Charity Retail future Second-hand clothing insight
With second-hand clothing as the key category within charity retail shops, more are now being sold online. Recently there has been research which indicates that this key category is about to see considerable growth.
There are a range of different predictions about the second-hand or resale clothing market, based upon the U.S market, which is predicted to grow considerably. To draw conclusions on what is predicted for the U.K. second-hand clothing market and if the U.K. market will be the same, it is very useful to compare second-hand or resale clothing markets in the U.S. and U.K.
The U.S. Market Reports commissioned by Thredup
The thredup report predicts that the second-hand U.S. clothes market will triple in value from U.S$28 billion in 2019, to U.S$80 billion in 2029. To put this in context the total U.S. clothing market now is worth approximately $379 billion. It is interesting to note that in 2019, the U.S. second-hand clothing grew 21 times quicker than clothes sold by conventional retail according to the report.
Comparison of the U.S and U.K retail.
In the U.S, there are more than 25,000 consignment, resale, and not-for-profit shops operating in the ‘Thrift store’ industry, which is the near equivalent to the UK’s charity shops. By comparison, there are approximately 10,850 charity shops operating in the U.K. For comparison the total U.K. market is worth approx £52 billion which is proportional to the US market when population size is considered. For reference the U.S. population is 329.5 million (2020), compared to the U.K. population of 67.2 million (2020).
Approximately 20% of Americans will shop at a Thrift store at least once during an average year. Whilst in the UK over 80% of the adult population in the U.K. visit a charity shop. Clearly more people in the U.K. are using charity shops than their equivalent U.S. Thrift shops, so the U.K. market appears to be more mature and established.
Shops and online
The two main channels within second-hand clothing are Charity Shops (Thrift stores in the U.S.) and Resale platforms. Resale platforms are predicted to have a growing importance within the second-hand clothing market moving forward. Also, the rather negative perception of the second-hand clothing market within parts of the population especially in the U.S. is changing. It is now perceived by many younger consumers as of superior quality to new or unworn clothing, and these younger consumers are highly likely to use resale platforms to make the most of their purchases.
The concept of “fashion flipping” or buying second-hand clothes and reselling them seems to be emerging especially amongst younger consumers. There are a growing number of new digital platforms, and the sellers are often individuals, so C2C (consumer to consumer) and not simply charities or Thrift stores B2C (business to consumer). This buying to resale immediately is also expected to grow with some people doing it as their main business or a ‘side hustle’ (Oxford Dictionary definition ‘a part-time job that a person does as well as their regular job´) and this is likely to grow. A good example of how this potential growth is perceived is the purchase of Depop by Esty in 2021 for $1.625 billion, which is based upon potential rather than the traditional recent financial performance-based valuation.
The other aspect is consumers want a good shopping experience, so all Thrift and Charity shops need good merchandising standards. Most importantly they will need to ensure the customer journey is good by the clever use of retail space, and hot spots, plus price the items to generate sales and an optimum return for the charity.
Many C2C sellers in the U.K. purchase their items in charity shops to sell them on online platforms, thus reducing the potential value charities receive from their supporter’s donations if they had priced them correctly.
It is also predicted that Fast Fashion (Value Brands – Primark etc) is expected to steadily grow by 20% over the next decade. However, second-hand clothing is poised to grow by an incredible 185%, which means good news for the environment as second-hand clothing is better for our planet and great for charity retail.
The best tool to use is to ensure you have got your 5P’s right.
The 5 P’s
- Product: Product categories and range stocked in shops or sold online.
- Price: Pricing strategy in shops or online.
- Place: This the Customer Journey – Shop layout or online, how the pictures and produce description is used.
- Promotion: The format of the shop, for example traditional charity shop, boutique, specialist shop or what platforms to use online.
- People: The shop teams or online team’s skills and capabilities.
Summary
Whilst the U.S. market for second-hand clothing is likely to grow faster than the U.K., as the U.S. market matures, there are three things we should take from this report.
- The second-hand clothing market is likely to grow in the U.K.
- Shops and online are both important channels but you need to ensure your offer is right.
- Use the 5P’s to ensure nothing is overlooked.
If your retail business does not have an up-to-date Retail Strategy for any reason, then this check list is a suitable place to start. If your Retail Strategy need updating, then do use this check list to ensure nothing key is missed.
Sometimes having some external input can be very helpful, therefore if you need further advice or support, then please do not hesitate to contact the UK’s leading Charity Retail Consultancy.
Charity Retail Training & Support Services are a UK registered training provider, made up of a varied team of skilled specialists. Our team provide charities with the support they need to achieve their goals. Our breadth of experience and dedication empowers countless charities to optimise the return from their retail outlets.
If you would like to find out more about our Brand Directory or any of the other ways that we have helped so many charities with their retail business, please get in touch at hello@charityretailtraining.co.uk or on 0208 050 7514.
