Second coming

While the concept of buying second-hand is not new, it is seeing a renewed surge in interest under the label of 'pre-loved'.

With the second-hand/pre-loved market speaking clearly to key consumer trends including authenticity and sustainability, there is strong potential for growth.

In this article we examine which product categories are most popular, which customers are driving this change, where they are shopping and what the impact could be on the future of physical retail.

Product categories
Undoubtably, fashion is the most popular second-hand market. A 2020 Statista survey showed that 35% of people have bought second-hand clothing and footwear in the UK in the last 12 months; followed by 21% buying books, movies, music and games; while 10% bought second-hand furniture and household goods.

The second-hand market, clothing and footwear, splits into two groups: traditional second-hand items, and curated 'vintage' items. By curating the offer to be fashion forward, brands such as ASOS have developed a new market which steps away from the traditional charity shop model. Items such as leather jackets and good quality wool knitwear are by seen by consumers as timeless, and therefore a good investment, not only for the fashion creds, but for longevity. The success of this strategy is clear; vintage sales at ASOS have risen by 92%.

Demographic
The growth in popularity of pre-loved clothing can be attributed to three drivers: bargain hunting, fashion, and sustainability. A desire to discover a bargain has long inspired a range of shoppers and formats – whilst clearly a 'first-hand' offer, TK Maxx's proposition has successfully appealed to shoppers' joy of 'the hunt' – and is likely to continue to do so over time.

Fashion is famously cyclical but advancements in technology make both buying and selling pre-loved items more efficient now than ever before. Fashion-forward young people have driven the recent growth in popularity using apps such as Vinted and Depop but customers up to 30 are now an increasing market, looking to discover second-hand bargains.

An increased awareness of the social and environmental impact of production and consumption, notably fast-fashion, is further driving the interest of consumers, particularly the young. As sustainability is increasingly a consideration in consumer’s daily lives, it is likely to ensure the longevity of the pre-loved market, creating an opportunity to evolve into the future as younger consumers age and technology continues to develop.

Channel
The resale sector can be split into three channels: traditional charity shops, online specialist platforms (such Vestiaire Collective, ThredUp and eBay) and mainstream brands offering a second-hand proposition (such as Ikea, Levi’s and H&M). 

Brands such as Ikea and H&M have made small in-ways to second-hand retail in physical stores. Ikea opened a pop-up store in Sweden stocking reused or recycled items, while H&M offer a recycling system in the basement of their store in Sweden that shreds old garments to make new ones.

While these are interesting steps to developing the in-store second-hand proposition, they are on a small scale geographically, and as a result cater to a niche audience. In contrast, a recent announcement from Asda indicates a step towards the mainstream. The introduction of second-hand clothing into 50 UK stores, following a successful trial at their sustainability store in Middleton, will be a key test of wider consumer appetite and the suitability of supermarkets as a channel.

The future
Asda's typical shopper profile steps away from the trend driven second-hand market and towards more cost-conscious bargain hunters. The success of this trial may determine the long-term opportunity for the pre-loved sector, as it will dictate the mass market appeal and the feasibility of a greater physical presence. To ensure the success of this trial, it will be important for Asda to curate the offer where possible, stepping away from the traditional charity shop model, towards a more well-rounded proposition.

Following on from the trials in place for pre-loved stores, there may be an opportunity for future vintage and pre-loved stores to move away from high footfall city centre locations to regional shopping centres. Many of these centres are re-evaluating the use of space in the face of rising vacancy rates, which may provide an opportunity for clusters of sustainability focussed units. By grouping second-hand stores with other concepts that mirror consumers' desires, such as grocery refill stations and organic cafes, centres can be aligned with global trends while creating a hub which can drive footfall into schemes.

Tish Hewitt