There’s never been a better time—or more need—to buy your clothes used. At least that’s the case I made in a recent story on the burgeoning fashion resale market.
On Aug. 16, I joined Quartz members on a conference call about this fascinating, and growing, industry. What follows is a truncated version of my Q&A with Quartz managing editor Kira Bindrim, including questions submitted directly by those listening in. (Interested in watching past conference calls? You can check them out here. Plus keep an eye on your email for notifications about upcoming calls.)
Kira: Your story articulates an inflection point around resale—sort of a convergence of trends and forces that make now an important time for the resale industry. Why write this now?
Marc: The fashion resale industry has really been maturing over the past decade. This year you’re seeing it hit the mainstream in a new way, through examples such as The RealReal’s IPO and ThredUp announcing partnerships with Macy’s and JCPenney.
At the same time, the awareness around fashion’s major sustainability problems continue to grow. Buying used has emerged as a more sustainable way of shopping, so there aren’t just more options in resale but more need for it too.
Kira: TheRealReal, which is one of the high-end consignment marketplaces you mention in your story, recently went public at a valuation of more than $1 billion. So that’s one pretty big player in this space. How would you describe the makeup of the other companies in this market?
Marc: It’s hard to offer specific numbers since these are private companies under no obligation to share their internal data. But it’s fair to say they range quite a bit in terms of size and audience. ThredUP and Poshmark are some of the bigger players in the space. ThredUp says it lists 40,000 items on its site every day, for instance. These two tend to aim for more of a mass-market audience. Grailed and Depop, on the other hand, have succeeded by finding their niches. Grailed has a following among young guys versed in designer labels and streetwear. Depop has built up a following with teens and influencers.
Of course eBay is still a force in fashion resale, too, and still the largest of all these companies.
Kira: How would you describe the spectrum of offerings in the resale space? If at one end we have peer-to-peer marketplaces and at the other full-service companies?
Marc: There are varying degrees of service offered by fashion resellers. The model for the peer-to-peer marketplace is eBay, where it’s entirely up to the seller to photograph their item, write a description, and handle the shipping if it sells. That’s how sites such as Grailed work too. But there’s also the approach that Tradesy takes, where it’s a peer-to-peer marketplace but they have software that makes your photos look nicer. If you sell an item, they provide you with a shipping kit, so there’s a standard look to the packages buyers receive.
At the other end of the spectrum are companies such as ThredUP and The RealReal. People just send their clothing into ThredUP and the company handles all the work of photographing, listing, and selling it. (They only accept about half the items they receive, paying for what they keep and sending the rest to be recycled.) The RealReal works similarly, and authenticates everything as well since it’s focused on luxury consignment specifically.
Kira: We know some more traditional retailers, like Macy’s and H&M, are also getting into resale? Why do you think that is? How do their offerings compare to the other companies we’ve discussed?
Marc: In the case of a company like H&M, they’ve been pushing their sustainability efforts for a long time now, even if their high-volume business model is arguably unsustainable in itself. Their venture into resale is part of that. Retailers such as Macy’s and JCPenney, which both just announced partnerships with ThredUP, are probably more interested in shoring up their businesses and attracting new customers. They’ve had struggles much like other department stores. Resale lets them fill some of the holes in their merchandising, promote the environmental benefits, and potentially get a new, and probably younger, customer into the store.
Kira: One of the major points raised in your story is that focusing on resale is necessary right now because of the environmental impact of clothing. How has that impact changed in the past decade?
Marc: The volume of clothing produced is rising fast. The consultancy McKinsey estimates that clothing production worldwide doubled between 2000 and 2014. It’s that volume that’s a big part of the problem. To make the materials used in clothing is very resource-intensive and dirty. Dyeing and finishing fabrics in particular can produce a lot of pollution. A lot of clothing is tossed out well before it’s worn out. A small share is recycled into products such as rags or stuffing for things such as car seats. A great deal of it just winds up in landfills. Very little is turned back into wearable clothing. The Ellen MacArthur Foundation, which advocates for a circular economy, has estimated that less than 1% of clothing produced globally gets recycled into new clothes. So the more stuff that’s made the bigger problem.
Kira: What’s your impression of the resale market globally, both in terms of companies and customers?
Marc: My main impression is that it’s growing fast! Investment firm Cowen recently noted that they estimate a compound annual growth rate for resale of 29%. Many of the companies I’ve mentioned are based in the US, but not all. Depop and Vestiaire Collective were both started in Europe and serve a lot of European customers. Reebonz is a large multibrand retailer based in Singapore that now sells used clothes. Still, the largest companies appear to be the American ones for now. They likely have their sights set on international growth too, of course.
Kira: It seems like one solution here would be to recycle our clothing when we’re done with it, so it can be made into new clothing. Why is that still so difficult?
Marc: There are logistical challenges that brands and retailers just aren’t well set up for, such as collecting all the clothes and processing it. But the bigger issue right now is technological. We can recycle some polyester, but we just don’t have good methods yet for recycling cotton, the most-used natural fiber in clothing. The standard method involves chopping it up, which degrades the quality of the material. It’s why brands that use recycled cotton in clothes only use limited amounts. Blends are also a challenge since the fibers have to be separated before they can be recycled.
There are companies making progress on these fronts. But as of now, there isn’t a widely available, ready-to-scale solution.
Kira: When retailers like H&M invite customers to bring in clothes to be recycled, what does that mean? Should we trust them?
Marc: It’s a big point of debate how much they should be trusted. At H&M, for instance, they’ll give you a 15% discount for your next in-store purchase for every bag of textiles you bring in for recycling. It creates an incentive to buy more stuff, arguably fueling the problem of overproduction in fashion. A partner company, meanwhile, takes the clothes and ships them to different plants to be sorted. H&M says clothing that can still be worn is sold again as secondhand goods. Other stuff is recycled, meaning it’s generally turned into rags or insulation for things such as car seats.
Kira: It seems like no matter what, reducing the environmental impact of clothing means less clothing production. Do you believe this can really happen? What forces—consumer pressure?—are likely to effect that kind of widespread change?
Marc: I believe it’s possible, but it certainly won’t be easy. Consumer pressure helps. However, at the moment I see no reason to believe people will change their shopping behavior en masse. I also think brands shouldn’t be expected to wait for shoppers to tell them what to do if they already know what’s right themselves. I think ultimately it will probably take action from many different stakeholders, including brands but also governments and NGOs, to really change the paradigm of how fashion is produced and sold.
Kira: What advice would you give a sustainable-goods startup looking to compete with big brands like Gucci and Prada?
My advice would be that you can’t rely on sustainability alone to sell your products. Even big brands have become more aware of the need to change how they operate. Many now have their own sustainability programs in place. Whether you believe they’re really sustainable or not, they can now say they’re doing things in more responsible ways. If you want to differentiate your brand, you need to have a reason for shoppers to buy it, whether it’s a unique value or design point of view. Sustainability is becoming table stakes.