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Smiling women shopping online with credit card
Many Gen Zers don’t want to buy new clothes or accessories. They feel that clothing is somewhat like puppies—why buy a puppy from a breeder when there are so many rescued dogs that need homes. Rescuing fashion from future landfills is high on this generation’s list of priorities.
If you have a daughter between 14 and 25 years old, you know that they like to buy clothes from sites like Depop, Poshmark, ThredUp and the RealReal. They also shop thrift stores and hold clothing swaps among themselves in an effort to be more sustainable. But did you realize that these young people are influencing both their Gen X parents and their Boomer grandparents to also shop in the secondary market? Our recent research with the Baker Retailing Center at the Wharton School of the University of Pennsylvania indicates that shopping for apparel in the secondary market has surged by at least 30% and by as much as 55% by generation since 2019. While only 52% of Baby Boomers had participated in recommerce in 2019, today that number has jumped to an eye-opening 81%.
Professor Thomas Robertson, Academic Director of Wharton’s Baker Retailing Center, told me “we see a rise in preference for the resale/recommerce market across all generations. More than 50% shop resale formats for a variety of sustainability reasons such as concern for the planet and preference for circular shopping. But Gen Z is also very price conscious, and our data indicate that 30% are driven by price as well.” Retailers must act now to be prepared for the tsunami of Gen Z’s influence. Bank of America predicts that by 2031, Gen Z’s income will surpass that of Millennials—just 9 years from now. If you were the CEO of Macy’s, Kohl’s, or Target, wouldn’t you want to capture these shoppers with a resale format of your very own so that you’re not left out in the cold?
It’s obvious from this report that the consumer is much more complex today than they were, say, even a decade ago. Retailers and brands must begin testing and learning with new formats today so that they can retain and attract consumers tomorrow. The best way to start is to listen to your consumers to understand the way they like to shop. Our data reveal that among the various sustainable shopping methods—brand/retailer-owned recommerce, rentals, subscription boxes, and peer-to-peer marketplaces – 65% of consumers across all generations prefer brand- or retailer-operated recommerce.
Brand- or retailer-operated recommerce seems like a no brainer. In the lifestyle recommerce category, Patagonia and Levi’s are leading the way. But despite the enormous resale value in luxury handbags, apparel, jewelry and watches, branded recommerce remains largely untapped by the big players. Kering, the luxury conglomerate that owns Gucci, Balenciaga, Bottega Veneta, and others, last year announced the acquisition of a 5% stake in luxury resale platform Vestiare Collective. Kering Chairman and CEO, François-Henri Pinault, told Vogue Business, “’Pre-owned luxury is now a real and deeply rooted trend, especially among younger customers. Rather than ignoring it, our wish is to seize this opportunity to enhance the value we offer our customers and influence the future of our industry towards more innovation and more sustainable practices.’”
As an early mover in branded recommerce, Kering will surely benefit against other big names in the luxury space. Think about how much the car market evolved when automotive brands like Lexus and Mercedes-Benz reinvented the used car market in the 1990’s. These manufacturers realized that a lot of money was being left on the table by allowing third parties to determine the value of their products. By rebranding “used cars” to “certified pre-owned vehicles,” the luxury car industry essentially reclaimed their own intellectual property and value and repackaged it for a new audience. Retailers and especially brands can learn from this example as just one way they can change the future of the industry with a viable path forward that—surprise – can also become a sustainable profit center.