While global apparel sector growth is set to slow in the short term as a result of macroeconomic challenges, the resale market remains strong and between 2023 and 2028, is forecast to rise at a CAGR of 11.4% to reach $298.6m.

Though a softer CAGR than the 16.3% achieved between 2018 and 2023 as the market is now more established, it is still set to outperform the apparel retail market which is only forecast to grow at a CAGR of 2.4%, according to GlobalData.

Success of the market, however, hinges on its ability to tap into the desire for value at a time when consumers find themselves increasingly cash-strapped.

Additionally, retailers and specialist platforms will need to explore the use of digital tools like AI, reduce fees and invest in logistics to drive growth.

Here are five trends you can expect in the apparel resale space over the next few years.

1. Tariffs, cost pressures to drive secondhand demand

As the cost of living increases globally, consumers are becoming increasingly concerned about their financial situation.

According to a recent survey from GlobalData of over 22,000 consumers in 44 countries, 30% said they cut back on apparel spend in the first quarter with a notable shift to brands and channels offering more value.

Resale marketplace Vinted reported its FY revenue reached €813.4m ($926.5m) marking a 36% rise from the previous year’s €596.3m.

The group saw its financial standing improve markedly with a net profit of €76.7m, a significant leap of 330% from €17.8m in FY23.

Its adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) also saw an uptick to €158.9m from €76.6m in the prior year.

“Consumers are actively looking for ways that they can reduce their spend on apparel, such as shopping secondhand, trading down to cheaper brands and also focusing on capsule wardrobes that promote less frequent purchases,” said GlobalData’s head of apparel Chloe Collins.

“When you add the retail and resale apparel markets together, resale accounted for just under 10% of spend in 2024 with a market size of $205bn and we expect that this will grow by almost 50% by 2028 to $302bn when it will then account for almost 13% of total apparel spend.

“The resale market has grown rapidly over the last few years, as awareness has grown, but also because it provides consumers with a cheaper and more sustainable way to shop. Vinted in particular has been a huge success in Europe and continues to expand, with its revenue increasing 36% last year, and brands and retailers such as Zara and Primark have also been growing their own secondhand propositions,” Collins said.

And with uncertainty around tariffs serving further bad news for the fashion sector since clothing and footwear are often considered nice-to-have rather than a must-have, once again, it is to the benefit of resale channels.

“We do think we could see an even bigger shift to secondhand now as a result of the US tariffs,” says Collins.

GlobalData senior apparel analyst Louise Deglise-Favre adds: “In general we anticipate the tariffs will likely further boost demand for resale, especially in the US as consumers will be looking for affordable prices amid widespread price increases.”

2. Apparel retailers jump onto resale bandwagon

Spying the success of resale platforms like Depop and Vinted, many household fashion names have turned their attention to secondhand.

Brands including H&M, Levi Strauss, Lululemon, Patagonia and M&S to name a few, have all tapped into the space as they look to save spend being stolen from the likes of Vinted and Depop.

It is unlikely fashion retailers and brands will ever be able to fully compete with peer-to-peer resale platforms, as their ranges will be much smaller and are also usually more expensive, with many actually choosing to launch resale by partnering with well-known specialists to leverage their operational expertise. But these initiatives do provide retailers with the opportunity to diversify their revenue streams and strengthen brand perceptions. Almost three quarters (72.8%) of UK apparel shoppers are more likely to shop with a retailer/brand that offers secondhand as well as new items, and 80.8% perceive retailers and brands that offer secondhand to be more sustainable, according to analysis from GlobalData.

3. Footwear resale to experience strongest growth

Footwear will be the fastest growing category rising at a CAGR of 13.8% between 2023 and 2028, causing its share to rise 1.3ppts to 13.2%, according to GlobalData.

This is primarily due to the popularity of the trainer resale market, which has expanded away from specialised platforms such as Kick Game and StockX into general players such as eBay and Vinted.

Hygiene concerns surrounding secondhand footwear are softening and trainer resale will drive growth, especially for limited editions and rare models which can gain in value over time. Men’s will therefore grow the fastest at a CAGR of 15.0%, versus 14.0% and 9.8% for women’s and children’s, respectively

4. AI and Digital enhancements to increase appeal

Secondhand is getting smarter which is only set to accelerate its growth. Resale platforms have been enlisting the help of AI to streamline the product listing process.

In September 2024, Depop introduced a new description generation tool, using image recognition and generative AI technology to accelerate the listing process, by automatically populating information relating to colour, category, brand, and sub-category. This reduces some of the effort involved in listing items, encouraging more consumers to sell and driving more choice and variety on the platform, while also improving the consistency and accuracy of listing details, which benefits buyers.

This follows a suite of wider AI and machine-learning driven enhancements to the Depop experience over the past year, including predictive recommendations and pricing guidance.

In August 2024, ThredUp also launched a range of AI-powered features, including an image search function and a style chat enabling users to find complete outfits based on specific requirements and occasions. This simplifies the shopping process, allowing users to refine their search and find items without sifting through endless listings.

“AI can be leveraged to predict trends, optimise inventory management, adjust pricing and personalise recommendations, while AI-powered image recognition can help sort and categorise items, and assist customers in finding exactly what they’re looking for,” says GlobalData.

5. Sustainability awareness drives apparel resale demand

Consumers may well be thinking about the cost of living currently and financial pressures may be high, which is why many are turning to secondhand channels. However, lots of consumers are still using it as a means to live more sustainably.

A survey from GlobalData reveals that 80.8% of consumers are likely to shop from a retailer that offers a secondhand option as they perceive them to be more sustainable.

In September 2024, Primark launched its first-ever Swap Shop initiative in collaboration with the circular clothing company Verte in three UK stores in London, Manchester and Birmingham. The Swap Shops allowed consumers to bring in up to five apparel items in good condition to be assessed and swapped for digital tokens on the Verte app. The tokens could then be spent on secondhand items from Verte’s collection. The initiative helped bring some awareness to Verte’s circular consumption model, as well as improve Primark’s sustainability credentials.

However, even though the resale market is widely perceived as being more sustainable than buying new, concerns remain around the environmental impact of the sector with regard to shipping, packaging and returns.

“Resale players should partner with carbon-neutral logistics companies to minimise emissions. Platforms should also consider releasing impact reports, like Vinted and Depop, to further enhance their sustainability credentials,” says GlobalData.

By Just Style