ACTIONABLE RESEARCH ON GEN Z AND MILLENNIALS
Young Shoppers Are Choosing Secondhand Clothing—Here’s How Big Brands Are Dealing

Young Shoppers Are Choosing Secondhand Clothing—Here’s How Big Brands Are Dealing

As secondhand marketplaces like ThredUp and Depop win over Gen Z and Millennial shoppers, big brands are finding ways to tap into the trend…

Gen Z and Millennials’ secondhand shopping has become a threat to the retail industry. These generations of young consumers have been primed to have secondhand shopping as a preference. Gen Z was raised in the recession that Millennials graduated into, and as a result both groups have budget constantly on their minds. According to our shopping and fashion survey, 57% of 13-37-year-olds say they “never pay full price for clothing,” and thrifting has been a big part of their shopping behavior for years. We’ve called out the ways that their secondhand shopping was changing luxury retail—but now it’s having a far bigger impact.

When we ask young consumers their favorite place to buy clothing, Goodwill/thrift stores have been making their top ten list for years. Now, that thrifting behavior has been made digital, with the rise of apps and online marketplaces like Depop, Thredup, and Poshmark, which make shopping more affordable secondhand items more accessible than ever. While secondhand shopping apps didn’t make the top ranking (yet), or the top five for any one age group, they were mentioned by several female respondents, who mentioned quality deals, the ability to haggle, and “the thrill of the hunt” as major reasons they love shopping on the platforms. Use of these apps is becoming more mainstream: YPulse’s shopping and fashion survey shows that 25% of 13-37-year-old females, and 29% of 18-24-year-old females, say that they have bought clothing from a resale site/app—far more than those who say they have rented clothing.

And it’s not just about budget. Eco-consciousness is a major draw for young secondhand shoppers, generations increasingly asking brands (and politicians) to take action on issues like climate change. Being the earth-friendly shopping option is a benefit that apps like ThredUp is leaning into. Their site and social media are filled with messages about “circular shopping” helping the planet—and they’re encouraging Gen Z and Millennials to be proud of their secondhand clothing, and that “Wearing secondhand is a vote for the planet.” For Earth Day, the site created special “Used” pins to include with orders, telling shoppers, “There is a textile waste crisis, and the single best thing we can do is consume less and reuse more. Speak up for the planet and proudly tell the world you wear used clothes (or else no one will know!)” This year, the brand also partnered with Olivia Wilde for a sustainable fashion collab that screen printed phrases like “I Wear Used Clothes,” “Thank You For Choosing Used,” and “Used Goods” onto used items. The brand is hoping that bragging about buying and wearing secondhand items will be the future, and they’re working to spread the message.

They’re certainly already made an impact on the industry. Insider reports that the popularity of resale apps among young consumers is now potentially hurting major retailers. The $20 billion resale market has outperformed the overall retail market in the past five years according to IBISWorld. ThredUp’s own recent report projects that the resale market will more than double from $20 billion to $41 billion by 2022, accounting for more of the market than fast fashion by 2027. H&M and Forever 21 are feeling the loss of that market share, with the former reporting slowing sales and the latter now filing for bankruptcy. According to Forbes, department store sales dropped 4.8% during the first half of the year—giving big high-end brands major anxiety about young consumers.

The fashion and retail industry has no choice but to make changes in the face of secondhand shopping’s big boom. In 2014, we reported that smart brands were experimenting with incorporating resale into their sites, to make a profit from these generations’ hunger for thrift items. At the time, online retailers like Modcloth and ASOS were making vintage collections a part of their retail model, offering curated selections of used clothing and décor. Brands like Ikea, Patagonia, and H&M, have long been tapping into the environmental appeal of reusing and reselling, creating programs and promotions aimed at young consumers that let them return old products for a reward, or find creative ways to give them new life.

But as the resale economy heats up, even more retail brands are finding ways to tap into the trend—in the hopes of attracting back the Gen Z and Millennial shoppers they’re losing. The biggest tactic big brands are employing so far is partnerships with secondhand shopping startups. Last month, Ralph Lauren partnered with Depop to introduce Re/Sourced, a curated collection of vintage items available in a New York pop-up and on Depop’s app. According to Fashionista, more major retail brands are tapping Thredup for collaborations and joint campaigns and activations as the popularity of secondhand shopping apps grows. Madewell has partnered with the fashion resale app for “The Madewell Archive,” with “pre-owned” jeans that are refurbished and sold in stores for a steep discount. Both brands say they’re committed to extending the life of clothes, and circular fashion, but Madewell isn’t alone in tapping the app for a collaboration. JC Penney, Reformation, and Cuyana are also working with ThredUp on recycling programs and pop-ups. According to Retail Dive, Macy’s has actually partnered with ThredUp, giving the digital consignment market physical space in their stores. One Investment Research firm CEO explains, “All retailers have to think out of the box about their square footage and assortment…Offering secondhand brands the store might not carry could add value.”

Some are making a more long-term investment in secondhand retail—literally. H&M recently became the majority stakeholder in Swedish resell app Sellpy. Sellpy is planning a global expansion, and H&M’s continued support of the app could position them to integrate the eco-friendly shopping format into their “vision to become fully circular.” The brand is also experimenting with clothing rental, with plans to rent out clothes from its 2012-2019 Conscious Exclusive collection in a trial program for members of the brand’s loyalty program at the soon-to-launch flagship store in Stockholm.

ThredUp reports that Gen Z and Millennials have adopted secondhand shopping “2.5 times faster than other generations,” and expect the trend will continue as they start buying clothing for their own children. All evidence indicates that secondhand shopping is more than a passing fad, but a major shift in retail that young consumers are driving—and it’s likely we’ll continue to see major players in the industry make their own changes to keep up.