As the supply chain crisis threatens to disrupt the holiday shopping season, more people are turning to an unlikely source — used clothing — to fill the gap.
November is known traditionally as one of the best months to find deals. This year, however, many hot products are in short supply, or are more expensive than usual because of supply chain bottlenecks. And while discount sales started sooner this year, the secondhand clothing market is increasingly popular.
“We've seen an explosion in sales of small leather goods, accessories, scarves, things that we consider giftable items are selling, where up 60% year over year,” Tracy DiNunzio, Founder and CEO of Tradesy — , an online marketplace where people can sell their second-hand luxury goods — told Yahoo Finance Live on Thursday.
Online secondhand and consignment platforms have been growing in popularity, even before the pandemic hit last year. In 2019, this segment expanded 21 times faster than conventional apparel commerce.
Thanks to the resale boom, there’s no lack of options when it comes to thrifting these days. However, Tradesy is different from other popular online secondhand marketplaces like Thredup, Mercari and Poshmark.
“Tradesy is one of the only sites where you can find all of the luxury brands on earth, from Louis Vuitton to Chanel, Gucci, to new indie brands that are just coming out,” DiNunzio said.
“The reason that we focus so specifically on luxury is that we want people to buy higher quality goods that can have multiple owners throughout their lifetimes and never, ever end up in a landfill,” she added.
The secondhand market has evolved throughout the years. Yet Tradesy leans on a “peer-to-peer” business model — which means that it facilitates direct commerce between buyer and seller.
“We don't take any inventory. We do everything with technology. We replaced human middlemen with smart technology, so that we're minimizing the amount of shipping and handling necessary to sell each item,which are the lowest fees in luxury,” DiNunzio said.
“Tradesy sellers earn more while Tradesy buyers pay less,” the executive added.
While Tradesy’s luxury space competitor The RealReal takes a commission on sales between 15 and 60 percent, DiNunzio explained that “our sellers pay 17% of the sale to us, that's the lowest in the luxury category by quite a bit as a new seller on your first item you would pay 19.8%.”
Secondhand sales boom
Meanwhile, seventy-seven percent of American adults said they expect to buy at least one second hand item this holiday season, according to a report by Mercari, an online marketplace for U.S. consumers who want to shop and sell items no longer being used.
This means $69.2 billion may be spent on previously-owned items from October through December 2021, up 24% from last year, the data found.
Another reason for the sudden interest in secondhand clothes may be linked to economic uncertainty revolving around the supply chain crisis. Even so, younger shoppers are emerging as big fans of pre-owned clothing.
The younger generations are more on board with the idea that their habits, especially their consumer habits, are going to determine the future of our climate.Tracy DiNunzio, Tradesy CEO
Generation Z, the demographic born between 1997 and 2018 (ages 7 to 22), has embraced the growing clothing resale movement, which champions buying less and selecting gently used items over new, mainly for sustainability purposes. This demographic is turning to secondhand buying at a rate 250% faster than other age groups, according to a 2020 survey from Mercari.
That trend is to what Tradesy has found: 44% of U.S. Millennials and Gen Z consumers now shop for secondhand fashion, compared with 20% in the same age group in 2016, and 3% in 2010.
“The younger generations are more on board with the idea that their habits, especially their consumer habits, are going to determine the future of our climate,” DiNunzio told Yahoo Finance.
“Fashion and apparel causes 10% of all of our global greenhouse gas emissions, it's younger generations who are really taking the initiative to change in this industry, shifting away from fast fashion and making big efforts to buy pre-owned and to sell the things that they're no longer wearing,” she added.
Unemployment numbers, while having fallen sharply in a surprisingly hot jobs market, are still above pre-pandemic levels, and the cost of living on the rise. Those factors make buying pre-owned fashion an attractive way for consumers to look for bargains this holiday.
Meanwhile, more than 40% of items on Tradesy are new with tags, so customers can gift pre-owned — but still give something that's in pristine condition.
“A lot of our sellers are selling things that they thought were a good idea when they bought the retail and then just never happened to wear it and left the tags on, those are great deals. That's a great way to get a gift that still has tags on it,” DiNunzio said.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv