2024 Resale Market Insights: ThredUp’s Predictions for a Sustainable Fashion Future

 

I. Introduction

The global secondhand apparel market is growing rapidly, and the 2024 Resale Report by ThredUp, now in its 12th year, shows the trends and the role the government can play in the fashion industry’s sustainable future. The report contains research and data from GlobalData and other sources, covering various aspects of the resale market.

II. Market Sizing

A. Global Secondhand Apparel Market

1. Growth Projection: Expected to reach $350 billion by 2028, growing 3X faster than the overall global apparel market. The market grew 18% in 2023 and is expected to grow at a CAGR of 12% between 2023 and 2028. By 2025, 10% of the global apparel market is expected to be made up of secondhand.
2. Regional Values: In 2021, Asia was at $141B, Europe at $167B, North America at $197B, South America, Africa, Australasia had values increasing over the years, reaching $230B in 2024, $264B in 2025, $295B in 2026, $324B in 2027, and $350B in 2028.

B. U.S. Secondhand Apparel Market

1. Growth Projection: To reach $73 billion by 2028, growing 11% annually on average. In 2023, it grew 11% which is 7X faster than the broader retail clothing market. Secondhand will grow at a CAGR of 11%. New shoppers will account for 65% of incremental secondhand spend.
2. Comparison with Resale and Off-Price: Resale grew 15X faster than the broader retail clothing sector in 2023. It will more than double by 2028, growing 6.4X faster than the broader retail clothing sector and representing a CAGR of 17%. Resale is expected to more than double its market share over the next 10 years, growing at a CAGR of 11% and gaining the largest volume of share of any distribution channel by 2033. Resale will grow 6X faster than off-price by 2033.

C. Online Resale Growth

1. Accelerated Growth in 2023: Online resale saw accelerated growth in 2023, growing at 23% which is 220 bps faster than in 2022.
2. Future Projections: Online resale will account for half of all secondhand spend by 2025. It will more than double in the next 5 years, growing at a CAGR of 17% to reach $40 billion in 2028.

III. Buying and Selling Trends

A. Consumer Buying Habits

1. Secondhand Shopping Frequency: 52% of consumers shopped secondhand apparel in 2023.
2. Proportion of Secondhand in Wardrobe: 2 in 5 apparel items bought in the last 12 months were secondhand.
3. Budget Allocation: On average, consumers spent nearly half of their apparel budget on secondhand in the last 12 months.
4. Online Shopping Preference: 63% of consumers who bought secondhand apparel in 2023 made a purchase online, up 17 pts from 2022. Among Gen Z and Millennials, 71% preferred online shopping. 45% of Gen Z and Millennials prefer to buy secondhand apparel online compared to 38% who prefer brick-and-mortar stores. Of those who prefer to buy secondhand directly from a brand’s website, 20% do so, with 23% preferring social media, 13% peer-to-peer marketplace, 6% having no preference, 18% preferring livestream shopping, and 20% preferring managed marketplace. More than half trust brands more than marketplaces, 44% can more easily compare items side by side, and 41% like a more curated selection from a specific brand.

B. Reasons for Buying Secondhand

1. Value for Money: 60% of consumers say shopping secondhand apparel gives them the most bang for their buck. 41% of consumers say when seeking a deal on apparel, secondhand is the first place they look. Compared to 50% of Gen Z and Millennials.
2. Unique Items: Consumers buy secondhand to find unique items.
3. Afford Higher-End Brands: Consumers buy secondhand to afford higher-end brands.
4. Environmental Sustainability: It’s better for the planet.

C. Consumer Selling Habits

1. Reselling Proportion: 25% of consumers resold apparel in 2023, nearly at parity with 2021 figures when post-pandemic activity was elevated. Compared to 33% of Gen Z and Millennials.
2. Reasons for Reselling

• Make Extra Money: Nearly half used the cash to pay for essentials like food and bills. Gen Z is most likely to put it into savings (41%).
• Clean Out Closet: Consumers resell to clean out their closet.
• Sustainable Disposal: To sustainably get rid of apparel.

