How A Booming Resale Business Could Lead The Future of Sustainable Fashion

Wayback when (before it became chic), rummaging through thrift stores and Church charity shops to buy secondhand clothing carried a certain stigma — they were tiny, often disorganized spaces packed with racks of old T-shirts, polyester blouses, and all sorts of strange, costumey garments from any decade accented by a hint of mothballs. But for many shoppers, thrifting was about more than bargain-basement prices: It was also where you could stumble upon a mispriced vintage Chanel jacket that cost less than lunch. People who love thrifting describe it as a treasure hunt, one that eventually migrated online to eBay and, for those looking to do slightly less work, the early version of Nasty Gal. For the most intrepid of shoppers, the opportunity to sift through finds that weren’t professionally merchandised presented the greatest sartorial reward of all: deciding for oneself what was cool and “in style.” 

In recent years, the contrast between buying secondhand and shopping in a glossy brand flagship has blurred pretty significantly. Online resale sites like The RealReal, Depop, and Poshmark, all of which launched in 2011, have made buying used clothing as simple and appealing as ordering groceries on FreshDirect. Browsing product listings often feels more akin to perusing a department store website — or, in the case of Gen Z favorite Depop, scrolling through Instagram. EBay, the granddaddy of online resale that launched in 1995, draws 182 million active buyers globally, and has made it possible for millions to earn major money selling on its site. (This is, after all, how the once-revered Nasty Gal got off the ground.)

Shoppers everywhere are eating it up: Not just those who are short on cash, but people with annual incomes in the millions. Tech investors are pouring money into the space, with Depop raising $62 million in June and ThredUp closing a $175 million round last month, bringing its total funding to more than $300 million. The RealReal, which focuses on luxury fashion, went public on the Nasdaq stock market this summer, bringing a new level of legitimacy to the business.

The business of secondhand clothing isn’t changing just because of its explosive growth, though ThredUp estimates that the sector was worth $24 billion in 2018 and could swell to $51 billion by 2023. In recent years, resale sites have realized that they’re finally able to capitalize on their businesses’ inherent sustainability factor. As concerns over fashion’s tremendous environmental impact have grown louder and more persistent, resale — and, to a certain degree, the clothing rental business — has become something of a white knight for sustainability in fashion. According to the New York Times, fashion accounts for 8 percent of the world’s greenhouse gas emissions, and a majority of new clothing gets incinerated or tossed in the trash within a year. In light of alarming facts like these, buying used clothing has started to look like a seriously good alternative — even for beginners not so familiar with digging in $2 bins.

Chloë MacDonald-Comely, 26, swore off fast fashion as a New Year’s resolution, citing its immense waste and the higher potential for cheap fabrics to shed microplastics. Mistrustful of greenwashing from brands that make big but (upon closer inspection) flimsy sustainability claims, she started buying secondhand clothing on The RealReal, Depop, and Instagram.

“I think that resale in the long-term is better for the environment, because you’re not creating waste,” says MacDonald-Comely. “It feels more impactful to stop creating the need for consumption, because I think that’s a big part of sustainability — the over-consumption of everything.”

Shoppers like MacDonald-Comely are changing the way that resale sites talk about sustainability. Executives at The RealReal, ThredUp, Rebag, and Rent the Runway say that environmentalism has always been a pillar of their businesses, which promote reuse over purchasing new, but in the last few years it has become clear that customers are increasingly turning to them as a way to reduce their impact, too. With that encouragement, resale and rental brands have proceeded to roll out marketing that more boldly broadcasts their eco-friendliness — a feedback loop that heightens consumers’ awareness of these companies as a lower-impact substitute for buying new clothing. And that, of course, can shift our shopping behaviors.

Sustainability "is baked into the DNA of the company,” says Erin Wallace, brand director of ThredUp. “However, ten years ago, that was not what people were talking about. Leading with that message would have gotten us nowhere, quite frankly.”

When ThredUp launched in 2009, its biggest hurdle was convincing shoppers to buy pre-worn clothing in the first place, since it still carried a stigma, says Wallace. (In what now seems like a very smart business move, ThredUp launched as a site for secondhand children’s clothing — hand-me-downs being more widely accepted — before expanding into women’s clothing, hooking the moms who were already customers.) To compete with low-priced fast fashion brands in the aftermath of the Recession, ThredUp’s marketing emphasized its affordability, wide brand selection, and practicality as a closet clean-out tool. For those who found eBay and Goodwill too unpleasant and time-consuming, ThredUp provided a more convenient, appealing way to acquire the same things.

