Op-Ed | Will the Online Fashion Resale Market Take a Flash Sales Nosedive?

Fashion resale sites could follow the trajectory of online sample sales, from must-shop to bottom-feeder. But there’s an alternative.

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NEW YORK, United States — There’s been a digital explosion in the market for pre-owned fashion. In the past year, we’ve seen a veritable land grab in the online consignment and resale space with the number of  “re-commerce” sites now exceeding 50 — and many more, no doubt, incubating in Silicon Valley, New York, London and beyond. Several market levels are being addressed: mall/high street (Threadflip, Tradesy), thrift (LikeTwice, NiftyThrifty), upmarket (TheRealReal), haute vintage (Byronesque) and boutique (ReFashioner, my own company).

It may seem like these sites are dealing in a mere by-product of the fashion industry. But no, this is the product. Everything that’s bought becomes pre-owned. A tidal wave is building and it has the power to undermine or even destroy. Indeed, the stockpile of merchandise is overwhelmingly vast. I did the math in 2009 for ReFashioner’s beta, a luxury fashion swap site: $880 billion trapped in closets. And that’s just high-end womenswear in the US.

Picture the slide in all those investor decks from 2011 to 2012, during which an estimated $172 million in venture money was poured into second-hand fashion extraction vehicles. That spectacular metric seemed to be the successor to the surplus inventory calculations of Gilt, HauteLook, RueLaLa, Ideeli not to mention the doomed, exorbitant US launch of Vente-Privee. As with flash sales, the investor story in “re-commerce” is about monetising excess inventory.

But therein lies the rub. As with flash sales, this inventory is delimited by the retail market. And it’s wayward. The ROI sucks when every SKU is singular and inventory is locked up — literally in houses. And there’s something of a standoff between buyer and seller: the non-professional seller, accustomed to seeing 100 percent mark-ups in the real world, wants top dollar for her career basics and contemporary designer wear, while the buyer wants Zappos-like service, Etsy pricing and Net-a-Porter merchandising. There are other issues too: resistance to higher ticket items without fittings, sketchy return policies, knock-off trading.

But there’s more. This merchandise is personal. It’s not just a numbers game, it’s about everything fashion means to us. It’s about honouring the past of the clothes and their place in our lives. If this is going to work, we need to add content and context. Idealistic, maybe. But idealism is how things get changed and idealism can work to the advantage of this category.

Remember, it wasn’t so long ago that shopping second-hand was contrarian. I remember, because I’ve always preferred pre-owned. It’s about the hunt and the history and the souls of objects; it’s about the superior construction of true vintage, about loathing trends and liking to look different. But then, suddenly, vintage was in vogue (and in Vogue).

Back to that tidal wave. All this new-old merchandise, if left to its own devices, could drown a lot of bottom lines. As the increasingly variegated and expanding pre-owned market cracks the above-listed consumer fears — and it’s happening — there’ll be ever-wider acceptance of actual vintage and of past season pieces. The fashion industry can try to ignore it or fight it, but it’s happening and embracing it is really the only option.

At first glance this tidal wave of owned merchandise, when it’s resold, contributes nothing to the bottom line of those who originally produced it. It seems to undermine the industry. But with a more systematic approach to valuation, we could create a secondary market that actually enhances the primary one. It’s resale value as a selling point; a designer’s archive as author’s back catalogue. The best work stays in print — or the best pieces retain (and maybe increase in) value. I’ve come to think of this as the ‘Blue Book of Fashion’ not the Corvettes and Cadillacs and Subaru Outbacks of different years, but the Birkins and Bumsters and Wrap Dresses of different vintages, and on through the ranks of fashion from haute to high street.

Such a ‘Blue Book’ would have the handy side effect of collating designers’ old work. And then quality past-season pieces of all price points can be recognised and properly valued. Conversely, trash can go cheap — no more Bangladeshi factory workers need die for fast fashion.

So how can such a massive task be achieved?

If all the clothes in the world come back to the market in a second (and third, and fourth…) round, who could possibly write that catalogue? Why, ‘the crowd’ of course. I envisage a structure into which the buyers and seekers and sellers and owners input each piece’s data — and an algorithm spits out its current value, according to factors like consumer desire, realised prices, original (adjusted) retail.

Why does this matter?

