A Retail Bright Spot According to First Research, the US used goods industry consists of approximately 20,000 stores, including resale shops, consignment stores, thrift stores and antique stores, with a total annual revenue of $17 billion. Thrift stores earn more than half (58.2%) of their revenue from clothing sales. This segment increased quickly during the recession as consumers shifted from retail stores, and is projected to continue to increase, although at a slower pace. According to the US Census Bureau, used merchandise stores sales increased 11.4% during the first half of 2017, compared to 2016, from $8.052 billion to $8.973 billion. The secondhand apparel industry is forecasted to reach $33 billion by 2021.

Bargain Hunters’ Bonanza Brick-and-mortar thrift store sales are increasing 8%, but more so online, at 35%. Shoppers’ motivations include saving money, enjoying the shopping experience and environmental consciousness. Women 18–24 and 65+ are the largest demographic groups of used merchandise store shoppers. 77% of frequent secondhand shoppers are working professionals and 71% own their home. Off-price retailers, such as TJ Maxx and Marshalls, are the most at risk, with half of secondhand shoppers surveyed by ThredUP saying they diverted money from discount stores to buy used goods.

Used Merchandise Benefit the Many There are three types of used goods retailers: thrift shops run by not-for-profit organizations, such as Goodwill Industries; resale for-profit businesses, such as Savers; and consignment shops, which pay owners 40–60% of the sales price once the item sells. Goodwill Industries operated more than 3,200 retail stores and its online auction site, shopgoodwill.com, and generated $4.16 billion in retail sales during 2016. The Salvation Army had 1,237 thrift shops during 2015, with sales revenues of $611.2 million. Savers, although for-profit, supports charities by buying donated goods from them to resell to consumers. During 2016, they operated 330 thrift stores and paid $160 million to more than 120 non-profit partners. They also recycle unsold items, usually overseas.

New Dollars in Used Goods Popular online resale sites include Swap.com (general clothing and accessories), Vinted.com (general clothing), Poshmark.com (mid-end designer goods), ThredUP (like new, mid-end designer goods) and Snobswap.com (top designer goods). Winmark stores are a franchise model, giving prospective secondhand retail shop owners the benefit of its know- how and branding. It currently has almost 1,200 stores. Winmark stores sell new merchandise in addition to used items. Buffalo Exchange is a chain of 49 resale stores in 20 states. Crossroads Trading Co. has 35 stores, mostly in the western US.

Wise Millennials Love Secondhand Shopping Almost two-thirds (61%) of Millennials are primarily motivated by eco- consciousness when shopping for secondhand items. Among Millennials aged 18–24, 30% have shopped secondhand during the past year and an additional 21% say they plan on shopping secondhand during the future. Shopping secondhand satisfies Millennials’ craving for experiences in two ways. First, they never know what they will find, so shopping is a fun and surprising experience. Second, 65% say they will spend their savings on experiences with loved ones.

Online and On the Hunt for Deals Websites, such as ThredUP and The RealReal, are augmented marketplaces, providing photography, shipping and customer service. Sellers are responsible for these services when listed on peer-to-peer marketplaces, such as eBay. Online resale sites present the biggest challenge to off-price retailers, which have trouble displaying, indexing and selling merchandise online. Resale shoppers are twice as likely to shop online than off-price shoppers. According to the thredUP report, 69% of sellers also shop secondhand, and 41% of buyers also resell their clothing.

Advertising Strategies When advertising to Millennials, focus on eco-consciousness (saving tons of useable clothing from landfills) and the surprise element (you never know what amazing piece you’ll find). When advertising to Baby Boomers, focus on value and the ability to live simply by trading in unused wardrobe pieces for new and exciting ones. Target consumers with incomes of $75,000 plus, appealing to their wisdom at shopping smart to retain more of their wealth.

New Media Strategies Email and text marketing will let you reach customers and let them know about new arrivals. Keep a CRM with customers’ wish lists, so you can alert them of new store merchandise they may be seeking and may motivate them to buy more. Encourage customers to send you photos of themselves wearing items they bought from you and publish them on your Website and on social media as a “street fashion report.”