Retail Channels
06 April
US resale market to reach $70B by 2027
A new report from thredUP says online resale will grow at 20%, pacing the growth of the global secondhand market.
New projections are showing continued growth for the worldwide resale market, as Gen Z increasingly embraces secondhand shopping.
A new report from thredUP and GlobalData shared the following about the resale market:
The global secondhand market is expected to double by 2027, reaching $350 billion.
The U.S. secondhand market is expected to reach $70 billion by 2027.
Online resale is expected to grow 21% annually over the next five years, reaching $38 billion by 2027. It's the fastest growing resale segment.
Here's a look at the key factors behind resale's growth:
What’s driving the growth?
Apparel: From thrift to consignment, secondhand clothing has long been sought by consumers. A new generation of resale is shifting shopping online, but demand to mine old threads for new looks remains high – and potentially more sought-after than ever. According to the report, 52% of consumers shopped secondhand apparel in 2022. Meanwhile, one in three apparel items purchased in the last year were secondhand, while two in five items in the closets of Gen Zers are secondhand.
Price savings: At a time of 40-year-high inflation, consumers are also seeking to stretch dollars, and turning to resale to do so. Value was the top motivator among consumers surveyed. In all, 37% of consumers spent a higher proportion of their apparel budget via secondhand, and 63% of those said inflation was the reason for increasing spend.
Secondhand first: A new generation of consumers is seeking out resale as a primary option. According to the report, 82% of Gen Z eyes the resale value of apparel before buying it, while 64% indicated that they look for an item secondhand, before opting for a new item.
(Courtesy of thredUP)
Environmental imperative
At a time when consumers are seeking to reduce carbon footprints and remain environmentally conscious, resale offers an option to keep an item that would’ve gone to waste in use, rather than buying a new item. Demand for these circular approaches is only growing. The share of consumers who bought a secondhand apparel item that they normally would have purchased new increased by 40% in 2022, to 1.4 billion items.
(Courtesy of thredUP)
The retailer view
Retailers are also looking to make resale part of their operations. One-third said that if resale proved successful, they would cut production of new products. To grow resale, brands are launching their own dedicated programs that include trade-ins, incentives and dedicated ecommerce sites for resale items of their products.
In all, 88 brands launched dedicated resale programs in 2022. That’s a 244% increase from 2021. The report states that 30% of the top 20 brands are offering dedicated resale. Torrid, lululemon, Madewell and Zara remain some of the most popular brands.
They’re responding to demand. The number of retail executives who said their customers are already participating in resale was up 8 points from 2021, to 86%.
It underscores that, increasingly, executives are viewing resale as a must. The survey found that the share of retail executives who say offering resale options is becoming “table stakes” rose six points over 2021, to 58%.
"What's particularly striking this year is new detail around how much younger generations are expected to account for future growth as their purchasing power increases,” said Neil Saunders, managing director of GlobalData, in a statement. “Traditional retailers are responding to this demand by entering resale and are really the ones driving the market forward, and we expect increased adoption in retail as secondhand becomes more of a lifestyle for consumers."
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Hunter is joining ABG's portfolio. (Courtesy photo)
Funding
Chamberlain Coffee raises $7M
Chamberlain Coffee, the consumer brand founded by YouTube influencer Emma Chamberlain, raised $7 million in new funding.
The financing included backing from existing investors including Blazar Capital, Chamberlain and United Talent Agency. New investors include Volition Capital, Electric Feel Ventures, L.A. Libations and Noah Bremen, founder of PLTFRM.
The new funding follows the launch of a Ready-to-Drink (RTD) product and coffee pods. Previously, the brand raised a Series A in August 2022.
"Creating a uniquely inviting coffee brand has been my dream for so long now, and having key investors back us allows us to build Chamberlain Coffee in ways that feel fresh and exciting,” said Chamberlain, in a statement. “There are so many products I am eager to develop and projects I'm excited to get working on. With such an incredible team and group of investors I am more excited than ever to see what the future holds for Chamberlain Coffee."
