2024.06.25
Why Thrift is Thriving: Trends and Supply Chain Dynamics in the Second Hand Market
Dive into the dynamic world of second-hand markets and discover how leading fashion and retail brands are navigating this booming industry with innovative supply chain strategies for sustainable success.
Your Second Hand is in Good Hands
Defined by the buying and selling of pre-owned goods, the second-hand market captures a growing range of products that form part of the circular economy, where reduce, reuse and recycle are the key drivers for sustainability. As demand for second hand products skyrockets across a wide range of industries, from fashion to electronics, understanding and adapting to this trend is paramount for businesses seeking success, reinventing themselves or just responding their customers’ demands in this competitive landscape.
Join us in this deep dive as we explore the trends shaping the second hand market and the logistics solutions that drive its success. Together, we can unlock new opportunities and forge a path toward sustainable growth in this burgeoning sector.
Demand explosion for second hand products leads to burgeoning new sector
The growing demand for secondhand products, particularly among Gen Z consumers, two thirds of whom prefer second hand products, is driving unprecedented growth within secondhand and resale in apparel and footwear. This shift in consumer behavior aligns with the principles of the circular economy, fostering a more sustainable approach to retail and e-commerce. As brands demonstrate their commitment to extending the lifetime of their products and adapt to changing market dynamics, they are increasingly investing in secondhand apps and software to capitalize on the growing demand for pre-owned goods and enabling their customers to trade-in pre-owned goods for resale.
With an estimated value ranging between $100 to $120 billion worldwide, the apparel, footwear, and accessories resale market has nearly tripled since 2020, driven by various factors including affordability, sustainability, and the allure of product variety. Notably, sustainability has emerged as a prominent motivator among consumers for purchasing second hand clothing and the opportunity to engage a broad range of brands from fast fashion to luxury.
Historically second hand products were a consumer to consumer transaction with brands having limited to no engagement. More recently brands have reported success in selling secondhand collections both online and in-store, leveraging their existing capabilities to retain control over their brand image and extend their relationship with their customers.
Unsurprisingly, we are witnessing the emergence of specialized “recommerce” IT solutions which focus on helping brands implement their secondhand and resale channels including on-line and in-store programs. These solutions are known as “resale as a service (RaaS) and offer tools from creating the on-line resales sales channel, discount-and-incentive schemes for customers who sell their secondhand clothing back, and linkages to logistics providers to receive and fulfill secondhand product orders.
However, for truly successful execution in the secondhand space, brands need to adopt an agile and proactive approach to managing logistics, particularly in light of rising inflation and delivery costs.
Mastering Logistics & Traceability to navigate the Potential Goldmine of the Second Hand Economy
The second-hand economy presents both opportunities and pitfalls for businesses aiming to capitalize on this burgeoning market. Consumers trust brands especially in authenticating pre-owned luxury goods. However, the processes and management knowledge for managing the inbound flow of resale products to process, efficient evaluation and inspection processes to determine whether to resale, recycle, donate, or dispose a product all require expertise and effective solutions. Additionally, reorganizing platforms from traditional returns processes to include resale of pre-owned items or unsold, new products from both the store and ecommerce channels necessitates planning to optimize inventory management, minimize waste and time, and maintain margins.
Traceability and safety measures are equally important, especially in light of increasing consumer concerns over product authenticity and quality. Furthermore, considerations for low-emission transport and deploying less packaging and more sustainable packaging underscore the industry's commitment to sustainability. The right solution and offer for secondhand and resale also contribute to environmental conservation efforts.
Seizing the opportunities inherent in the second-hand market with a trusted partner
GEODIS stands out among competitors in enabling companies to harness the power of the secondhand market with its unique toolbox of solutions and expertise. Through ongoing research and constant innovation, GEODIS offers cutting-edge tracking and assessment tools to ensure the seamless handling of goods, catering to the diverse needs of brands across varying maturity levels in secondhand logistics.
“The Secondhand market creates opportunities and risks for apparel brands and retailers,” says Phil Corwin, Head of Marketing and Strategy for GEODIS Contract Logistics. “The requirements and investments to offer a successful secondhand sales channel are not fully mature yet. That is where a flexible and agile logistics company such as GEODIS can be a powerful partner for brands and retailers looking to launch or leverage the investments they have already made.”
By addressing pain points in the secondhand process and delivering forward-thinking solutions, GEODIS works with its customer to capitalize on the opportunities presented by the thriving secondhand economy while mitigating challenges and driving sustainable growth.
In conclusion, the question is not should we enter the second hand market, but how. Given consumer expectations and demand, the second hand market is a strategic imperative for apparel and luxury brands. As brands embark on this transformative journey, GEODIS extends an invitation for co-creation and innovation in shaping bespoke secondhand reselling models. GEODIS is committed to empowering businesses to seize the opportunities presented by the secondhand economy while staying true to their brand, core values and objectives. Together, through strategic partnerships and innovative solutions, we can unlock the full potential of the secondhand market, paving the way towards sustainable growth.
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Phillip Corwin
Head of Strategy, Global Contract Logistics
