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Image Source: thredUP

The Sustained Renaissance in Resale: ZARA and SHEIN Make Secondhand Marketplace Plays

At McMillanDoolittle, we’ve been watching the resale market for decades now – from the rise of online marketplace giant eBay to the growth of technical recommerce specialists like The Pro’s Closet, Chrono24, and KEH. The global resale market has been thriving – a renaissance accelerated by pandemic conditions, such as a growing consumer focus on value, increased attention toward sustainability issues, disruptions in new product supply, store closures and a spike in popularity of closet clear-outs.

This week we comment on recent developments in the burgeoning fashion resale market following entries into the category by fast fashion giants ZARA (Spain) and SHEIN (China).  SHEIN Exchange and ZARA Pre-loved are both seamless marketplace solutions designed to serve their customers in selling and shopping for preowned products. Will these new channels improve their image with sustainability-minded Millennials and Gen Z? Read on for our take on some of the latest offerings in resale from fast fashion to premium.

Shein mobile app

Image Source: SHEIN

  • SHEIN Launches First Test of Peer-to-Peer Marketplace in the US. SHEIN, the Chinese fast fashion behemoth we’ve discussed previously just launched their US peer-to-peer resale platform, SHEIN Exchange. The platform is currently available to all US customers through the mobile app with plans to expand globally in the next year. Unlike thredUP (but similar to eBay, Poshmark, or Mercari), SHEIN tasks sellers with shipping logistics for each item they sell. SHEIN also sets a maximum price for sellers to list their items, with SHEIN taking 5% of all resale proceeds generated on the platform. This move enables SHEIN to profit off the extended life of its garments, which are often criticized for being built to be disposable after a single use. Will this program win hearts for increasing the product lifecycle from Gen Z brand enthusiasts? Time will tell if the brand’s reputation will benefit from this as a sustainable initiative, but it will no doubt generate interest from cost-conscious customers selling their limited use items and shopping gently used at even more accessible price points the brand is known for.
  • ZARA’s Resale Platform to Launch in Early November in the UK. Announced today, Zara has become the newest fast fashion brand to join the rapidly growing resale market. On November 3rd, Zara is expected to launch “Zara Pre-Owned” for UK customers. Customers will be able to repair, donate (online or in-store), and sell their Zara products online through the new peer-to-peer marketplace. The platform will be integrated across Zara’s stores, Zara’s website and its app. With a business model built on limited inventory and frequent sell-outs of viral products and collections, we expect ZARA Pre-loved to be a hit with brand fans looking for sold out items.
Michael Kors handbag

Image Source: Michael Kors

    • Sandro Launches First US Resale Offering. Launched earlier this month, premium fashion retailer Sandro (France) launched a US resale marketplace in partnership with Archive. Sandro’s existing latest move marks the expansion of the resale channel into the US market. Sellers can choose between a cash reimbursement or credit towards their next Sandro purchase – fueling increased sales directly with past customers who have a new financial incentive to buy and indirectly to potentially new customers to the brand participating only in the more value-driven resale channel for the premium fashion brand.
    • Michael Kors Pre-loved Fuels Loyalty Program Engagement. In late August, Michael Kors launched its new resale marketplace, Michael Kors Pre-Loved. In order to sell products on the platform, customers must first be signed up as a KORSVIP rewards member and create a Michael Kors Pre-Loved account. Customers can then select items from their order history, list them with a click of a button, and receive a prepaid USPS shipping label. Customers sales of their Michael Kors items can also be redeemed for a Michael Kors gift card – encouraging loyalty and helping to shift the customer mindset toward the initial purchase price by factoring in the “money back” they will receive through a seamless selling experience.

  • PLT Creates Community through their Brand-Agnostic Marketplace. This past May, UK-based fast fashion company PrettyLittleThing launched an app-based resale marketplace called PLT Marketplace. Customers can login to their account on the app which will give them access to previous PLT orders which can then be quickly uploaded to their resale “boutique.” Of note, customers can also sell items from other brands on the PLT marketplace with similar ease. They promote 0% selling fees for the first 3 months to encourage sign-ups (and defection from other platforms that take a bigger cut of seller revenues). PLT’s decision to invite other brands into its platform is not only customer-friendly but may offer a way to gain more control of the resale market.
  • Lululemon Like New Allows Customers to Sell Clothes In-Store for an E-Gift Card. Lululemon launched their Like New resale program for all US customers on Earth Day, April 2022. It was initially piloted in several stores in Texas and California and proved to be successful, with Lululemon noting that the pilot was met with an overwhelmingly positive response, and most clothes sold were as “good as new,” living up to Lululemon’s promise of quality and durability. The retailer offers a flat rate to be immediately redeemed on an e-gift card, depending on the type of item. Any profits go back into Lululemon’s sustainability initiative, which include circular product design and other recycling programs.

McMillanDoolittle Take

The resale market bandwagon continues to gain steam, with proof of consumer demand evidenced in growing secondhand market interest and the attractive, downstream revenues that brands increasingly want to control. While some retailers are making positive strides with environmentally conscious resale programs, such as Lululemon’s Like New and Patagonia’s Worn Wear, others offered by fast fashion players offer customers even greater value (however, they may risk criticism for greenwashing if these programs are marketed primarily for their sustainability impacts). Successful resale retailing will prioritize a seamless seller experience, increase customer lifetime value, and ultimately help shape new consumer mindsets around product ownership.

To learn more about our work in the resale market or to discuss your company’s channel strategy, contact us for a complimentary consultation. You can also follow along with us on our blog and our Instagram feed and stories for more news on retail developments that inspire us.

Lucy Everett

Lucy provides research, planning and analysis support for McMillanDoolittle retail consulting projects. She also assists with consumer research planning, preparing presentations, and project administration.

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