Impact Analytics raises new funding
Impact Analytics, a software company for retail supply chain and merchandise planning, raised new funding from Vistara Growth.
The new investment, the amount of which was not disclosed, comes after Impact raised funding in February 2021 and October 2022 from Argentum.
The funding will help Impact Analytics further develop its Impact Analytics SmartSuite product portfolio, which is designed to help optimize forecasting, merchandising and end-to-end lifecycle pricing. Rather than the traditional forecasting approach of basing decisions on the preceding year, Impact Analytics applies a model that includes 150 variables from internal and external sources, while combining recency and history. Clients include BJ's Wholesale Club, Dick's Sporting Goods, Puma and Tapestry.
Selva Ventures closes $34M Fund II
Selva Ventures, a venture capital firm focused on consumer brands that promote healthier living, closed its second fund at $34 million, TechCrunch reported.
With the new funding, Selva will invest in brands across categories including health, wellness, beauty and personal care. The fund expects to write checks of $1-2 million in seed and Series A startups, while assisting in areas like finance, operations and retail partnerships.
Backers of the second fund include Unilever Ventures, PagsGroup and Obelysk.
Mergers and acquisitions
Authentic Brands Group acquires IP of Hunter
Nautica and Forever 21 owner Authentic Brands Group acquired the intellectual property of Hunter, a 160-year-old British outdoor lifestyle brand known for its Wellington boots.
With the deal, ABG appointed longtime partners Batra Group and Marc Fisher to execute retail and ecommerce operations, as well as continue to expand the brand in the UK and U.S., respectively.
“At the intersection of fashion and outdoor, Hunter introduces another elevated global brand to Authentic’s diverse Lifestyle portfolio,” said Authentic CEO Jamie Salter, in a statement.
Terms of the deal were not disclosed.
IKEA owner acquires supply chain software
The investment arm of IKEA parent Ingka Group acquired the warehouse management software platform Made4Net.
As a result of the deal, Made4Net’s software will be deployed across IKEA’s 482 stores and fulfillment centers. Made4Net will continue to operate as an independent subsidiary of Ingka, with a headquarters in New Jersey. CEO Duff Davidson will remain at the helm of the company.
“Our business currently requires a better fulfillment operations system with more accurate data that better supports handling for our customers,” said Tolga Öncu, head of retail at Ingka Group, in a statement. “Our goal is to become leaders of life at home, serving more people in an omnichannel reality, whenever and however customers choose to meet us.”
SellerX acquires Elevate
European ecommerce aggregator SellerX acquired Elevate Brands, a U.S.-based aggregator.
The combined companies will be known as SellerX Group. It will comprise a portfolio that includes 80 Amazon-native private label consumer brands in categories including sports and outdoors, home, mobile accessories, pets and consumables. The portfolio will span over 40,000 products.
With the deal, SellerX Co-CEOs Philipp Triebel and Malte Horeyseck will lead SellerX Group, while Elevate Brands cofounders Ryan Gnesin, Jeremy Bell and Robert Bell will remain in key leadership positions.
“This acquisition combines our know-how and diversified portfolios of strong brands with a market-leading technology platform and strong operational infrastructure,” said Triebel, in a statement. “By leveraging our combined strengths, I am convinced we are well-positioned to drive further consolidation in the industry.”
Society Brands acquires Wolf Tactical
Ecommerce aggregator Society Brands acquired Wolf Tactical, a tactical gear company.
Founded in 2017 by Tim Wu, Wolf Tactical makes products including DC belts, range belts to weighted vest and tactical backpacks.
"I started Wolf Tactical by myself as a side hustle with very limited knowledge of business and entrepreneurship. A combination of hard work and relentless learning allowed me to build it into a multi-million-dollar business," said Wu who will remain as brand president, in a statement. "With the help of Society Brands, I have access to untapped potential that I would not be able to achieve by myself.”
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