How Brands Can Cash In on the Booming Secondhand Market

The secondhand apparel market is exploding and it is projected to grow seven times faster than traditional retail in the next five years. It is driven by savvy consumers who are shifting toward more sustainable and cost-conscious shopping opportunities. This is opening doors for brands to tap into the resale market.

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But how can retailers and brands navigate this complex landscape without cannibalizing their full-price sales? In this interview, Emily Gittins, cofounder and CEO of Archive, a leading resale solution provider, sheds light on the industry’s key trends and how her company empowers brands to thrive in the resale revolution.

WWD: What trends are you seeing in the resale market, and how is Archive adapting?

Emily Gittins: We have seen a fundamental shift in the market. In 2021, only 30 brands had jumped into resale. Now, hundreds of brands have launched and scaled resale as part of their core business. Every executive in fashion has resale on their radar. The secondhand apparel market is projected to grow seven times faster than the general apparel market over the next five years, and this velocity is increasing at a rate even we didn’t expect.

One driver of this shift is a change in consumer shopping behaviors. Consumers spent nearly half their apparel budget on secondhand items in the past year. And while this trend is largely propelled by Gen Z, consumers of all demographics are shopping secondhand . Whether driven by lower costs, environmental reasons, or the thrill of thrifting, there is a growing consumer preference for shopping secondhand.

At Archive, we are partnering with brands to launch and scale profitable circular businesses and to capitalize on this consumer demand. Our technology is optimized for the best user experiences and most efficient backend operations.

WWD: How does Archive’s platform help brands build customer loyalty and drive new customer acquisition?

E.G.: We now power resale businesses for more than 50 brands globally, and we are seeing strong metrics for customer acquisition and loyalty. On average, 50 percent of resale customers are new to the brand, and customers that engage with a brand’s resale program have two to three times the LTV of customers that just shop at full price. Brands that offer a peer-to-peer model find that more than 60 percent of sellers opt for brand credit versus cash and go on to spend three times that amount with the brand.

While many brands fear cannibalization, we haven’t seen any evidence of this with our partners. By creating unique and engaging shopping experiences for consumers that are on par with the high-quality experience of a brand’s mainline site, brands are instead taking market share from third-party resale marketplaces where customers are already buying and selling their items.

WWD: How does Archive address the operational complexities involved in managing a global resale business?

E.G.: Running a resale business is fundamentally different from traditional, linear commerce. Every [stock keeping unit] is unique, the optimal price is determined by a variety of factors, and some may require various operational needs like cleaning, repair, photography, etc. Not to mention that supply is unpredictable, so existing systems for inventory management and merchandising can’t be used. And of course, resale requires different user experiences, with unique feature needs like product identification, pricing tools and payouts.

Archive’s technology was built specifically for resale, with these nuanced parameters in mind. We built our inventory processing system to maximize the margin for our brand partners and we’re seeing some exciting results. Many of our brand partners find that their resale business is as profitable, if not more profitable, than their core business.

Our resale intelligence is designed to drive scale, conversion and optimal engagement, allowing brands to scale their resale operations smoothly as they grow.

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WWD: Can you describe how the Archive platform works?

E.G.: Archive makes it as easy as possible for brands to launch a resale program by handling all technology development, creative design, payments, operations and logistics, analytics and customer service needs that are required to build an entirely new business model. Our technology was built to integrate with any existing systems, including gift card providers, ERPs and loyalty programs. We also ingest product catalog data in any format, so that brand photography and item descriptions auto-populate on product detail pages.

We partner and integrate with 3PLs and circularity services to ensure the most efficient operations. By making this completely turnkey and resource-light for brands, Archive allows brands to grow revenue and acquire new customers without increasing production.

WWD: What was the impetus behind launching the partnership with New Balance?

E.G.: The partnership with New Balance was driven by a shared commitment to innovation and meeting the customer with their evolving needs. Both New Balance and Archive recognize the importance of extending the lifecycle of products and reducing environmental impact. By launching this partnership, we aim to offer New Balance customers an exciting and sustainable way to engage with the brand, while also tapping into the growing resale market and a new customer base.

WWD: How does the program work?

E.G.: Through the New Balance website, consumers can now view and shop for pre-owned shoes — including consumer returns and cosmetically imperfect footwear that cannot be sold as new — that have been inspected and cleaned as needed. The program also allows customers to trade in their gently worn New Balance shoes via mail or in-store drop-off and receive a voucher on eligible trade-ins to use toward their next New Balance purchase online at NewBalance.com.

WWD: How would you describe the value proposition and benefits of the program for consumers?

E.G.: First, the consumer shopping experience is virtually identical to how they shop a brand full price, giving them the confidence to purchase and know exactly what they’re getting. For some customers, the affordability and sustainability of shopping secondhand is the main value, particularly given the high quality of products on the site. All items are thoroughly inspected and cleaned if needed. For existing customers, having a trusted and accessible outlet by which to responsibly move on from their footwear is another key aspect of the program.

How would you describe the value proposition for brands who are re-selling owned inventory?

E.G.: Every brand we speak to is sitting on some amount of inventory that can’t be sold as new for a variety of reasons, and resale presents an opportunity to sell those items in a way that maximizes margin and feels on-brand. Much of this inventory is damaged returns; with a minimal investment in refurbishment, the brand can still make money off of that item and ensure it doesn’t end up in a landfill.

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