The wave of the second-hand market grows (and Zara joins the bandwagon)

A few weeks ago, Zara, the Spanish fashion chain with stores all over the world, announced its entry into the second-hand market. With a pilot test in the United Kingdom, through the platform Zara Pre Ownedwill offer the possibility of reselling to another individual, repairing, or donating used garments from any season to the Red Cross.

This initiative is part of the steps that Inditex, its parent company, is taking in the area of ​​sustainability. In this way, the fast fashion it enters a market, the second-hand market, which in many countries is experiencing a golden age.

A rising market

The buying and selling of second-hand products appeared and expanded in the 18th and 19th centuries, but in the 20th century it suffered a decline and stigmatization. Now, in the XXI century, it emerges with a renewed popularity.

In the United States, estimates by ThredUp, one of the industry giants, suggest that the global second-hand market will grow by 24% in 2022, and that in 2026 it will double its volume and reach 82 billion dollars.

In the case of luxury products, the growth of the second-hand market – which has a volume of 24,000 million dollars – is being four times faster than that of the primary market (12% against 3%).

Many analysts place the origin of this enormous growth in the economic crisis and the inflation data and, therefore, in the need to save and buy price-oriented. However, academic studies point to a more complex scenario, in which purchase motivations present an interesting mix that allows us to observe new consumer trends.

frugalism

In the United States, frugality in consumption has appeared as a new lifestyle, which has been accentuated after the pandemic and confinement. People want to buy less and be more creative with what they choose, so price (what a good costs, an objective matter) and value (attributed by the buyer, a subjective matter) are now particularly relevant to consumers. buyers.

The possibility of recycling garments or repairing them to give them new life implies a change of mentality and attitude, especially in a hyper-consumption market like the North American one.

Some brands have known how to channel this revolution into consumer values ​​to become benchmarks for sustainability, such as Patagonia, which donated 1% of its profits annually and has just announced the brand’s donation to fight against climate change. Because for frugal consumers, social and environmental impact is an important purchasing variable.

A game for centennials

The motivations of second-hand consumers are not only economic or sustainability. Factors such as leisure or entertainment also seem to play an important role in this new pattern of consumption.

Browsing through clothes and looking for bargains or treasures are also important stimuli. Especially for the youngest, who seem to find in the fact of going shopping a diversion that brings shopping closer to playing.

In fact, the same ThredUp report indicates that 62% of millennials and generation Z look for second-hand products before new ones.

The playful component in this case is accompanied by other rising values ​​for adolescents: authenticity or the search for their own style. And, also in this context, for some authors nostalgia appears as a factor linked to second hand.

Inspired by an aesthetic revived by series like Stranger Thingsyoung people feel nostalgic for times that they have not even lived through.

second-hand business models

The digital world has led to the emergence of a wide variety of models of interaction and exchange between people with resale platforms such as Wallapop, Etsy, Vinted or Mercari. Even Facebook launched its own sales platform in 2016.

All of them have generated a collaborative economy where the consumer becomes a seller and enters the circuit experiencing the possibility of own earnings. Thus, interactions have increased and the second-hand culture has been gaining followers.

Faced with this phenomenon, it is not surprising that brands have reacted by creating their own portals. In this way they can better control a product subject to constant devaluation and, in addition, they sign up for the circular economy bandwagon.

On the other hand, large chains of stores that offer these products operate in the second-hand market. Walmart is one of them, with its own division for this segment. But there are also specific stores with different operating models.

• Second hand with social purpose. Non-profit stores are based on donations and have an altruistic purpose. In the United States, the most recognized case is that of Goodwill Industries, which has more than 3,300 physical stores and 120,000 workers. Goodwill has just presented its sales platform online.

• In between the lucrative models there are the consignment ones, where the formula is an inverse correlation between the time that the garment is in the store and the sale price, and those that work by buying stock clearances.

• The product stores vintagewhere the scarcity and exclusivity of products from another era (now understood by vintage 20th century fashion) has consumers willing to pay even a premium to find an iconic piece for their wardrobe.

• there are also the specialized by niches, where the second hand makes sense due to expiration or the change of sizes. This happens, above all, with children’s clothing, one of the most competitive segments in this field.

second hand challenges

Given so much proliferation of business models and the unstoppable growth of the market, some inventory problems and lack of storage space have also arisen.

In the second-hand market, operational issues are not easy: a lot of people are needed to sort the clothes that come into the store (not all of them in good condition for resale). In fact, recently The New York Times He published an article in which he warned of the declining quality of the products sold in second-hand stores.

The other question is what happens with the garments that are not sold in this market. Many of them go to foreign markets and, although they start from donations, sometimes they end up entering the commercial circuit, as the researcher Andrew Brooks has denounced.

With these issues to be resolved, in any case the second-hand market appears as a wave to join if one wants to respond to the new aspirations of consumers. Because, now, it is also fashionable to wear used things.

Teresa Sádaba, Dean at ISEM Fashion Business School, university of Navarra

This article was originally published on The Conversation. Read the original.