It matters because we, as a species, need to rethink our consumption. In all areas, including fashion, we must buy less, but buy better. Invest in quality that retains value. Gradually our mass taste buds will crave more haute flavours. And, if the pre-owned market is successfully stratified and organised, we’ll be able to purchase better quality items at several points in a garment’s lifecycle.

Currently, pre-owned vendors in the midst of the current land grab are fighting Round One, competing for the glammest cast-offs, rooting through socialites’ spare rooms, hitting up the same stylists, editors, designers, bloggers — oh there’s plenty to go around, even if the scuffle is a little unseemly. But then comes Round Two, when the first resold pieces come back on the market and everyone wakes up en masse to the cash that’s sitting in their closets. We don’t want a bloodbath. We need a plan.

So let’s learn from the demise of flash sales and avoid a race to the bottom. The closet economy is a closed economy: let’s avoid inflation and set some standards. Let’s remember the true value of great design and good design and pre-loved ‘interesting’ design. Let’s work together to literally revalue the objects we spend our lives creating, styling, writing about and selling.

Kate Sekules is the founder of ReFashioner.

The views expressed in Op-Ed pieces are those of the author and do not necessarily reflect the views of The Business of Fashion.

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6 comments

  1. With over five years of corporate buying experience for large all American Brands (Bloomingdales, Gap & American Eagle Outfitters), I launched sweet & spark with a mission to bridge the gap between the mass market and the overwhelming & un-glamorous world of vintage. Partnering with my dad on his love for antiquing, he’s doing the dirty work scouring yard sales, flea markets & antique shops along the East coast and I’m out West, curating assortments of quality & affordable costume jewelry from the 40s-90s. No one in the world of vintage is focusing on jewelry in an aesthetically pleasing way. We’re creating credibility and the opportunity to buy green. Help make vintage cool again and stop over consuming.

    http://www.sweetandspark.com

    Jillian from San Francisco, CA, United States
  2. Nice work.
    I have a vintage shop on Etsy, and mostly wear vintage & used clothing. So much more fun to go shopping (treasuring hunting) ….and not look like a clone.

    Jacqueline Burns-Walters from Rancho Cordova, CA, United States
  3. With the rocky economic landscape and ethics being questioned in light of the tragedy in Bangladesh and Cambodia pre owned clothing and accessories can be the marketplace for those who love style and hate fast fashion along with its questionable standards.
    It is difficult to find many products which can be considered environmentally friendly and ethical however buying pre owned can mean you are investing in quality, a piece of history and using your power, your power of demand you can help drive demand away from fast fashion.
    The issue often flagged is that fast fashion is considerably cheaper than quality and designer fashion and how can those on lower incomes buy even quality pre owned? I wonder what percentage of the population this truly applies to.
    I personally believe consumption of fashion has become culturally engrained, the marketing and buy, buy, buy culture along with the legacy of the credit boom although now largely bust has ingrained the social fabric of this society to buy more and much as possible.
    Until society changes its values and values quality and sustainability will we see positive change in the fashion industry as a whole.
    I personally embrace pre owned fashion and vintage clothes so its great to hear this on the agenda.
    Thank you
    Polly
    http://nestmagpie.blogspot.com

    Polly from United Kingdom
  4. Hi Kate! I work for Fashionbi, and as a girl working in the fashion luxury industry, its endearing to come upon people who don’t live by today’s trends. I totally agree with you, I love purchasing second hand because I feel it has more of a story and a background to it. I love finding vintage pieces and having that feeling that you’ll never find this in any store and most especially aren’t on the racks of fast fashion retailers like Zara and Topshop. Moreover, its nice to think how many parties or events or how many experiences this dress or those shoes must have had, and how many more it will have in the future. I thoroughly enjoyed your article, and hope that this industry does become stronger in the future. :)

    Ria Fernandez from Manila, Manila, Philippines
  5. Great article! I love to support sustainable alternatives to looking n feeling great! Nice blue book idea – I’m sure we could create a virtual fashion blue book wow would be huge! It totally should be in-trend to be off trend yet still fabulous :) thx for comments

    Lara from Seattle, WA, United States
  6. As the owner of a e-commerce consignment store and fashion school alumni this was one of the best articles I have ever read. A realistic insight into the buyer and consigners expectations and the fact that nearly all the new players are creating this red ocean. Great read!
    Christina
    Founder
    http://www.designer-vault.com

    christina from Encinitas, CA, United States