As department stores, in a domino effect, begin to seriously entertain secondhand to lure Millennials and Generation Z, the folly might lie in weak messaging and execution as well as “thrift culture appropriation.” Observers say this might turn away today’s thrift purists, who have grown in number and have fueled the vintage, secondhand and resell market.
Some within the resale community are comparing this trend to a Gen Z’s parents, for example, joining Snapchat or Instagram to be as cool as their kids. “For Macy’s and J.C. Penney to take on resale simply shows their desperation,” said one retail consultant who requested anonymity since he is working with these companies. “They have run out of ideas. Instead, they should cut their store base in half and focus on execution.”
Time will tell how the entry into resale is embraced by consumers, especially if the newfound interest is driven by a retailer’s need to recapture market share. Meanwhile, the clock is ticking. Fears of a recession loom on the horizon, and the critical holiday shopping season is just around the corner. All of which is framed by retail’s physical transformation: To date, “major retailers have announced 7,567 store closures so far this year,” noted Coresight Research. “In 2018 overall, major retailers closed 5,524 stores.”
For thrift shopping — and its close associates being consignment, and vintage, etc. — the segment has undergone spells over the past two decades in which there are swells of support or a dampened image for its associations to frugality or uncleanliness. At the moment, though, due to the mainstreaming of apparel resale — secondhand is the burgeoning opportunity that department stores, traditional retailers and brands are itching to figure out.
Analysts at CB Insights, which forecast the global luxury resale market to surpass $50 billion by 2024, ascribe this new mode of behavior for retailers and brands. And it all starts with a concept called “assetization.” That Chanel flap bag, the Hermès Birkin bag or the most coveted Yeezy releases — all assets.
It’s underpinned by an outcry from consumers: “Make better products,” and analysts argue there needs to be an adaptation of business models to be inclusive of their experience-led desires. Thus, brands are posed with the challenge to design products that last and — which can be resold, reused and rented — essentially becoming “asset-backed securities,” in the latter use case.
This theory contrasts fast-fashion’s production model, which is why fast-fashion goods will not be participants in the “assetization economy.” Although secondhand apparel and accessories will creep into bigger shares of closet space of more and more consumers, industry experts argue that fast fashion will still secure its share.
Similarly, Deborah Weinswig of Coresight Research and Jill Standish of Accenture inform that not only department stores, but “most retailers” are at risk if not taking a swing at the resale opportunity. But the intention may be more important than the execution.
Traditional department stores follow suit as Neiman Marcus partnered with Fashionphile, then Macy’s, which first dipped its toes in with opening small departments for “vintage” bags, announced its pilot this week with ThredUp in 40 stores for back-to-school season. And J.C. Penney followed suit, partnering with ThredUp in 30 of its locations.
As for those dabbling in the rental space, there is Bloomingdale’s (in moderation); Urbn — the parent company of Anthropologie, Urban Outfitters and Free People (taking on the rental business full-on in launching Nuuly); a more comprehensive outlook citing Filippa K and Tchibo already invested in the rental business, and American Eagle, Ann Taylor, Express, Gwynnie Bee, New York & Co. (NY & Company Closet), Rebecca Taylor (RTND), Vince and Y Closet in the rental-subscription segment. Eileen Fisher, Filippa K, Icebreaker, North Face, Patagonia, Prana, REI, Arc’teryx and Zalando are the established brands who have entered the segment.
While the entry into the resale market is what serves as a big example to traditional retailers and department stores, will it receive the same applause from the younger generations in the result of repeat foot traffic, brand loyalty and upsell for department stores? In attempts to bring new shoppers into the fold, the efforts of traditional department stores must be weighed against the opinionated Gen Zers.
Shepherds, rather than sheep — this consumer will align with those that put values at the forefront, not pursuing resale for resale’s sake. Retailers and brands pursuing resale, as there will be more, should ensure their messaging is clear. Align with consumer values such as individuality — Cover Girl’s first cover boy, James Charles was a demonstration of inclusivity and self-expression for everyone — and sustainability. Many players in the resale industry argue that brands will be the ones folding their secondhand channels back into their own domain, meaning marketplaces could be moot, essentially.
And for those young shoppers (innovators in resale, or those who have shopped secondhand because of price, environmentalism, individuality long before the mainstreaming moment) with an ingrained preference for shopping secondhand, if it’s a toss-up between their local thrift shop, a vintage shop or a department store — then the answer is pretty clear where their money is and isn’t going.
From here, the secondhand partnership possibilities are endless. Nordstrom may be the next department store to dive into resale, having been a connoisseur of cafe and restaurant experiences in addition to its fitting room tech experimentations and a Rent the Runway drop-off kiosk. Or maybe luxury brands such as Chanel will decide to divert energy away from pushing lawsuits at The RealReal and instead own its own resale channel be it with a third-party partner or internal buildout.
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