Why do Fashion Brands Launch In-House Secondhand Programs?

Resale is the fastest-growing fashion sector. Rebag, Depop and The RealReal are all popular online platforms that allow customers to purchase secondhand goods at a lower price. This is both for environmental and financial reasons. It’s not only about the major platforms. To offer customers the chance to buy pre-loved products while they search for something new, brands from COS to Lululemon to Cuyana are increasing their resale programs.

Recurate was established in 2020 and works with brands to integrate secondhand platforms into their own brand. Karin Dillie is the company’s VP of partnerships. Fashion labels are aware of the wider resale marketplace and want to connect with their customers more directly. How can we keep them in our ecosystem and make them feel like part of our brand?

Vanessa Barboni Hallik is the founder and CEO at sustainable apparel brand Another Tomorrow. You can buy a brand new car or a used vehicle from the same location, but the brand will provide authenticity and support no matter where you are. This helps build customer trust and encourages customers to close the loop.

Dillie says that the main reason companies come to Recurate to launch resale platforms is because of sustainability. “They put a stand behind their product. It doesn’t just survive through one person. It can last through many lives,” she said.

Sustainability

Shilpa Shah (co-founder and Chief Experiment Officer at Cuyana), believes that resale has become more popular because of the growing industry recognition that sustainability goes beyond the product’s manufacturing process. In April, Cuyana launched the Revive resale platform. This means that we invest in high-quality materials made responsibly that will extend the product’s lifecycle. We also need platforms that ensure that each piece of furniture has a home through repairs or a second-life programme.

Dillie believes that resale should not be about shifting consumption from new products to old ones, but rather about producing less overall.

Reduce Overproduction

The fashion industry is plagued by difficulties in forecasting demand. Brands will often overproduce products to avoid the risk of not reaching their selling potential. Mara Hoffman, a leading sustainable fashion designer, says that Full Circle, a brand that produces limited production runs, gives them the chance to satisfy customers who are looking for old favorites that are not sold on our site. She also offers a lower price point. Mara Hoffman was the first to introduce resale with third party vendors in 2017, before she launched the brand’s in-house program in 2021.

Dillie says that if you overproduce, you can supplement the[demand with sales. She says that you don’t need to overproduce. This can have an economic advantage for participating brands as they are able maintain full prices and not have to discount products due to surplus stock at the end.

Barboni Hallik confirms that “the overall profitability of the program is really quite high.” It is a complement to the production of new products and a great partner.

Access to Sold-Out Items

Brands have also found a benefit in creating their resale platform. This is because they now have access to a lot of data. Access to data on which products perform well through their resale platforms can not only encourage customer participation, but can also provide valuable insights that could impact future production.

Shah explains that there have been instances when certain colors and styles from the past are selling fast. “We will need to continue learning in order to identify dependable trends that could impact our product development. This platform is unique because it has some highly-in-demand items that are not available in the secondhand market.”

The Brand Identity and Ownership Price

Customers who resell items through multi-brand platforms may not be transparent about pricing. This is something brands strive to fix to satisfy their customers and establish a baseline price for their products.
Barboni Hallik says, “I have had items that I was about to consign and I’d ask you, ‘Where do your thoughts go this item going price-wise?” and you’d reply, ‘Whoa! Whoa!’ It’s important to give the seller transparency so that they understand what they are agreeing to. It’s also important for the brand because you don’t want your products on fire sale.”

This has been a problem for luxury brands. Many have been slow to enter this space out of fear of devaluing products. Dillie says that the complicated logistics of authenticating which technology is being adopted by more companies. Dillie mentions Another Tomorrow’s creation digital IDs. This unique identifier offers information about how the piece was made via QR codes. It is a way for luxury brands to enter the space. She says that resale is less dependent on the details of the stitching in the third pocket, but more about the serial number and how it matches the digital ID. It gives brands more control over their product and allows them to track where it goes.

Motivation is important as market players continue to come on the scene at all price points. Hoffman points out that there has been a significant shift in brands’ desire to engage in more sustainable practices over the past seven-years. “This is exciting, but there is a wide range of interest in sustainability. One being circularity, and another being new revenue streams,” Hoffman notes.

Dillie also agrees that monetization is a key reason brands launch resale programmes. “How can we preserve the value we created by creating a long-lasting products within our brands?” she asks about the mindset.

However, Dillie suggests that resale can not only shift consumption, but also reduce overall production. It seems possible that both consumers and brands could benefit equally from this movement. “Resale” is one way to make more money by producing fewer items.