IV. Life Cycle of a Thrifter by Generation

A. Gen Z (Ages 18–26)

1. Median Annual Household Income: $52,460.
2. Children: 27% have at least 1 child living at home; 89% of those have at least 1 child under the age of 5.
3. Shopping Habits: 51% prefer to shop secondhand online vs. in a brick-and-mortar store. Their #1 way to shop online is livestream shopping.
4. Why Secondhand: They’re more likely to buy secondhand to better express personal style than any other generation.

B. Millennials (Ages 27–42)

1. Median Annual Household Income: $88,435.
2. Children: 57% have at least 1 child living at home; 51% of those have at least 1 child ages 6–18.
3. Shopping Habits: 55% prefer to shop secondhand online vs. in a brick-and-mortar store. Their #1 online destination is a managed marketplace.
4. Why Secondhand: They’re more likely to buy secondhand to outfit their family than any other generation.

C. Gen X (Ages 43–58)

1. Median Annual Household Income: $101,500.
2. Children: 49% have at least 1 child living at home; 54% of those have at least 1 child ages 13+.
3. Shopping Habits: 69% prefer to buy secondhand in a brick-and-mortar store vs. online.
4. Why Secondhand: They’re more likely to buy secondhand to afford higher-end brands than any other generation.

D. Baby Boomers, Silent (Ages 59+)

1. Median Annual Household Income: $65,770.
2. Children: 93% are empty nesters with no children living at home.
3. Shopping Habits: 82% prefer to buy secondhand in a brick-and-mortar store vs. online.
4. Why Secondhand: They’re more likely to buy secondhand for the thrill of the hunt and to get better deals than any other generation.

V. Branded Resale

A. Growth and Interest

1. Continued Momentum in 2023: Branded resale saw 31% year-over-year growth in 2023.
2. Retailer Interest: 74% of retail executives who don’t currently offer resale are either considering or planning on getting into resale in the future, up 5 pts from 2022. The number of brands launching resale programs has been increasing over the years.

B. Retailer Perspectives and Consumer Interaction

1. Customer Participation: 90% of retail executives say their customers are already participating in resale — an all-time high, up 4 pts from 2022.
2. Customer Sustainability Concern: 62% of retail executives say their customers care about their brand being sustainable.
3. Reasons Consumers Prefer Shopping Secondhand with New: 47% of consumers have traded in apparel with a brand in exchange for shopping credit to that brand. 27% of consumers say they’re more likely to shop with a brand that offers secondhand apparel alongside new apparel. 23% of consumers say they prefer to buy a secondhand item from a brand before committing to purchasing new for the first time. 20% of consumers say they’re more inclined to make a first-time purchase with a brand if they offer shopping credit for trading in used apparel. 18% of consumers say resale value is an important factor in purchasing apparel. Compared to 60% of Gen Z and Millennials, 16% of consumers say they shop secondhand to afford higher-end brands, up 11 pts from 2022. Top reasons include wider variety of price points, wider selection of products, more likely the brand’s products are high-quality, brand cares about the environment, and more likely the brand’s products are durable.

C. Brand Benefits and Challenges

1. Benefits Realized: Brands that offer resale have seen benefits such as advanced sustainability goals (87%, up 5 pts from 2022), generated more revenue (80%, up 7 pts from 2022), and acquired more customers (67%, up 22 pts from 2022). 67% say resale will generate a meaningful (10% of total) revenue stream for the company within 5 years.
2. Challenges: The biggest challenge with resale is getting enough inventory of pre-owned product.

