Retail Resale Brands Expand in SoCal

Resale brands are expanding in Southern California. Consumers are beginning to focus more on value in retail purchases, and the trend is driving the growth of brands like TheRealReal and ThredUp, consignment and second hand shops. These brands specifically appeal to the Gen Z demographic.

“As we face a potential economic shift, consumers across the price spectrum are more and more focused on value propositions,” Mike Rielly, SVP and managing principal at SRS Group, tells GlobeSt.com. “As such, the category of resale brands has emerged and grown to a point where buyers can still consume at an aspirational level but stay within their budgetary needs. Another factor driving the growth of resale is the increasing influence of gen Z as this generation is more likely to consider sustainability to be an important factor in making a purchase.”

The environmental impact of fashion is an important trend driving growth in the resale market. ThredUp, for example, focuses on clothing waste on its website. “This is satisfied by environmentally friendly brands but even more so by the growing resale market,” says Rielly. “For example, online resale brand ThredUp states up front on its website that ‘fashion is the second most polluting industry in the world behind oil,’ adding that we throw 26 billion pounds of clothing into global landfill every year. According to statistics, more than one in three gen Zers will buy secondhand in 2019,” says Rielly.

While these brands are growing, they are only having a minor impact on retail leasing activity. “It’s not because they are not significant, it is just that the size and scope of Southern California’s retail market is so massive,” says Rielly. “It is the macro economic trends that are impacting our retail environment. Retail in general is far more impacted by e-commerce encroachment, global economic trends and wage/salary growth, than by resale brands taking away business.  Those retailers that design/manufacture/buy and price well and meet the supply/demand curve of their customer profile will generally fare well.”

As the concept expands, resale brands are also experimenting with new models, according to Rielly. “We are seeing more and more established retail brands experiment with new models that include pre-owned and rental markets,” he says. “For example, Stella McCartney launched a partnership with The RealReal in 2017, offering a credit to consumers consigning her products on the platform. These brands like others are working in partnership to make a positive impact and advance shared values: sustainability and the promotion of a circular economy in luxury fashion. So rather than let the resale brands take away market share they are working alongside them.”