Pre-pandemic, the rental and resale retail markets were both heating up naturally as consumers grew more eco-conscious. Subscriptions and memberships were hot as e-commerce steadily climbed and retailers sought ways to build customer loyalty and forge digital-native brands.
Then the health crisis hit. While the rental market has felt the full swing of new challenges from COVID-19, a new wave of budget-conscious shoppers may be a boon for resale. Subscriptions and memberships are benefiting from both a burst in e-commerce activity and new demands for the physical one-stop-shop. Below, RIS examines the current and future states of resale, rental and subscription/membership models and how they are revolutionizing retail in 2020 and beyond.
Second-hand merchandise appeals to three main types of shoppers, sometimes overlapping: those concerned about sustainability, budget-conscious and bargain shoppers, and those who enjoy the thrill of the hunt. The second-hand market is expected to reach $64 billion by 2024, according to thredUP’s “2020 Resale Report,” and the current health crisis doesn’t seem to be a drain on that number.
Half of people are cleaning out their closets more than they were pre-Covid, thredUP reports, and while continuing jobless claims fell to 13.3 million in September, a drop of more than 1.2 million from the previous week, millions of Americans are still unemployed, while many others are tightening their budgets amid uncertainty. Add that to the fact that just over half (51%) of U.S. consumers believe that sustainability is at least somewhat important, while the number jumps to 61% in the U.K., according to a CGS survey in May 2020.
Additionally, one of the biggest changing shoppers habits the pandemic has brought is the surge in e-commerce. Online shopping rose 55% year-over-year to $66.3 billion in July 2020, according to the Adobe Digital Economy Index. While the joy of discovery that brick-and-mortar shopping provides consumers may be tough to move online, second-hand shopping can bring that thrill to the digital space.