D. Brand Considerations

1. Reasons for Considering Resale: To acquire more customers (89%), generate revenue (85%, up 7 pts from 2022), and advance sustainability goals (77%, up 3 pts from 2022). 69% say they’re considering resale to stay competitive with other brands who offer it.
2. Reasons for Not Being Interested: Resale is too complex (67%), they don’t know where to start (56%), and they have higher priority initiatives demanding resources (56%). Diluting the brand’s product or reputation has become less of a concern, down 10 pts from 2022.

E. Best Brands in Resale and Rising Stars

ThredUp ranked best brands for resale and rising stars based on sell-through and volume of sold items and year-over-year increases in sell-through rates and volume of listed items. Brands like Lululemon Athletica, Patagonia, Vuori, Reformation, etc. are among the top-ranked.

VI. Government’s Role

A. Public Opinion

1. Insufficient Government Action: 65% of retail executives and 43% of consumers say the government is not doing enough to lessen fashion’s environmental impact.
2. Call for Legislative Action: 42% of consumers believe the government should take legislative action to help promote sustainable fashion.
3. Voter Influence: 40% of consumers say they’re more likely to vote for a candidate that supports sustainable fashion. Compared to 52% of Gen Z and Millennials, 44% of consumers say they view circular textile policy as a non-partisan issue.

B. Tax and Incentive Expectations

1. Tax Elimination: 50% of consumers and 59% of Gen Z and Millennials say they’d buy more secondhand apparel if there were no sales tax. 52% of consumers say sales tax on secondhand apparel should be eliminated.
2. Business Incentives: 58% of retail executives say they’d invest in sustainable business or materials innovation if they qualified for government grants. 52% of retail executives say they’d adopt circular business models if there were government-sponsored financial incentives for doing so.

VII. Glossary, Methodology & Sources

A. Glossary

Defines terms like donation & thrift, off-price, other, mid-priced specialty, resale, secondhand, secondhand products, and sustainable fashion.

B. Methodology

1. Report Data Sources: ThredUp’s annual Resale Report contains research and data from GlobalData, which assesses the secondhand market through consumer surveys, retailer tracking, official public data, data sharing, store observation, and secondary sources. GlobalData conducted a December 2023 survey of 3,654 American adults and surveyed the top 50 U.S. fashion retailers and brands in December 2023. The report also leverages data from ThredUp’s Recommerce 100 and internal ThredUp customer and brand performance data.
2. Market Sizing and Survey Details: GlobalData’s market sizing is determined through various inputs used by analysts to model and calculate market sizes, channel sizes, and market shares. The consumer data is from a survey of U.S. adults designed to be representative of age, income, and geography. The fashion retailer survey focused on 50 U.S. fashion retailers’ sustainability and circular fashion goals.

C. Sources

Includes details on how the market data was determined, the consumer survey, the fashion retailer survey, ThredUp’s Recommerce 100, and the United States Census Bureau data used.

VIII. Core Views

The secondhand apparel market, both globally and in the U.S., is growing rapidly and is expected to continue this growth trend in the coming years. Online resale is a significant driver of this growth, revolutionizing the way consumers access and engage with secondhand goods. The convenience and wider reach of online platforms have made it easier for shoppers to find unique and affordable items, fueling the expansion of the market.

Consumers are increasingly turning to secondhand apparel for various reasons, including value, uniqueness, and sustainability. Different generations have different shopping habits and motivations for buying secondhand. Gen Z and Millennials are more inclined towards online shopping and are driven by the desire to express personal style and outfit their families in an affordable yet trendy way. Gen X and Baby Boomers, on the other hand, have their own preferences, with Gen X focusing on accessing higher-end brands and Baby Boomers enjoying the thrill of the hunt and seeking better deals.

Branded resale is growing in importance, with many retailers considering or already involved in it. Brands that offer resale are seeing benefits such as increased revenue and customer acquisition, but also face challenges like inventory management. The growing interest from retailers indicates a recognition of the potential of the secondhand market to enhance brand loyalty and drive business growth. However, ensuring a sufficient supply of pre-owned products remains a hurdle that needs to be overcome.

