< back to blog home

What Goes Around Comes Around: The Unstoppable Digital Consignment Market

What Goes Around Comes Around: The Unstoppable Digital Consignment Market
  • shares

I have an Anthropologie problem. No, really. You put a cat print and a Peter-Pan collar on a shirt and Anthropologie will sell it and I will buy it (I made this up and then realized I do actually own this shirt). But what is challenging about being an Anthro shopper is that some of the most unique products have an ephemeral life on shelves and an exclusivity to the company. In other words, once it’s gone, it’s gone. Almost two years ago as a crazed brand-fan in search for a specific shirt, I found Poshmark - an online platform for buying and selling clothing, shoes, and accessories. Before finding consignment online, I dabbled in second-hand and vintage shopping. I knew my brands and with my relatively strong fashion sense I relished the hunt for hidden treasures. But with Poshmark, I replaced my rack-skimming with app-browsing and my closet has never been the same.

The Dawn of a Not-So-New Era

The space for online consignment is growing but is also fascinating in how it has deviated from the normal fashion market. Poshmark is one of a few platforms that have been whittled down from the larger competitive market to re-sell goods that have been previously owned - the used car dealers of the fashion world. In looking at growth patterns they are positioned to make a killing especially amongst millennial and generation z consumers. According to a study done by thredUp, an online retailer who pays consumers to send bags of used clothing to their warehouse which they turn-around online, the online consignment market has a growth rate of 82%. Currently at $14 billion dollars, this means the market will grow to $25 billion by 2025. Additionally, 1 in every 100 American households shopped resale in 2016. But why is this market suddenly resonating with online consumers?

To begin with, retailers have long since recognized the power of millennial shoppers. But with Generation Z coming into their purchasing power as a digitally native demographic, the market for financially accessible goods with trend and name relevancy is in demand. For online consignment sites who can provide digital ease, brand power, and low prices the timing is right. Take for instance a pair of Rag and Bone booties. A traditional pair retails at close to $500 and is rarely offered on sale. If you are willing to trust an online site that is vouching for the used quality and offering the same product at more than half the price, then as a customer that is a steal.

alt

From Used to Certified Pre-Owned Fashion

But how have re-sale sites tailored their platforms for online consumption to make the goods attractive aside from just the price? One thing that today’s successful resale platforms have done is overcome the “ick” factor in selling used clothing and accessories. Much like the shift from “used cars” to “certified pre-owned”, companies like Poshmark and thredUp have shifted the psychology around consignment goods to make them fashionably relevant and fit for re-consumption. For example, companies like thredUp and The RealReal enforce strict standards around the quality of products they accept as well as transparency to any flaws or signs of wear. Additionally, trends are spoken to through curated collections and a spotlight on popular brands and styles. Making quality and relevancy priorities allows the consumer to trust the goods they purchase not only secondhand but also through an online platform.

Insta-Shopping

Another differentiating factor with the online consignment market is the capitalization on social media behaviors in a sharing economy. On sites like Poshmark, the market is driven by members of the online community who post their own content, dictate and negotiate prices, and like and share other member’s listings. Customer engagement and control on these platforms allow for greater agility and quicker turnaround on products. As a customer, you can follow your favorite “closets” and “like” a listing a la Instagram style. As a result, these types of online consignment sites have created shopping communities that allow customers to know when new listings from their favorite members or brands are listed or updated and react just as quickly.

alt

Take for instance this Anthropologie coat I considered buying on Poshmark. The seller has included pictures of the actual garment and stock photos from the original website posting so I know it’s the real deal. I also have the option to “like” it and save it for later (which I did) and make an offer if I think the seller priced it too high (they did). I also have the option to comment on the listing to ask any specific questions - a feature not always possible on your regular e-commerce site. If I didn’t know any better, it would seem like Instagram started to sell clothing.

Thrill of the Hunt

Aside from legitimizing and digitizing second-hand clothing, online consignment has also found success by meeting the needs of hard-to-fill customer demands. The types of niches the market fills for the customer include affordable luxury, hard to find items, and trendy pieces and brands that at their original cost are out of reach for the customers that desire them. As a customer, this is how I found Poshmark in my search for hard to find items - looking for unique Anthropologie items that were no longer in stock. For others, this market makes luxury more accessible. Take for instance the company the RealReal. Instead of a $675 pair of leopard print Christian Louboutin pumps, you can purchase a pair with worn soles for less than half the cost. Additionally, the RealReal offers financing services to take the ease of buying luxury one step further. These leopard Louies? Can be yours for $34 a month. Not bad.

While the allure of treasure-hunting in a vintage store in the Lower East Side still is there, online consignment has hit a stride with the savvy digitally competent consumers of today’s market. Finding the best brand for the best price and on your own terms is more possible on these platforms now than ever before. Soon enough, it may be the resale markets providing the most competition for the original retailers themselves. Until that happens I need to go back and scoop up that Anthropologie coat before it truly is gone forever.

Related Article