December 3, 2020

Resale is the New Black

The post-shutdown surge of secondhand shopping
By Craig Manning | Sept. 12, 2020

It’s a common tradition at this time of year: parents flocking to clothing stores in the last weeks of summer to get their kids new duds for back-to-school time. But what happens when the economy is in shambles, when many people have been out of work since March, and when the return of in-person, face-to-face schooling is a tenuous proposition at best?

For many parents the answer has been simple: Skip the name-brand apparel retailers and hit up secondhand clothing shops instead.

Jen O’Brien owns Once Upon a Child, a shop in Traverse City that “buys and sells gently used kid's clothing, shoes, toys, and baby gear.” According to O’Brien, the store has rarely seen as many new faces as it has over the past few months.

Customers who might normally shop for their kids at stores in the Grand Traverse Mall have found their way across the street to Once Upon a Child instead. O’Brien believes the pandemic is the primary reason. She says that, with some parents out of work and with less discretionary income, more families are choosing to save a few dollars by giving secondhand stores a try.

CONVERSION THERAPY
Secondhand-store owners are betting that the sudden need to save money will transform first-time customers into loyal customers of shops like Once Upon a Child, simply because it’s helping shatter some of the preconceived notions that people have about secondhand stores and the products they sell.

“A lot of people have commented about the [good] condition of the clothes, or about how new everything looks,” O’Brien said. “They wonder why they haven’t been shopping like this all along.”

If that’s the consumer takeaway, then it’s more bad news for major apparel retailers in a year that has already brought plenty. According to the retail consultancy group Wood Mackenzie, sales “at apparel and apparel accessory stores” in the United States were down 87 percent year-over-year in March, and 63 percent in May. The bad year has led more than a few apparel retailers to declare bankruptcy in 2020, including J.C. Penney, J. Crew, Tailored Brands (the parent company of Men’s Wearhouse and Jos. A. Banks), and Neiman Marcus — to name just a few.

That’s not to say the pandemic hasn’t impacted resale or consignment stores. As part of the stay-at-home order, these businesses — like many others — were forced to close their doors for several months in the spring. Since then, customer behaviors have shifted slightly. At Once Upon a Child, O’Brien says her customer count is down, but the average size of transaction per customer is up. Instead of stopping in “just to browse” or to buy an item or two, parents are shopping more purposefully and deliberately. Average transactions these days tend to land in the $200 to $300 range, and some have been over $1,000.

“It used to be, ‘Oh, I have a reservation at Olive Garden; I’ll stop in and have a look around.’” O’Brien told Northern Express. “Now it’s ‘We have a babysitter for an hour; we have our list of what we need; we’re going to buy everything for our six kids at one place.’”

NICHE DEMAND
Another major driver for Once Upon a Child has been the store’s COVID-19 mask inventory. O’Brien has been vigilant about keeping kid-sized (and kid-themed) masks in stock, knowing that, if schools start and maintain in-person learning, parents will likely need to have 3–6 masks per child. (For K–12 students, the CDC recommends that masks be washed after every day of use.) O’Brien says even keeping masks in stock has been a challenge; she recently ordered another 3,000 to keep up with demand.

Local resale shops have dealt with other pandemic aftershocks, too. A major one was the influx of inventory that came in after stay-at-home orders started to lift and business was able to resume. Charlette Steinhebel, who owns The Roost Consignment Boutique in Suttons Bay, says that many customers took the shutdown as an opportunity to do some extensive spring cleaning. As a result, many people were armed with lots of items ready for consignment when The Roost reopened.

“I would say that a lot of people had cleaned out and organized over the couple of months that the stay-at-home order was in place,” Steinhebel said. “I heard from many consignors that they were cleaning out closets, garages, attics, and more.”

Once Upon a Child has seen the same trend. O’Brien says her store normally buys about 1,000 items a day for resale. After the stay-at-home order lifted, that number just about doubled.

MARIE KONDO EFFECT
The “spring cleaning” pattern ties into a larger trend that resale shops across the nation have experienced in the past several years — a trend that has been labeled as “the Marie Kondo Effect,” after the famous author and TV show host who has written multiple books about organizing. In January 2019, Kondo reached a wider audience with the Netflix series Tidying Up with Marie Kondo. Kondo spends each episode of the show working with American families to declutter their homes.

