How Do Resale Brands Add to a Tenant Mix?

Resale brands are expanding—and they can be a good fit for most retail properties. Mike Rielly of SRS Signature Group says that landlords should consider the tenant mix, demographics and product and price-point of the resale tenant before inking a deal with one of these companies.

“Why would a landlord want to sign a resale brand, and where are they a good fit?

Resale brands can be a good fit in most centers, but much of the fit will depend on the type of merchandise offered, price points, store look/build out and sales productivity,” Rielly, SVP and managing principal at SRS Signature Group, tells GlobeSt.com. “All those factors have to fit within the adjacency mix and overall branding of the particular shopping center.”

Resale brands should also be analytical and strategic about their brick-and-mortar retail location. “We’ve already seen a number of online resale brands jump to brick and mortar,” says Rielly. “In some cases, these brands have already established an online consumer following which makes them a strong consideration for retail centers. Brands such as Blue Nile, an online jewelry retailer, and The RealReal, a growing online luxury consignment, offer both online and brick and mortar shopping options. We will also soon see more global resale brands make their way into the US retail scene.”

Younger consumers are driving the success of these brands, but their future success will depend on the buying culture. “Their future impact is formidable. According to McKinsey in its State of Fashion report, the views of gen Z and millennial consumers are critical,” says Rielly. “Together, these cohorts represent around $350 billion of spending power in the United States alone (approximately $150 billion spent by Gen Z and around $200 billion by millennials); additionally, Gen Z will account for 40 percent of global consumers by 2020.”

While the future of these brands—and whether this is a short trend or not—is unknown, the future lies in the hands of younger consumers, who have a huge impact on the retail market. “This is hard to say as everything is cyclical,” says Rielly. “But when you consider the impact and evolution of millennials and gen Z and how they perceive consumerism in combination with better resale brands that are coming to the forefront, the resale trend could possibly stick around for a while.”