Retailers Test Resale Market as Ticket to Acquiring Cost-Conscious Shoppers

Some clothing firms are mulling creative resale partnerships as economic concerns continue to plague the sector.

Slumping sales have clothing merchants, from Big Retail to Main Street, scrambling to make up for lost revenue. PYMNTS research has found that 68% of small retail businesses have compensated by raising prices, and so far that has been a successful strategy. However, that can only go so far when most shoppers are actively seeking deals and discount stores are seeing higher traffic than ever.

For most retailers, consumer-facing innovation has become an essential aspect of the customer loyalty strategy. Common, and successful, approaches have included tools emphasizing efficiency, convenience and payment choice during the check-out experience. Some major retailers are broadening their cross-channel options to include more shopping flexibility with options such as buy online, pick-up in store. However, the eventual collide of deal-seeking and price-rising has led some retailers to think outside the box in meeting the consumer demand for bargains while still maintaining their bottom line.

A few clothing retailers taking a more creative approach in meeting shopper’s budget concerns while still seeking to retain loyalty and are partnering with resellers. Tommy Hilfiger has gotten in on the resale trend by partnering with resale platform thredUP. Under this program, U.S. consumers can send certain clothing and accessories items to thredUP using a pre-paid shipping label. They then receive Tommy Hilfiger shopping credit for any items that thredUP selects for resale.

Amazon is also dipping a few toes in the resale market. In October, luxury apparel and accessories reseller What Goes Around Comes Around took the leap from its Beverly Hills and New York City brick-and-mortar locations to open a storefront within Amazon’s Luxury Store concept. And, earlier this month, “pre-loved” designer apparel platform Rent the Runway entered into a strategic partnership with the eCommerce giant to bring its resale luxury goods to a wider audience.

In a further sign of the potential strength of the resale apparel market, Korean internet company Naver recently announced completion of its acquisition of Poshmark, with the aim of growing the social resale platform globally. The original reselling platform, eBay, has also announced an intentional returning to its roots with a renewed focus on reselling.

Specialized retailers may have opportunities to partner in the resale market as well, and stand out from the competition. For example, bridal fashion resale marketplace PreOwnedWeddingDresses.com moved away from its buyer and seller direct transaction model to the platform handling the transactions. This move is intended to offer more protections to the buyer through secure payment processing and seller through insured tracking.

Retailers, especially in the discretionary sectors, have extra retention and loyalty pressures as customers seek to stretch their income. Creative partnerships such as with resale platforms may help the clothing sector especially appeal to customers’ continued cautious shopping habits while still maximizing their bottom line.