The government has a role to play in promoting sustainable fashion, and there is public support for government action in the form of legislation and incentives. Consumers and retailers have expectations regarding tax policies and other initiatives to further the growth of the secondhand and sustainable fashion sectors. The call for legislative action to promote sustainable fashion and the demand for tax incentives on secondhand apparel reflect the need for a more structured and supportive environment to drive the industry’s transformation. Additionally, the interest of retail executives in government grants for sustainable business initiatives shows the potential for public-private partnerships to accelerate progress towards a circular fashion economy. Overall, the report emphasizes the multi-faceted nature of the secondhand apparel market and the need for collective efforts to fully realize its potential and address the associated challenges.

IX. Conclusion

The 2024 Resale Report by ThredUp illuminates the substantial growth and transformative potential of the secondhand apparel market. It not only reflects changing consumer behaviors — marked by a shift toward value-conscious and sustainability-driven purchasing — but also underscores the accelerating influence of online resale, expected to be a dominant channel in the coming years.

For brands and retailers, branded resale offers a clear strategic pathway, with the potential to boost revenue, enhance brand loyalty, and fulfill growing consumer demand for sustainable fashion choices. Yet, challenges such as inventory management and efficient logistics will need careful navigation to sustain this growth. Here, the role of government and policy intervention is particularly impactful, as public support for policies that facilitate a circular fashion economy could be pivotal in driving sustainable transformations. Legislative action and incentives could further align business goals with global sustainability targets, benefiting both the environment and the economy.

Overall, the report provides valuable insights for industry players, policymakers, and consumers alike, emphasizing the need to embrace the circular fashion model and prioritize secondhand options to drive positive change in the fashion industry. It serves as a call to action for all stakeholders to contribute to a more sustainable and responsible fashion ecosystem.

Global Implications of the Report

While ThredUp’s report centers on the U.S. secondhand market, its insights have broader significance for secondhand fashion markets worldwide. As the U.S. plays a major role in setting fashion and consumer trends, many patterns observed in this report may resonate within diverse, emerging secondhand markets across the globe. For stakeholders in other countries, this report offers actionable benchmarks and strategies to guide local industry growth, stimulate sustainable practices, and respond to shifting consumer values.

For secondhand fashion brands, one of the clear takeaways is the strategic advantage of establishing online sales channels early. The data underscores the impact of e-commerce on secondhand market expansion — a trend that could likely benefit brands internationally. Setting up dedicated online platforms and robust inventory management systems could drive consumer access and foster local market growth.

Local apparel brands might also explore launching their own resale or trade-in programs, using these programs not only as a sustainable initiative but also as a way to drive customer retention and boost revenue. The report’s data illustrates how branded resale can act as a dual engine, providing both environmental and economic returns — a concept that could be highly beneficial for brands globally as they work to innovate within their own sustainability frameworks.

For policymakers, ThredUp’s findings highlight the importance of policy initiatives that encourage sustainable practices in fashion. Developing proactive policies that support circular economies can pave the way for more regulated, thriving secondhand markets, which not only contribute to GDP growth but also foster environmental benefits. Governments around the world could consider incentives such as tax breaks for resale or grants for businesses that adopt circular models, aiming to drive positive economic and environmental outcomes.

Finally, consumers in various regions can find relevance in this report’s insights by actively supporting brands that prioritize environmental responsibility. Through informed choices, consumers can both influence local market trends and push for favorable policies, fostering a more environmentally conscious consumer ecosystem.

In conclusion, ThredUp’s 2024 Resale Report offers more than just an analysis of past trends; it provides a roadmap that various stakeholders — retailers, policymakers, brands, and consumers — can adapt to help shape a sustainable future in fashion, both in the U.S. and globally. Each sector has a role to play in building a responsible, circular economy that prioritizes the planet, with secondhand apparel serving as a key vehicle for change.

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