Everyone in the industry acknowledges that this is a difficult time for the retail sector, following months of store closures, continued customer uncertainty and sales not yet bouncing back to pre-COVID-19 levels. Therefore, many retailers are looking for ways to reinvent themselves and appeal to different consumer demographics.
One example last week came from Selfridges, who are following in the footsteps of other retailers and entering the luxury rental and resale markets. Selfridges is collaborating with HURR, an online fashion rental platform that connects fashion owners with those looking to rent clothing, shoes and accessories, to offer items from over 40 fashion brands for hire.
Selfridges also plans to expand its second-hand clothing offering in the Autumn by selling a selection of vintage clothing and allowing shoppers to trade in their used accessories for store credit. Similar steps have been taken by the likes of Zalando and Macy's and are likely to be adopted by others in the future.
While there remains a general societal focus on the impacts of fast-fashion on the environment, statistics show that millennial and Gen-Z customers in particular are more ethically and financially conscious than previous generations. Therefore, it's no surprise that retailers such as Selfridges, Zalando and Macy's are taking steps to diversify and appeal to new, younger customers. In fact, the luxury second-hand market is estimated to be worth $24 billion and is growing four times faster than the primary luxury market, at 12% per year compared to 3% per year*, so it's a huge opportunity for all retailers - including for online e-commerce platforms such as Depop and ThredUP, which have both secured significant sums in recent funding rounds.
I previously looked at the implications of the luxury resale market (here). However, before entering the luxury fashion rental market, it's important to think about how you will ensure the authenticity of the goods being rented (and returned!) and what happens in the event goods are damaged or stolen. As is often the case, to avoid any potential issues, it's important to conduct thorough due diligence at the outset and have robust contracts in place to cover what happens if anything goes wrong.
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Growing consumer concern over the ecological impact of fast fashion means many retailers are scrambling to tap into surging demand for renting and buying secondhand items. E-commerce sites like Depop and Poshmark Inc. have popularized selling used clothing online. Last year in the U.S., department stores Macy’s and JC Penney signed partnerships with ThredUP Inc., a San Francisco-based resale company.