2021 has undoubtedly been the year of resale – Poshmark and ThredUp took to the public markets, Vinted and Vestiarre Collective raised hundreds of millions in new funding, and Depop was acquired by Etsy for $1.6B. It’s also the year that brands have started taking resale seriously. Prior to 2021, you could count the number of fashion brands with official recommerce experiences on two hands – now you’ll need more than ten.
The abundance of branded resale programs can be attributed to a convergence of consumer and technology trends. The increase in the severity of issues that plague our planet has caused a surge in environmental awareness and conscious consumerism that will only continue to rise. According to ThredUp’s Resale Report, resale is growing 21X faster than retail and will double fast fashion by 2025, making it impossible for brands to ignore. Lastly, the pandemic has expedited the need for an effective e-commerce/DTC strategy, and with it, the importance of increasing customer loyalty at every turn. Launching a branded recommerce program became the perfect vessel to capitalize on these growing trends.
The Rise of Peer-to-Peer Branded Resale
Historically, the primary path for a brand looking to get into resale was to launch a takeback program alongside providers like Trove and The Renewal Workshop. While this is a fantastic model that continued to gain momentum in 2021 with the likes of Lululemon, New Balance, and Adidas, managed resale programs aren’t as feasible or affordable for the vast majority of fashion brands that can’t afford to take this on.
Enter: peer-to-peer resale. A model that requires very little overhead (no warehousing, manual inspections, re-packaging, etc.), allowing brands of all shapes and sizes to offer a resale program to their community. It also enables their customers to receive the highest value for their items sold in cash or credit back to their brand. Due to the affordability of this model and platforms like Treet to make it possible, brands are able to launch profitable resale programs from Day 1.
The ability to launch an official resale program quickly without adding any additional overhead spurred dozens of brands to kick off a program in 2021 (>10X growth from 2020). Here are some highlights from a few brands that launched programs powered by Treet:
Boyish is a sustainable denim brand that launched their Consignment Shop earlier in the year. The Boyish community has fully embraced the shop – hundreds of used items have sold. Check out our Boyish x Treet case study here to learn more.
Coclico is a luxury footwear brand that launched their resale experience with the intent to keep items out of the landfill and host sample sales. Over half of sellers opt for brand credit to purchase new Coclico items on their main site; these users spend an average 175% of the allotted credit. More details in our Coclico x Treet case study here.
Rough & Tumble designs high-end leather bags that sparked an engaged BST group on Facebook. They launched their resale shop on Treet as a way for the community to come together to buy and sell their bags in a safe and streamlined environment.
Sozy creates soft and cozy clothing with a charitable and environmental mission. Sozy Pre-Loved provides a destination for their customers to purchase styles from past seasons at an affordable price. Nearly 60% of all of their resale listings are purchased within a single month!
Four Branded Recommerce Predictions for 2022
1. Brands that aren’t traditionally known for being “sustainable” will adopt resale.
The first wave of brands to launch resale programs were those that wove sustainability into their brand ethos. This includes early adopter brands like Patagonia, Boyish, REI, Wolven, and many more. For them, the core value resale provides is all about keeping items out of the landfill to reduce their carbon footprint.
The next wave of brands to adopt resale will be for different reasons. Sustainability will always be relevant, but resale’s ability to attract new customers, increase customer LTV, and strengthen customer loyalty will also be significant drivers to usher in brands not known for their sustainability initiatives.
2. Resale strategies will become table stakes for apparel brands.
As more brands launch dedicated resale experiences, customers will begin to expect this from the brands they shop. In fact, according to ThredUp’s 2021 Resale Report, 43% of consumers are already more likely to buy from brands with a resale program. We’re starting to see this with several of the brands we work with. Customers are specifically requesting a path for selling items secondhand – brands that don’t listen may fall behind their community’s expectations.
3. Returns, production units, samples, and past-season inventory will become a significant percentage of sales through branded resale shops.
Fashion brands are rightfully shy about selling imperfect inventory directly on their site for fear of brand dilution. These items can pile up and cause significantly higher warehousing costs. Creating a dedicated resale shop opens up an opportunity for brands to sell imperfect and unsold inventory alongside resale units, providing a home for items that commonly end up in the landfill.
In the past year, nearly every brand on Treet has used their resale site to sell this type of inventory, which we call “Brand Direct.”
4. Climate change will accelerate the adoption of resale.
This is less of a prediction and more of a certainty. In 2021, we saw a record number of climate change-related weather events and a U.N Climate Report that stated we’re on a path to 30 years of worsening climate events. As this happens, consumer pressure will push more brands to adopt sustainable initiatives. Resale is by no means the only thing brands can and should do, but peer-to-peer resale is an easy, no-brainer initiative a brand can implement to take steps to be more sustainable immediately.
If 2021 was any indication of what’s to come for branded recommerce in 2022, we’re surely in for a treet :)
Feel free to reach out to us if you’re considering a resale strategy for 2022. We’d love to help.