more fluid. Recurate’s August report also found:

• Nearly three out of four (73%) sellers of secondhand items also purchase them.
• Recurate calls these buyer-seller hybrids circulars.

Resale value top of mind

Many consumers regularly research resale value before purchasing a new car, but usually not a romper. However, consumers are increasingly considering the resale value of the clothes and accessories, especially among those circulars, with 48% saying that they purchase clothing and accessories with the intention of reselling them down the line, according to the Recurate report.

Karin Dillie, VP of partnerships at Recurate and who previously worked  at TheRealReal, told us that on the listings for new products, some brands even highlight used listings of the same products to reinforce resale value.

At Peak Design (a Recurate client), for example, on the product page for its Everyday Backpack, with a list price of $219.95, there’s a link promoting that there are “nine pre-owned items from $86,” as of this publication. Clicking that reveals that one seller (this is primarily a peer-to-peer selling platform, like eBay), who claims to have used it only once before sizing up, is asking for slightly more than the new price: $225.

It seems to encourage exactly why some brands resist resale: the fear of cannibalization, meaning undermining a higher margin of selling a new product by offering a used one cheaper.

“In years previous, some people would say, ‘Oh, that’s cannibalization, that’s going to take away from our full-price product,’” Dillie told us in an interview for this story. “But it also gives those customers a very clear understanding of, when they buy new, what the resale value will be when they want to sell it.”

Fancy that: luxury brands join the party

Cannibalization anxiety had kept many luxury brands on the resale sidelines, but several prestige brands, including Rolex and Oscar De La Renta, launched resale programs this year.

Wilson Griffin, COO and co-founder of Recurate, told us that luxury brand executives recognized that their products were doing brisk business on resale marketplaces.

“The cannibalization is happening on eBay and the other resale marketplaces,” Griffin said. “And they want a piece of that.”