WHAT IS MINE IS YOURS: THE RISE OF RENTAL AND SECOND-HAND STORES

The new generation of rental and sales platforms begins to take the leap to the physical store. Pop-up store of the British clothing and bag rental store By Rotation.

As the resale of clothing and taste for vintage gains traction among Generation Z, this trend, which has already been embraced in the fashion sector, is starting to creep into the lifestyle sector as well. According to a survey conducted by GlobalData for the resale platform thredUP, the global resale industry will be worth £31bn by 2022, up from the £15.1bn in 2018. According to eBay, Generation Z is the most likely to buy second-hand: 81% of 16-24 year olds say they have opted for second-hand before first-hand in the last year (Source: Fashion United).

Such has been the boom of applications such as Depop, whose sales increased by 300% in 2020, Etsy, which acquired Depop, and brands that have opened their own second hand line such as Zalando and ASOS, many of them have made the leap to physical stores and events, evolving from the URL (Uniform Resource Locator: a unique and specific page or resource address that exists on the internet) to IRL (In Real Life).

In Shanghai, fashion retailer ENG recently opened its second store, designed to appeal to the younger demographic.

The pandemic has not only changed the mindset of young consumers in terms of their shopping habits; the lockdown was a (hard) blow to a generation that is at a decisive moment of personal growth and which is looking for likeminded individuals in the community. It is only natural, therefore, that there is a renewed desire to come together and share experiences in the social space, which will eventually translate into retail.

Around 50% of Brits still prefer to shop offline.(Source: Pinterest)

But does it really pay off?

If anything distinguishes Millennials and especially Gen Z from their predecessors, it is their lower purchasing power, making them consumers with different needs. With a life defined by lack of stability and precariousness they look more favorably on usufruct systems than on product ownership models. In other words, gaining an immediate reward rather than buying for later use.

With the rising tide of digital consumers, many question the need to open physical stores, especially after the crisis the world has been plunged into during the last eighteen months. For established names like Rent the Runway, the closure of their stores during the pandemic proved to be the straw that broke the camel's back, and hastened their plans to return to their origins as a digital marketplace.

However, for these startups, it does pay to have a small number of physical stores in strategic locations that serve as important customer touchpoints that can drive online sales. The majority of US shoppers (56%) say they visit stores at least occasionally to see, touch and feel a product before buying it online, and a third of consumers do so regularly. Nearly all shoppers (86%) say they like experience stores, where they can try products and then buy them online (Sources: US Census Bureau, Retail Dive, GPShopper/YouGov).

Depop's first physical store opens as experimental hubs to bring its community together and generate videos that translate into social media content. It has already opened 3 such stores: one in NY, one in LA and the latest one in London.

"The physical store is the key to responsible consumption."Rebekah Matheny, slow retail expert and researcher, department of design, Ohio State University.

Old is the new new

Thanks to interior design and product placement, second-hand stores are raising the prestige of second-hand products. They are playing with the pre-loved concept, and in doing so distinguishing the product from second hand. Inside stores, brands and retailers are increasingly relying on design to enhance the shopping experience for their customers and increase the value of the product, from their digital platforms and to physical spaces that provide opportunities beyond simple transactions.

In addition, as a movement targeting millennial and Generation Z consumers, resale success is being achieved through the creation of a growing underground community. These are consumers who are not fake activists, but those who seek to demonstrate their commitment to buying and selling sustainably.

Re-told fashion pop-up store in association with Harrods and Cadogan, London.

Pop-up store de Vestiaire Collective en Selfridges, Londres

If there is one thing we can be sure of, it is that physical retail is not dead and the next few years will see myriad innovations arising from the need to maintain the convenience of online retail but in a physical space, while reducing the environmental impact as much as possible. As Depop and ThredUp have recently shown, there is huge potential for physical stores when it comes to reselling clothing. This is a market that even luxury brands are trying to kick-start, driven by this new consumer set, with initiatives that tackle the second-hand market as an opportunity rather than a threat.