Poshmark Inc., the peer-to-peer online resale platform, just announced that it is preparing to go public. The company's success may be shocking to some, but business analysts are not surprised since resale has been gaining popularity for the last decade, and there is no sign of slowing. Eco and budget-conscious consumers have been the main drivers behind the demand for secondhand goods, but celebrities and fashionistas have also drawn more wealthy shoppers to vintage stores. With an industry-wide move in favor of secondhand fashion, there is just one question: can the resale market keep growing?
Secondhand shopping is the general term that includes both the resale (consignment) market and the thrift (charity) market. Thrift shopping is the selling of clothes and goods that were donated, meaning the first owner made no money when they relinquished their possessions. Thrift clothes are usually not curated, but just piled together, and potential customers have to sort through in the hope they find something they want. Resale, on the other hand, includes clothes and goods that are bought from the first owner and are then organized based on style, size, color, and more. Thrift shopping was the first form of secondhand shopping that gained popularity among consumers, but in the last couple of years, resale has caught up with and is projected to surpass thrifting.
During the annual ThredUp industry report, GlobalData presented statistics showing that the resale market is expected to grow by 39% in five years, from $7 billion in 2019 to $36 billion in 2024. The thrift and donation market had a $21 billion value in 2019 but will grow only 6% to $28 billion by 2024. A big factor of resale's success is resale platforms' ability to exist online. In contrast, thrift stores have typically been physical locations with little or no digital presence. COVID-19 related lockdowns have caused a shift to online shopping, and there is no sign of that consumer behavior reversing soon.
Resale has not become popular because of it's online presence alone, though. Traditional retail — in this case, defined as any new products entering the market for the first time — is seriously struggling compared to resale despite both categories having strong digital outlooks. GlobalData reports that in 2019 the resale market grew 25X faster than the traditional retail market. By the end of this year, the traditional retail market will shrink, whereas resale will dominate any growth the fashion industry sees. Even fast fashion, which has persisted despite a hatred from both consumers and fashion leaders, is expected to be dwarfed by the resale market by 2029. Projections indicate that the resale market will have a $44 billion value by 2029 compared to fast fashion's $43 billion. The total secondhand market, including the thrift market, will be $80 billion by 2029 — nearly double the fast fashion market.
Retailers recognize the power of resale. Traditional retailers have recently started partnering with resale platforms like ThredUp and The Real Real to get a share of some of the money to be made. Sustainable brands like Reformation, Christy Dawn, and Amour Vert, as well as non-sustainable brands like Abercrombie & Fitch, Gap, and Walmart, have partnered with ThredUp to sell unsold items or resell returned items. Luxury brand, Burberry, has partnered with luxury resale platform, The Real Real.
Convenience, lower cost, and uniqueness contribute to the rise of resale, but a lower environmental impact is the real draw to the secondhand market. ThredUp calculated that if everyone on earth bought one item used instead of new, 5.7 billion pounds of carbon dioxide, 25 billion gallons of water, and 449 million pounds of waste, would be reduced. Consumers are well aware of the impact they have on the environment, and because of that, secondhand shopping will only be more popular in the years to come.