But Wallace says that over the last two years, customers have also become focused on the sustainability aspect of resale and are more receptive to marketing around that topic. Hesitant to make environmentalism a central piece of its wide-scale advertising efforts until it was a proven lure to shoppers, ThredUp began dipping its toe into the conversation on Instagram, where it posted an open letter to Burberry about its practice of burning unsold product in 2018. (It got more than 23,000 favorites.) By this spring, apparently, ThredUp had the evidence it needed: The site teamed up with Olivia Wilde in April to launch a collection of screen-printed secondhand clothing, explicitly driving at the idea of reducing textile waste.

Because it trades in luxury brands like Gucci and Balenciaga, The RealReal has made product authentication a key piece of its value proposition to customers; eBay launched its own authentication program in 2017. The RealReal employs more than 100 experts who specialize in areas like jewelry, watches, and leather goods, though its work to weed out counterfeits has seemingly had its hiccups. (“The RealReal puts all items offered for consignment and resale through its own unique, rigorous, multi-point and brand-specific authentication process before it accepts them,” a rep for the site wrote by email. “We stand behind that authentication process for everything we sell. If there is ever any question raised as to authenticity, we will always work with our customers to make it right and continue to provide a safe and reliable platform for consumers to sell luxury items.”)

But shoppers aren’t just coming to The RealReal because they want certified Hermès. In its 2019 resale report, The RealReal said that 82% of its customers now cite sustainability as an “important reason” for shopping on the site. Allison Sommer, Director of Strategic Initiatives at The RealReal, says that number has been gradually ticking upward in recent years, spurred on by its first designer partnership, with Stella McCartney, in 2017. McCartney is one of fashion’s most vocal advocates for eco-friendly design, and in working with her to incentivize consignment of her collection, the consignment site spoke about sustainability in a way that, Fashionista’s Dhani Mau wrote at the time, “the RealReal hasn't really emphasized in its marketing to this degree before now.”

With reports on the disastrous effects of climate change growing ever more dire, demands for action have dominated headlines in recent weeks, as with 16-year-old climate activist Greta Thunberg’s forceful speech at the United Nations Climate Action Summit and the youth-led Global Climate Strike. It’s no wonder consumers are thinking more carefully about how their purchasing decisions figure into the bigger global picture. Resale and rentals run opposite to the buy-it-and-toss-it ethos of fast fashion.

Resale and rentals are, of course, just one way to tackle fashion’s enormous climate footprint. Sustainable fashion, which once called to mind hemp sack dresses and the like, has undergone, as they say, a major glow-up. In July, the luxury conglomerate LVMH took a minority stake in Stella McCartney with an eye toward improving sustainability efforts across its portfolio of labels, which includes Louis Vuitton and Dior. While McCartney has invested in using vegetarian leather and recycled synthetic fabrics, other brands have launched fabric recycling programs (Madewell turning worn-out denim into housing insulation) and are reconfiguring their supply chains to reduce energy and water usage (Levi’s is developing jeans, which typically carry a heavy environmental impact, that require less water to make). Gucci, Versace, and Prada are among the fashion houses that have pledged to eliminate fur from their collections over the last few years. The idea of luxurious, environmentally friendly fashion is no longer an oxymoron. It’s becoming the norm.

But buying or renting used clothing online isn’t without its environmental costs, which executives say comes down to shipping and packaging. To that end, The RealReal has pledged to reduce its carbon emissions by 30 percent by 2030. To contend with its packaging waste, Rent the Runway swapped out plastic mailing bags for reusable garment bags in 2015, though it is also the largest single dry cleaner in the country. Is it a green dry cleaner? Gabby Cohen, Rent the Runway’s SVP of brand, communications, and business development, says that the company doesn’t use PERC, a toxic chemical traditionally used in dry cleaning, and notes that it’s always looking to reduce its environmental impact on that front.

But compared to recycled fabrics or supply chain waste reduction, which requires faith that a brand really is making good on its promises, buying pre-worn clothing and selling your unwanted garments has a compelling materiality. You may not know how that secondhand dress got made, but you know with certainty that at the very least it’s not a new dress.

“It’s a feel-good moment,” says Charles Gorra, the founder and CEO of Rebag, which sells used handbags. “I’m actually doing something. I’m actually being proactive in solving this.” 

Gorra believes that more impactful change is yet to come. Brands ought to bake resale into their business models, he says, engineering clothing and accessories to be more durable (to accommodate a longer lifespan) and offering resale services to customers, whether on their own or via a resale partnership. Clothing companies have historically been hesitant to work with consignment sites, seeing them as an unknown or a threat to sales.

After its Stella McCartney partnership, Sommer says that The RealReal reached a “tipping point” in the number and frequency of brands reaching out about partnerships. Like Gorra, she views resale as a key part of the fashion ecosystem.

“We absolutely see resale as a built-in part of every single retailer and luxury brand,” says Sommer. “It should be an assumed part of the shopping experience.”

Besides, it would be great for marketing. What retailer doesn’t want that sustainability glow right now?