Why Kids’ Clothing Is the Next Frontier for Resale Giants ThredUp and The RealReal

With the growing popularity of online resale marketplaces, secondhand may prove to be the sleeper of the retail industry. Women shoppers are driving the category’s explosive growth, but a new opportunity is beginning to take shape with children’s apparel.

The most prominent players in online resale have taken note of the blossoming interest in selling and buying used kids’ clothing. It’s a natural fit, they say, because youngsters represent a group of fast-growing, relentlessly needy consumers who cycle through garments at a more rapid rate than even the most avid fashionistas.

Popular San Francisco-based resale website ThredUp actually launched in 2009 as a kids’ clothing-swap service, debuting with the tagline, “Clothes Don’t Grow. Kids Do.”

“Because utilizing hand-me-downs was already a natural behavior for moms, there was very little stigma — if any — attached to secondhand kids’ clothes,” said Samantha Blumenthal, a company spokesperson.

The platform provided a space where families could access “high-quality secondhand clothing across a breadth of brands,” allowing them to “refresh their children’s wardrobes responsibly and conveniently,” she added.

After four years, the company launched its women’s category, which “rapidly surpassed the children’s business as a much larger addressable market,” Blumenthal said. Some moms who originally came to the site to shop for their tots ended up becoming devotees themselves.

Today, women’s apparel represents the majority of the company’s business in terms of volume, but the growth rates between the women’s and children’s categories are growing proportionally — and significantly — year over year.

That trend is poised to continue across the secondhand market as a whole, according to ThredUp’s 2019 Resale Report. The company’s research indicated that “the closet of the future” will be made up of pieces sourced from many different models — from online resale and brick-and-mortar consignment to subscription and rental services.

Consumers are increasingly seeking options that offer “variety, value and sustainability,” Blumenthal said by way of explanation. Younger generations are quickly adapting to new these new business models and are invested in perpetuating a circular economy.

These shifting consumer attitudes are reshaping the future of retail, and it’s happening quickly. ThredUp’s report asserted that secondhand apparel is on track to make up one third of every closet by 2033 and is predicted to surpass fast fashion in the next decade.

“With Generation Z and millennials leading the charge, adopting secondhand two and a half times faster than other generations, it’s likely that as these younger, more eco-conscious generations begin to have children of their own, they will continue to choose used [goods] for their families,” Blumenthal said.

Since launching its children’s business in 2016 and after heeding requests from its consignors, luxury resale website The RealReal has reported substantial growth in the resale of kids’ premium apparel.

Sasha Skoda, the company’s women’s and kids’ category director, said that the opportunity to sell and purchase children’s apparel was at “the top of consignors’ wish lists” and that the category now represents one of the fastest-growing at The RealReal. Searches on the platform for children’s clothing and accessories have doubled year over year from 2018.

“Children’s resale is a no-brainer for our consignors — kids grow out of items quickly and unless you have other friends or family to pass them on to, there’s nowhere else for these pieces of clothing to go,” Skoda explained.

“Consignment just makes so much sense here,” she added.

The RealReal specializes in premium and designer clothing and has become a haven for savvy shoppers looking for unique specialty items at a fraction of their original price. Despite the company’s exclusive reputation, Skoda insisted that parents love the affordable pricing, paired with the high quality of items offered.

“One of the best aspects of shopping on The RealReal is that we carry such a wide range of designers and price points for luxury kid’s wear,” she said. While shoppers can find designer items from brands like Gucci and Stella McCartney for special occasions, they can also browse everyday pieces from brands like Bonpoint and Bobo Choses.

“Overall, we’ve received really positive feedback from parents shopping for their kids,” she said.

While experts agree that women’s apparel reigns supreme in the world of secondhand, Edited analyst Katherine Bailey said that children’s resale is making substantial headway.

The model lends itself well to the children’s market, where a garment’s longevity is severely limited by its wearer’s rapid growth. Once a kid outgrows a product, it’s unusable, she explained. Unless, of course, it can find its way into the arms of another grateful parent.

In addition to the resale sector’s key players, Bailey called out new startup Kidizen as a potential contender for children’s resale market share. The app promotes itself as a “community-centric marketplace and a safe venue for parents to shop and resell.”

The atmosphere created by these platforms is what gets parents hooked, Bailey said, as they are eager to connect and share products and information. Resale companies now have the opportunity to take on the role of educating families and encouraging awareness about “sustainability issues” and “personal consumption habits,” she said.

Millennials, in large part, make up the incoming class of young and first-time parents. This demographic’s affinity for conscious and cost-saving solutions — along with shopping online — offers near guarantees of a home run for online secondhand sales.

“The importance of the resale market will continue to increase as consumers become more aware of the impact their apparel causes to the environment,” Bailey said, adding that newfound awareness will provide the children’s resale category with “ample opportunity for growth.”

Editor’s Note: This story was reported by FN sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.

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