Circular Apparel Market Projected to Reach $77B by 2026

thredUp — a leading online resale platform for women’s and kids’ apparel, shoes and accessories — has released its 2021 Resale Report, a comprehensive study of the US secondhand market. The ninth annual study, which surveyed 3,500 consumers, estimates that the secondhand market is projected to double in the next five years to $77 billion.

This year’s study reveals new insights on tailwinds propelling resale in the pandemic recovery and the need for government action in accelerating the adoption of circular fashion. For the first time, the report also includes an Impact Section, highlighting the company’s progress towards its mission to inspire a new generation of consumers to make the ‘shift to thrift’: By extending the life of millions of used garments, thredUP is helping to offset the environmental and financial costs of fashion — to date, the platform has processed more than 125 million secondhand items, displaced 1 billion pounds of carbon emissions and saved consumers $3.9 billion off estimated retail prices.

As thredUP co-founder and CEO James Reinhart says in the report:

“We are in the early stages of a radical transformation in retail. Consumers are prioritizing sustainability, retailers are starting to embrace resale, and policymakers are getting on board with the circular economy,” say. Pollutive industries have the power to transform when technological innovation collides with the motivations of consumers, businesses and government. We’ve seen it with electric cars and solar energy, and we believe circular fashion is next. With this year’s Resale Report, we hope to shine a light on the positive power of resale and create a catalyst for further collaboration and action across the industry.”

Notable findings

The resale sector grew during the pandemic and is projected to accelerate during recovery and beyond.

• Secondhand is now a $36 billion market, projected to double in the next 5 years to $77 billion.

• Resale is expected to grow 11 times faster than retail clothing over the next 5 years.
• In 2020, 33 million consumers bought secondhand apparel for the first time; and 76 percent of those first-time buyers plan to increase their spend on secondhand in the next 5 years.

Resale is an emerging growth channel for apparel retailers.

• 62 percent of retail execs say their customers are already participating in resale, and 42 percent of retail executives say resale will be an important part of their business in the next 5 years.

• 1 in 3 execs say resale is becoming table stakes for retailers.
• 43 percent of consumers say they are more likely to shop with a brand that lets them trade in old clothes for brand credit; and 34 percent say they are more likely to shop with a brand that offers secondhand clothing alongside new.

Secondhand is displacing fast fashion, new clothing purchases, and harmful production as consumers shift to thrift.

• Resale is expected to be more than 2x bigger than fast fashion by 2030, with 2 in 5 thrifters saying they’re replacing fast fashion purchases with secondhand clothing.
• The average thrifter bought ~7 items secondhand in the past year that they would normally buy new, displacing more than 542 million new items of apparel.
• In the past decade: 6.65 billion items of apparel have been recirculated via the secondhand market. Consumers have saved $390 billion by buying secondhand. 116 billion pounds of CO2e have been displaced by buying used instead of new apparel.

Consumers’ values have changed since COVID, driving new demand for secondhand.

• 1 in 3 consumers care more about wearing sustainable apparel than pre-pandemic.
• 60 percent of consumers are more opposed to wasting money, while 51 percent are more opposed to environmental waste.
• 1 in 2 consumers care more about seeking value.

“As we emerge from the pandemic, the resale market is stronger than ever. Consumers are refreshing their closets and turning to resale as a way to sustainably discard garments and acquire new ones,” says Neil Saunders, Managing Director of GlobalData, which conducted the study. “Retailers recognize this shift, which is why so many of them are now looking to get into resale. These trends will make resale the most dynamic and fast-paced part of the apparel market over the next decade.”

These findings build on trends uncovered in GlobeScan’s 2020 Healthy and Sustainable Living Study, which found a definite uptick in consumer desire for more durable and secondhand goods that will help them lower their personal impacts — but there’s a clear need for brands to help them make the shift. As GlobeScan CEO Chris Coulter pointed out:

“Brands must make it easy and affordable. Price is a real barrier for much of the world on anything sustainable. They also have to make it cool. … But what’s most exciting is that younger consumers — Gen Z — do see consumption differently, and are open to more radical approaches to consumption based on circular principles.”

This demand from Gen Z is one thing fueling retailers’ embrace of resale and takeback programs: Patagonia has long been a leader in encouraging more circular consumption, urging customers not to buy anything from its stores if they don’t really need it; and launching Worn Wear — its repairs, returns and resale platform — in 2013. In recent years, companies including Levi’s, The North Face, Arc’teryx, REI, Eileen Fisher, COS and others have followed suit with repair-and-resell schemes of their own — joining the ranks of UK and European companies such as Barbour, Mud Jeans, Hiut Denim and Nudie Jeans. And recently, Rent the Runway joined thredUP as a fully fledged resale site, increasing thrifters’ access to previously hard-to-find, secondhand luxury items.

Consumers and retailers want the government to step in to incentivize resale.

• 58 percent of retail executives say they’d be more likely to test apparel resale if there were financial incentives for doing so.
• 44 percent of consumers think the government should help promote sustainable fashion. 47 percent say they’d be more inclined to purchase secondhand clothing if there was no sales tax or they received a tax credit.

The US would do well to follow the UK’s example in this area: In 2019, the Environmental Audit Committee called on the UK government to make fashion brands take responsibility for the waste they create — suggesting, among other measures, a £1p extended producer responsibility (EPR) charge on each item of clothing produced that could pay for better clothing collection and recycling. While the plan stalled during COVID, consultations on the EPR strategy — which could see companies across the value chain, including manufacturers and retail, contributing to the cost of recycling — are moving forward.