In 2020, in the U.S., 33 million people bought second-hand clothing for the first time, and the global second-hand market should grow by 15-20% per year in the next 5 years. But why are consumers turning to second-hand clothing? What innovative offers and business models are emerging to meet the growing demand? How are brands adapting to this consumption shift? And how is Unibail-Rodamco-Westfield promoting fashion circularity in its centres?
A new report published by ThredUP (based on GlobalData’s findings) states that U.S. consumers have a preference for “more sustainable fashion choices”. This conclusion confirms findings of two researches conducted for Unibail-Rodamco-Westfield over the past two years (learn more about the TrendWatching report on sustainable consumption and the How we shop report on the evolution of retail). These reports showed that consumers were very sensitive to eco-friendly and cleaner products (“76% of shoppers want retailers to commit further to address environmental concerns”) and highlights innovative alternative business models such as circular economy, especially when it comes to fashion.
This preference for more sustainable fashion choices means that there is a growing interest for second-hand apparel: in 2020, in the U.S., 33 million people bought second-hand clothing for the first time. More generally, the ThredUP study predicts the boom of the second-hand apparel market in the U.S.: it is expected to reach $77 billion within the next 5 years (vs. $36 billion in 2020).
And this rapid growth is not limited to the U.S.: in 2020, The Boston Consulting Group (BCG) conducted a study in 6 countries (the U.S., France, Spain, Italy, Germany and the U.K.) for Vestiaire Collective – the online platform for luxury second-hand fashion items – and estimated that the global second-hand market should grow by 15-20% per year in the next 5 years.
Why are consumers turning to second-hand clothing?
Consumers are prioritising sustainability, retailers are starting to embrace resale. We are in the early stages of a radical transformation in retail.James Reinhart
Indeed, one of the key drivers behind this rapid growth is the consumers’ awareness and concern about the environmental impact of clothing: 70% of the BCG study respondents stated that they turned to second-hand because they believe it to be a more sustainable option (vs. 62% in 2018).
As consumers become increasingly concerned by the environmental impact of clothes’ production, transportation and waste (greenhouse gas emissions, water consumption, landfills), many are increasing their second-hand consumption to limit carbon footprint. Instead of throwing clothes away – one truckload of clothing is landfilled or burnt every second in the world, source: Ellen McArthur Foundation –, circular models like resale empower consumers to give clothes a second life and avoid landfill.
The boom of resale marketplaces
The second-hand market boom is especially driven by resale platforms. These digital resale marketplaces – such as Depop, Vinted, Vestiaire Collective, ThredUP or the RealReal – connect consumers with no intermediary, hence they are called a “C2C (consumer-to-consumer) model”. They are expected to go from $15 billion in 2021 to $47 billion in 2025 in the U.S.:
Source: ThredUP study, 2021.
And the main marketplaces have raised hundreds of millions of dollars in just a decade: Vestiaire Collective raised $240 million, The RealReal $357 million, Vinted $260 million, Depop $105 million and ThredUP $305 million1.
The emergence of innovative business models and offers
As the second-hand trend is becoming more mainstream, it has drawn the attention of traditional brands. Whether it be clothes donations, thrift stores or digital resale marketplaces: a diversity of models are emerging to answer new demand for a more sustainable offer.
More and more brands are creating new concepts to include second-hand offer alternatives on top of their traditional offer: in that respect, 60% of fashion retailers have offered or are open to offer second-hand to their customers (ThredUP report). For instance, Levi’s launched its own second-hand website “Seconhand Levi”, likewise Aigle launched its resale website “Second Souffle” and Decathlon “Seconde Vie”, Nike created a new service dedicated to second-hand called “Refurbished”. Other brands are opting for partnerships to encourage customers to turn to second-hand, as the BCG study points out that 62% of respondents say they are more likely to purchase from brands that partner with second-hand actors. For instance, Stella McCartney partnered with The RealReal in 2018 and offered $100 vouchers to customers buying Stella McCartney through The RealReal.
How does Unibail-Rodamco-Westfield promote fashion circularity and resale?
URW is aware of its responsibility to foster change towards a healthier and more responsible consumption. This ambition is fully embedded into the Group’s activities and its Better Places 2030 strategy, taking this commitment at multiple stages of operations. The Group therefore engages on increasing the presence of sustainable offers in its portfolio, be it through partnerships with existing tenants to enhance their sustainable collection or the integration of leading sustainable brands.
Given the importance of the fashion sector in the Group’s assets and the impact of the fashion industry on the environment, the Group made circularity in fashion one of its key priorities. The increase of second hand stores in the portfolio is one of the many results of this progressive transformation:
In France, Eureka Fripe (the company that owns Kilo Shop, KiliWatch and Hippy Market) is opening 3 points of sales in the Group’s destinations (Eureka Fripe currently has 13 stores in total and plans on operating 40 stores in 2025 as demand keeps rising). In the U.K., Beyond Retro, a vintage clothing retailer, opened a pop-up store in Westfield Stratford City for 6 weeks. Beyond the brands found in URW destinations, there are many other ways shopping centres support circularity in fashion, for example through initiatives that empower customers. As hubs of activity, community support and cooperation, URW centres enable more eco-friendly behaviours through the implementation of infrastructure (collection points for example) or services and events for many in the communities around our centres. This can be seen in the success of projects such as:
- Partnerships in 18 centres with local companies and NGOs to reuse or recycle second-hand clothes. Despite the sanitary restrictions in 2020, they still managed to collect 129.5 tons of textile,
- The French Red Cross that set up a Reverse Store concept in 9 French centres in 2020, where visitors could drop off clothes and textiles to be resold or recycled. Proceeds from this initiative helped fund community outreach,
- The NGO Caritas partnered with Shopping City Süd in Austria in July 2020 to enable visitors to give away old clothes and receive a voucher in exchange, which enabled Caritas to collect 2.5 tons of clothes,
- As a result, overall, in 2020, URW’s centres helped give a new life to 147 tons of fabric.
Finally, supporting a more sustainable fashion also translates into the integration of other innovative fashion retail formats, those of positioned brands such as:
- Movesgood, a sustainable fashion apparel brand based on bamboo clothing, opened a pop-up at Westfield Mall of Scandinavia and Täby Centrum,
- Kitikate, a brand selling organic-certified cotton infant clothes, launched their kiosk at Centrum Cerny Most,
- SIRPLUS, a contemporary menswear brand that upcycles surplus fabric, opened at Westfield London.
By ensuring a diverse offer to visitors, we can respond to their growing demand for more sustainable products and services, and promote brands looking to make a difference.
At URW we are convinced we have a role to play towards a more responsible consumption and we work on the short and long term solutions. We exchange with customers to better understand their expectations on sustainability, create sustainable marketing content and services, identify new retail players or encourage our retailers to enhance their sustainability policies and offering. By empowering our ecosystem, we are convinced we can make a lasting difference, create new future-oriented partnerships and reinvent the retail industry towards more environmental and social consciousness.Clément Jeannin