The Consumers Behind Fashion’s Growing Secondhand Market

By Sarah Willersdorf, Felix Krüger, Raphael Estripeau, Maelle Gasc, and Charlotte Mardon

Increasingly, consumers are realizing that it is possible to shop affordably and sustainably for exclusive, high-quality, and on-trend items. A new fashion and luxury market is growing fast: secondhand apparel, footwear, and accessories represent $30 billion to $40 billion in value worldwide. And although the number of fashion purchases and the size of

closets have decreased during the pandemic, the share of preowned items in shoppers’ wardrobes will likely continue to rise in the coming years.

A recent BCG survey of 7,000 individuals from six countries—powered by data from Vestiaire Collective’s consumers—has uncovered deeper insights into the trend. It suggests that the global secondhand market will likely grow over the next five years by a compound annual growth rate (CAGR) of 15% to 20%. Developed markets may see even greater gains,

and some online resale players could potentially experience 100% year-on-year growth.

Although affordability, selection availability, and item uniqueness are key drivers of the secondhand market, consumers’ mounting environmental concerns also contribute to its growth. Today, 70% of preowned buyers “like the sustainable aspect” of secondhand consumption, compared with 62% in 2018. Shoppers hope to own fewer, though better items, to

reduce overconsumption, and to take better care of what’s in their closets; the presence of a thriving preowned market encourages all three goals.

We’ve looked beyond general preferences to identify six consumer segments representing the variation in participants’ engagement with the secondhand market, including their motivations, the frequency with which they buy or sell items, and their preferred marketplaces. To better understand the shoppers of today and tomorrow, brands should take stock of these segments and, just as important, recognize how secondhand consumers may evolve—from occasional shoppers of luxury items, for example, to full-fledged brand loyalists. In

the past year, nearly 50% of preowned shoppers tried a new brand. Clearly, preowned consumption is a key driver of customer acquisition.

There are many ways brands can capture value from the growing market. They stand to gain as much as their customers from the new circular economy, but reaping the full benefits requires understanding where the opportunities lie. Brands should explore such options as selling secondhand themselves, developing their own resale platforms, instituting buy-back programs (making it easy for customers to sell their items), and partnering with existing resale platforms to leverage outside expertise. According to the BCG-Vestiaire research, 62%

of consumers would buy more from fashion brands that partner with secondhand players.

The bottom line for brands is that the preowned market is here to stay. To fill their wardrobes in a sustainable way with unique, value-friendly items—consumers are shopping secondhand. They will continue to do so in the years ahead. For those brands that capitalize on this trend, the rewards are numerous.

Learn more about the growing secondhand market—and the wide-ranging motivations of its participants—in the slideshow below.

The Consumers Behind Fashion’s Growing Secondhand Market

BCG powered by Vestiaire Collective

The global apparel, footwear, and personal accessories resale market is already significant and is poised to grow

The apparel, footwear, and accessories resale market represents 2% of the broader fashion and luxury market

The global market has a potential CAGR of 15% to 20% over the next five years

Sources: Euromonitor; BCG analysis.Note: BCG analysis for market sizing took two approaches: evaluation of total market size and calibration through market shares; and evaluation of total population expenditure and decomposition in share ofwallet by channel type. CAGR = compound annual growth rate.

$30 billionto $40 billion

Global resale market

0%

100%

1%Overall F&L CAGR over the past five years

15%–20%CAGR of global resale market in the next five years

~100%CAGR of some online retail players in the next five years

17

5

+1

Consumers are increasingly filling their closets with secondhand items

Secondhand-market penetration is on the rise

Closet share of secondhand fashion could grow from 21% to 27%

% of population that had purchased a secondhand product in the past year

% of wardrobe composition by channel for secondhand customers

Sources: Altagamma research 2020 (left); BCG x VC Resale Survey, mid-May to mid-June 2020 (right). Note: Numbers are from developed markets. Because of rounding, not all figures sum to 100.

20192018

14 12

8

13 13

1311

21 17

2023 (forecasted)

Marketplaces

Secondhand

Online outlets

Outlets offlineOffline multibrand retail

Brand stores online

Online multibrand retail

Brand stores offline14 12

10 8

13 13

1311

21

24 25

27

17

2

4

Brand stores offline

115

3

2020

4

Subscription

Rental

Brand stores online

Trad

itio

nal

10 millionnew shoppers

Source: BCG x VC Resale Survey, mid-May to mid-June 2020.Note: Because of rounding, not all figures sum to 100.

Secondhand consumption is increasingly driven by sustainability and affordability

Strongly agree Slightly disagree Strongly disagree Slightly agree Neither agree nor disagree

34 39

49 46

3 1112

32018 2020

Offer/choiceI am able to find a large selection of items and brands

32 38

41 43

2018

20 5 4 2020

13

Trend anduniquenessI find unique pieces to enhance my style

26

29 34

33 36

7 5 4 21

2018 2020

EnvironmentalconsciousnessI like the sustainable aspect of purchasing secondhand items

5

27 32

45 45

2018

16 135 47 6

2020

Affordability/purchase powerI buy items I can’t afford at full price

% of respondents who identify the following reasons as drivers of their secondhand consumption

24% 22%15% 17% 15% 17%

28% 24%14% 16%

12%

25%

Source: BCG analysis.Note: Because of rounding, not all figures sum to 100.

