The fashion industry’s business model is one based upon planned obsolescence. Each season thousands of fashion brands introduce whole new collections, and major shifts in fashion trends come along predictably every five to seven years, all intended to stimulate a slew of new fashion purchases.

But people and the planet pay a heavy price for indulging in the fashion industry’s obsolescence plan. According to McKinsey, the fashion industry produced enough clothing in 2014 to provide nearly 14 individual items for every living person in the world, and it’s undoubtedly increased since then.

In constantly pumping out a steady stream of new products, the industry produces about 10% of global greenhouse gas emissions, uses more energy than the aviation and shipping industries combined and throws off 20% of global wastewater, all while being the second most water-intensive industry in the world.

As the industry works overtime to clean up its act, fashion’s underlying obsolescence business model goes unchanged. But it is not sustainable as consumers become increasingly aware of its price. They are starting to break the vicious cycle of consumption the fashion industry is founded upon that’s expensive for them and destructive to the environment.

Into the breach, ThredUp offers fashion brands an alternative to get on the right side of the environment and feed consumers’ desire for something new to wear; only ThredUp’s new is something old from another consumer’s closet.

Called Resale-as-a-Service (Raas), ThredUp allows fashion brands and retailers to expand their business model to sell new and gently used items to serve the growing legion of conscientious consumers who want to save money and play a part in helping the environment. ThredUp calls these customers “thrifters.”

Thrifting lifestyle

Unlike thrifters of old who were forced to live frugally, the modern generation of thrifters, though still interested in saving money, are increasingly motivated to change their shopping habits to make a real difference in the world.

“When we debated using the term ‘thrifter’ in our communications, we wondered if it would equate with things being cheap or low-quality,” explained Anthony Marino, president of ThredUp. “But we discovered it was a term evocative of an aspirational lifestyle and became an asset for us to connect with shoppers concerned with lasting value, sustainability and a new way to shop.”

Also driving the thrifting lifestyle is that thrifters get a psychological reward for their new shopping habit. “Thrifting is like a sport. It takes some work to look through a lot of things, but thrifters get an endorphin rush when they find that Diane von Furstenberg wrap dress for $39 instead of $139. Today it’s become a badge of honor to thrift, rather than a stigma.”

That’s why 72% of consumers who think of themselves as thrifters are proud to share their secondhand finds with others, according to a survey conducted by GlobalData among 3,500 American adults and published in ThredUp’s tenth edition of its “Resale Report 2022.”

Thredup estimates that more than half of U.S. consumers either are or have the potential to become thrifters. Some 57% of consumers resold apparel in 2021 and more than half (53%) reported purchasing secondhand in the last year, up 22 points from 2020.

Thrifting’s become such a thing that 41% of those who describe themselves as thrifters shop secondhand first, and they are passionate about it. Nearly half of consumers who bought secondhand clothing in 2021 bought ten or more used items.

Profiting through resale

As the thrifting lifestyle grows, fashion brands’ livelihood is threatened, particularly in the North American market, where the secondhand clothing market is expected to grow 16 times faster than the firsthand fashion market by 2026. That’s where ThredUp and its RaaS service can help brands bridge the gap.

“Brands and retailers are beginning to recognize the next wave of growth in fashion is resale,” Marino shared. “Nearly 80% of the fashion and retail brand executives surveyed said their customers were already buying used. They are now being forced to ask ‘What’s our resale strategy?’”

To date, ThredUp estimates there are currently 85 brands and retailers that have resale a product offering, growing from only 38 in 2021. And these are big brands with a loyal customer base that counts on these brands to be responsible to them and the environment, including Eileen Fisher, Lululemon, REI, Patagonia, Levi’s and Madewell.

Recognizing that resale is a growth opportunity for established brands, but one that requires a whole new set of capabilities which ThredUp has mastered, it is offering brands two ways to get on the resale bandwagon – a Take Back Program, where brands can provide closet Clean Out Kits to customers to turn their used clothing and accessories from any brand into credit for their brand, and a Branded Online Resale Shop to add resale to a brand’s own e-commerce site. 

Currently, Walmart, Target, Reformation, Crocs, Farfetch, Gap, Banana Republic, Athleta, Fabletics, M.M. La Fleur among others participate with ThredUp.

Fashion brands that offer resale send a powerful, reinforcing message to customers that the quality of their products is exceptionally high, which fuels growth for the brand in both the primary and secondary markets.

We’ve long known luxury brands partly justify their high prices because their products retain value over time. For next-generation Gen Z and Millennial consumers, value retention is becoming a consideration not just for luxury, but any fashion purchase, with 46% saying resale value has now become part of their fashion-buying equation.

“Consumers are always looking for smarter alternatives,” Marino said. “There’s something inherently smart about thrifting. It’s a guiltless pleasure, not a destructive form of consumerism, but a mindful way to consume.”

And he continued, “It’s really smart for fashion brands to get ahead of the resale trends. They are at a fork in the road. They can either put their head in the sand or get started and learn. Retailers that get into resale will have a distinct advantage and increased wallet share by combining new items with used clothing in the same experience.“

And ultimately, fashion brands that incorporate resale into their existing business model can buy some time to re-engineer their current manufacturing processes, which Kearney reports isn’t doing so well.

In Kearney’s latest Circular Fashion Index 2022 report, the industry index average only rose from 1.6 two years ago to 2.97 out of ten in its measure of fashion brands’ efforts to extend the lifecycle of their clothing and reduce their environmental impact.

“I think the best piece of clothing is the one that already exists,” said Theanne Schiros, assistant professor at the Fashion Institute of Technology and principal investigator at Columbia University’s Materials Research Science and Engineering Center. “The best fabric is the fabric that already exists. Keeping things in the supply chain in as many loops and cycles as you can is really, really important.”

ThredUp heartedly agrees and gives brands a new loop in the fashion supply-chain cycle.