The Resale Edit: Why Brands Need To Understand The Structure Of The Resale Market

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Let's Talk Resale

Trove Inc.

34 episodes

9 months ago

In 2022 alone, there were 150 billion new garments produced to clothe a world of only 8 billion. 90% of that ends up in landfills. No question, the fashion industry is hurtling toward a reckoning. Here at Trove, we intend to learn, unlearn, and relearn so we can inspire our peers, the industry, and our youth that as a collectively conscious body, we can achieve growth without growing our emissions.

Let’s Talk Resale is a foundational series that considers the emerging landscape of resale also known as recommerce. We follow Andy Ruben - Founder and Executive Chair of Trove - as he dives deep into the trends shaping the circular economy.

Each episode’s theme will address key issues that brands face when adopting a recommerce platform. We’ll interrogate the nuances of sustainability and discuss the implications of recommerce for brand control. You’ll hear key anecdotes from brands with resale models that are already thriving, such as REI, in addition to a bottom-up approach, where we interview several members of Gen Z, and gain insight into the future consumer.

To capture the fast-paced weekly news in the resale industry, we have an episode every Tuesday, The Resale Edit, that highlights the key trends and takeaways for brands and their teams which is hosted by Trove's Head of Content, Samantha Dersarkissian. Subscribe to the accompanying newsletter here.

This series is a tour de force that will educate, inspire, and offer insight into Trove’s product and vision. While targeted to thought leaders and luxury executives, all listeners will gain a robust understanding of the state of recommerce. Along the way, you'll come to face the inevitable choice fashion brands must make to stay relevant in the 21st century.

Looking for more resale content? Check out www.trove.com

All content for Let's Talk Resale is the property of Trove Inc. and is served directly from their servers with no modification, redirects, or rehosting. The podcast is not affiliated with or endorsed by Podjoint in any way.

The Resale Edit: Why Brands Need To Understand The Structure Of The Resale Market

Let's Talk Resale

7 minutes

2 years ago

The Resale Edit: Why Brands Need To Understand The Structure Of The Resale Market

Happy New Year, and Welcome to what is sure to be a dynamic 2023 for Resale.

Let’s start with Glossy’s article, The state of resale in 2023: Competition, consolidation and a push for profitability. The piece assessed players from The RealReal to Treet and summarized with “twin challenges of an overcrowded market and the growing expectation for profitability will be difficult to overcome.”

A critical element is missing in this assessment. The distinction between The RealReal, which is a third-party marketplace building its brand and customer base, and Treet a service provider aimed at supporting brands who are adding resale to their existing business.

Third-party marketplaces, such as The RealReal, Thredup, Poshmark (now part of South Korean internet conglomerate Naver Corp.), and Vestiaire Collective, are retailers who focus on their brand and build a profitable customer base. They exist in a reasonably mature market, and most players are now public. Vestiaire is the exception, who just raised $80B in debt as they work toward profitability. While there is room for a few players in the space, it is overcrowded today. Given the lack of profitability and the economic climate, valuations are lowered, and more consolidation is to be expected. In this part of the industry, Glossy is right on the money.

Service providers, such as Trove, Recurate, Archive, Reflaunt, and Treet, are not building a customer-facing brand or a loyal customer base. They are service providers who support brands whose items are being resold on marketplaces such as The RealReal the Thredup. This part of the industry is far less mature and is poised for incredible innovation and growth as more brands enter Resale and work to scale their offerings.

Scale will be the test for the service providers as the brands mature and look for more scale, but it’s likely too early for consolidation here. That will be in 2024 and beyond.

The second Glossy article, What to expect from fashion rental in 2023, details the up and down year for rental in 2022, including new brand launches into rental such as Marks and Spencer, John Lewis, and MatchesFashion all launched rental while both Ann Taylor and Banana Republic quietly shut down their rental programs.

Rental is a new customer behavior, and brands must determine if rental is right for their brand. Customers aren’t going to want separate rental programs for every brand and need in their wardrobe. Hence these programs will likely make sense for multi-brand retailers such as Rent the Runway, Selfridges, Nordstrom, or REI and possibly for specific use cases such as Burton’s rental kit, including snowboard, boots, bindings, and outerwear for hitting the ski slopes.

The Key Takeaways

If your brand is exploring different circular models such as rental, think about the value for your customers over the long term. Brands will learn the most as they enter the space in the most customer-centric way for their products.
Brands need to be aware of who they ‘partner’ with as customers look for more preowned options. Third-Party Marketplaces, such as ThredUP need to build their brand and loyal customer base and are not aligned to do the same for a brand.

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