The secondhand market comprises six very different consumer profiles

Secondhand trialists

<35 years old <35 years old <35 years old35+ years old 35+ years old 35+ years oldDemographic

Consumption

Needs Authentication and experience

Exclusivity and uniqueness

Uniqueness seekers Impulsive sophisticates Trendy millennials Sustainability adepts Amateur merchants

Lowest activity rate inthe secondhand market(mostly first-time users); high spending per occasion because of focus on high-value items

Active on resale platforms in both engagement (follows, likes) and buying, with intention to search for uniqueness

Convenient buyingprocess (impulsive), different brand options for brand loyalists

Active on resale platforms in engagement (follows, likes); buy very frequentlyin search of uniqueness;sell to buy more items,generally secondhand

Ability to follow new trends, social interaction

Very active in social interactions; sell to buy more items (both new and secondhand)

Sustainability and experience

Not very active in selling; do not buy frequently; have low spending per occasion but engage with many platforms

Convenient selling process

Buy very little secondhand but are quite active in selling on a limited number of platforms

BUYERS ONLY SELLERS ONLYBUYERS AND SELLERS

Segment share: By # of people | By secondhand spending By secondhand and firsthand spending

$

17% 17% 12% 13%2%

9%

Source: BCG analysis.

The secondhand market offers multiple opportunities for increased engagement

3

Secondhand trialists alreadycare about sustainability; they can start selling with the intention of becoming more sustainable

Secondhand trialists can start selling to buy more items (often secondhand) to become trendier

Uniqueness seekers canstart selling to buy more itemsand transition into the impulsive sophisticates segment

Amateur merchants can startto use earnings to buy more secondhand items

Entry point Possible transitions

1

2

4

Frequency of buying

Freq

uenc

y of

sel

ling

Secondhandtrialists

Uniquenessseekers

Amateurmerchants

Trendymillennials

Impulsivesophisticates

Sustainabilityadepts

$

32

1

4

Source: BCG x VC Resale Survey, mid-May to mid-June 2020.Note: Averages based on rounded figures.

The pandemic has accelerated consumer trends in sustainability, sales channels, and fashion consumptionResponses to the question: “Once things start to normalize, how do you plan to adapt your behavior toward fashion?”

82

70

59

55

55

62

45

72

47

33

Buy more from socially responsible companies

Reduce the number of items I own/buy

Consume less

Buy more from online secondhand platforms

Make fewer impulse purchases

Buy more online

Limit fashion expenses to save money because of uncertainty

Shift fashion expenses to more purpose-driven categories

83 82 82 80 89 79

71 64 69 58 89 68

62 57 57 47 80 53

54 48 51 49 70 57

50 44 55 51 67 63

64 65 68 63 72 40

44 44 48 46 45 44

72 65 72 68 84 72

47 38 43 44 54 53

33 27 28 30 42 38

% of respondents who rank the following behaviors first or second among planned changes

Sustainabilityhabits

Channelmix

Fashionconsumption

Secondhand trialists

Uniqueness seekers

Impulsive sophisticates

Trendy millennials

Sustainability adepts

Amateur merchants

Buy more quality items to keep for a long time

Adopt a more sustainable behavior

$

Secondhand trialists

Uniqueness seekers

Impulsive sophisticates

Trendy millennials

Sustainability adepts

Amateur merchants

% of respondents who rank the following behaviors first or second among planned changes

$

Source: BCG x VC Resale Survey, mid-May to mid-June 2020Note: Averages based on rounded figures.

A thriving secondhand market drives sustainable consumption

How do you plan to adapt your behavior from a sustainability perspective?85%

70% The Durability Boost

The Upscale Effect

60% The Circular Life Cycle

of preowned buyers participate to reduce overconsumption by trading up fast fashion to fewer, better-quality items

of fashion consumers are encouraged to take greater care of their items thanks to the existence of a liquid secondhand market

of preowned sellers would not have given a second life to their items without the existence of a second-hand market

65

54

68

10

59

66

Buy more secondhand items

Buy less overall

Increase use of fashion rental

Buy more sustainable brands

Buy more items locally

Sell more

68 61 62 52 87 59

59 49 48 46 69 54

70 73 76 68 82 42

11 7 8 10 15

75

9

6358 50 56 54

46 42 76 72 85 78

74Donate/recycle more 9266 7575 68 72

Source: BCG x VC Resale Survey, mid-May to mid-June 2020.148% of secondhand shoppers purchased a preowned item from a newly discovered brand in the past year.

Luxury brands benefit from a healthy secondhand market

62%

48%

31%

Sustainability

Customeracquisition

Customerloyalty

of secondhand shoppers purchased a brand that was new to them; nearly all would consider buying these brands again1

of secondhand sellers bought new high-end goods with the money they made selling preowned goods

• Consumers appreciate purpose-led organizations that care about sustainability• Brands can adopt a comprehensive sustainability approach and account for the full life cycles of products

• Consumers discover brands through secondhand shopping• A preowned market encourages consumers to purchase high-end brands

• Brands can reward sellers with buy-back programs and exclusive loyalty benefits• Sellers can shop for new items with the money they gain from selling old ones

of consumers would be more willing to buy from fashion brands that partner with secondhand players