Nearly Half of High-Income Consumers Purchased Secondhand Products in 2023

Despite the monthly inflation rate staying below 4% from June 2023 to November 2023, stagnant wages and rising prices have prompted consumers to adjust their purchasing habits.

The conservative approach to purchases is evident, with 60% of retail consumers cutting down on nonessential spending, as detailed in “Persistent Inflation Rekindles Consumer’s Interest in Secondhand Markets,” the latest installment in the “Consumer Inflation Sentiment” series by PYMNTS Intelligence.

The findings indicate that consumers gauge inflation based on the cost of goods rather than the overall inflation rate. Consequently, despite inflation fluctuating between 3% and 3.7% in the latter half of the year, consumers perceive prices as high and are seeking more affordable alternatives.

Against this backdrop, one notable trend that has emerged is the growing popularity of secondhand retail. Consumers report saving between 30% and 35% by shopping at secondhand retailers.

The study reveals that 43% of consumers purchased a secondhand product in 2023, with high-income consumers being the most likely to make such purchases.

Additionally, younger and more affluent individuals reported making more secondhand purchases, indicating a shift in consumer behavior. Meanwhile, those who typically buy secondhand clothes are usually older and have lower incomes.

Furthermore, high-income consumers don’t usually buy secondhand clothes but prefer secondhand options for furniture and electronics, often using various platforms like social media and dedicated marketplaces.

Meanwhile, a separate PYMNTS report examined the broader challenges facing resale initiatives, which often requires significant upfront investments, operational costs, marketing efforts, and inventory acquisition.

In an uncertain retail environment, where numerous brands are grappling with declining sales and narrow profit margins, committing to these resale ventures can pose a considerable risk.

The report also highlights the need for brands and retailers to weigh the potential drawback of cannibalizing their primary sales channels: “By promoting resale, they run the risk of diverting customers away from purchasing new products at full price.”

However, resale is working for some retailers. Despite the challenging retail landscape, REI’s online business, launched in 2018, witnessed an almost 100% surge in 2023 compared to the previous year. This remarkable growth was, in part, driven by the demand from millennial customers who preferred renting or acquiring used gear over purchasing new items.

As Ken Voeller, REI’s Manager of New Business Development and reCommerce remarked in 2020, “Our reCommerce business continues to exceed our expectations. We see [it as] an opportunity to introduce our members to more outdoor activities through lower priced products.”