Kondo’s strategy for organization is known as the “KonMari” method, which involves gathering one’s belongings and getting rid of anything that doesn’t “spark joy.” In the weeks following the debut of the Netflix series, TODAY reported that Kondo’s viral fame was inspiring people across the country to declutter their households — and triggering big business for resale stores as a result. One Goodwill donation center in Washington, D.C. tracked a 367 percent increase in donations, compared to the same time the previous year.

“When Marie Kondo’s Netflix special came out, we got a ton of people coming in [to sell us stuff],” O’Brien said. “She’s been very good for business.”

More donations or consignments, in turn, can pave the way for more people shopping secondhand. Steinhebel says that, in many cases, the customers who visit her shop for the first time to consign “end up becoming frequent shoppers.” Just as the pandemic has led some parents to discover the quality of the lightly-used kids clothes at Once Upon a Child, Steinhebel believes the increase in consignments at The Roost in recent years has clued shoppers into some of the treasures that might be hiding on the racks of a resale shop.

“Customers prefer to purchase higher-end brands secondhand than something lower quality that is new from a store or online,” Steinhebel explained. “There are those who maybe can't afford a cashmere sweater new but can buy one from The Roost at an affordable price. Customers also like to shop consignment because of the unique items they find. A lot of times, items like furniture and décor are older. Antique and vintage is very common too, and some people prefer older items so as to have something one-of-a-kind, or something you can’t find in every store.”

MOTHER EARTH LIKES RESALE
There’s also an environmental side to secondhand shops. There has been backlash in recent years against the idea of “fast fashion,” or clothing manufactured quickly and cheaply (and sold at a low price) to capitalize on the latest fashion trends. The affordability and trendiness of fast fashion has led to a gradual increase in the amount of clothing that the average person buys, owns, and ultimately, tosses.

According to McKinsey & Company, the average person was buying 60 percent more clothing in 2014 than they did in the year 2000 — and keeping those garments for half as long. The trend has been accompanied by an increasingly alarmingly environmental cost. Per the Ellen MacArthur Foundation, textile production uses approximately 93 million cubic meters of water per year, contributing to global water scarcity. Fashion production also relies on huge quantities of oil, fertilizer, and dye — non-renewable resources that often pollute water sources and negatively affect natural ecosystems.

Steinhebel says she often has conversations with her customers about fast fashion. The average consumer, she thinks, is increasingly cognizant of how cheaply-made most clothing is — and of the fact that buying higher-end secondhand items can actually net a higher return-on-investment. She also thinks more people are concerned about the environment now than they were in decades past.

“The role that consignment stores play in the environment is great,” Steinhebel said. “Instead of throwing perfectly fine items away, people bring in their items, and we offer them for sale. If those items sell, the person get some cash, and the item goes home with someone who needs or wants it. Several people benefit just from the one transaction, and sometimes the item goes through hands several times before it's recycled or thrown away.”

SECONDHAND MISSION
Sometimes, there’s even a moral imperative to offering the affordability that resale shops can provide. Such is the case with Challenge Mountain, a nonprofit organization based in Boyne City that works to ensure that individuals with disabilities have access to outdoor recreation activities. The organization is partially funded by the Challenge Mountain resale store, which relies on donations from the community (of items like clothing, furniture, and jewelry) to stock its inventory. In addition to the broader mission of the nonprofit, Challenge Mountain Executive Director Elizabeth Looze says the resale store plays an important role in meeting the needs of lower-income families in and around Boyne City.

“We kind of think of it as being a secondary mission to the organization, which is to provide low-cost clothing, household items, and furniture to our community,” Looze said. “25 percent of Charlevoix county kids are on free or reduced lunches — or at least they were before [COVID-19]. So, that’s 25 percent of our population that is essentially living at the poverty level or below.”

All these factors together have helped turn secondhand into a hot market. At Challenge Mountain, Looze describes recent years at the resale shop as “going like gangbusters,” with annual sales revenues of over $400,000 — most of it “excess revenue” that Challenge Mountain has been able to channel to its nonprofit efforts and programming.

The pandemic has dampened business slightly, though. O’Brien expects she’ll be relatively flat to last year in terms of sales and revenues, with big summer and fall transactions helping make up for several months of lost revenue during the stay-at-home order. Challenge Mountain has tracked an average per-year growth rate of 12 percent since 2016 but is down 15 percent from last year in terms of resale revenues. And at The Roost, Steinhebel is down about one percent, compared to the 10 percent growth she was expecting in 2020.

Still, despite the slowdown, O’Brien expects things will turn out OK in the end. One of the great things about the secondhand resale industry, she says: “It’s recession-proof.”

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