Competition from online resale players has never been a concern for Crossroads Trading, which entered its 34th year in business in October and today operates 39 stores across the US.
According to the company’s director of marketing, Gina Nowicki, e-commerce just can’t match the experience of secondhand shopping in person.
“We have not stepped into digital and that’s been intentional,” she said. “We really have doubled down on being brick-and-mortar because people really appreciate showing up in a store [and] shopping while they’re selling their clothes.”
The emergence of fast-growing online players like The RealReal, Depop and Grailed has helped drive a boom in designer resale over the past decade. But while these companies have attracted much of the attention and investment in the industry, the time-tested business of brick-and-mortar resale has carried on, even thriving in the US in recent years as more shoppers embrace buying their fashion used. The National Association of Resale Professionals estimates that the number of shops dealing in resale and consignment has grown by 7 percent in the past two years.
The market is attracting international players like Japanese chain 2nd Street, which has opened 39 stores in the US since arriving in Los Angeles in 2018 and plans to reach 100 stores by the end of 2028, and even some online players are seeing the benefits of bricks-and-mortar. In an earnings call in November, The RealReal’s president and chief executive, Rati Levesque, singled out physical retail as a key growth opportunity and said the company plans to continue opening three stores per year in key markets.
Physical shops still have their advantages and can offer convenience, curation and customer service that aren’t easily replicated online. The challenge they face isn’t so much about keeping up with the times, which will likely see more growth in resale as shoppers squeezed by rising prices and economic pressures look for more value in their purchases. It’s figuring out how to survive in a hyper-competitive landscape.
“The biggest struggles have been [consumers] having so many different stores and options,” said Dom Marlowe, the general buying manager of the heritage California secondhand resale chain Wasteland. “How do we distinguish ourselves as a standout in the business?”
Touch and Feel
Fashion content creator Mark Boutilier said that 70 percent of his wardrobe, which is full of the type of designer labels found on Ssense, is secondhand clothing, and despite the availability of used designer clothing online, he prefers to shop for used clothing physically. Part of that is due to him being based in New York, where there’s so much inventory that local resale stores can feel like off-price luxury shops.
“A sample sale happens and then all of a sudden [a resale store like] 2nd Street looks like the Balenciaga store the next week,” said Boutilier. “Nowadays, there’s so much access here that it’s like, why not do it in person?”
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Brick-and-mortar stores serve the need of customers to see, feel and try on garments before buying them, which matters when dealing with used clothing that may have wear and tear that can be difficult to convey in photographs or a text description — or which resellers may just neglect to mention. They can also have the same “treasure hunt” feel that has helped fuel the success of off-price businesses such as TJ Maxx.
Beyond these factors, Boutilier noted that some businesses have stayed competitive by speaking to a specific clientele or community. It creates an opportunity to deliver a more personal and curated experience than what customers may find online sifting through endless listings with keyword searches.
One of the specialties at Wasteland, which Marlowe said has a reputation for selling high-end secondhand items, is denim — a category where it can be hard to get the perfect fit online — particularly vintage “orange tab” and “big E” Levi’s.
“Getting to try those items in person is so crucial, but you’re also being helped by one of our trained sales associates to help you find everything that you need and give you background on these pieces,” said Marlowe.
Luke’s, a menswear resale boutique that operates two stores between Los Angeles and New York, has also found in-person resale to be key to acquiring new customers who might be new to buying high-end secondhand designer or luxury. Owner Luke Fracher promotes his stores online (and also sells via e-commerce) but they remain destinations for people who want to come see his stock in person.
“For those customers it’s important because it allows them to come in, ask questions, try things on, feel the fabrics, and understand what they’re getting themselves into,” said Fracher.
Immediacy and Convenience
Shoppers are only half the equation. Resale businesses also depend on sellers for inventory, and the convenience that physical locations provide to those looking to offload used clothing can be another draw. Unlike selling on peer-to-peer platforms such as Grailed or Depop, they don’t need to do the work of photographing, listing and shipping items, and while some sites will handle those tasks, getting paid can still take time.
“They don’t have to wait for an item to be shipped for them to be given a payment or wait 30 days. They get paid that day in person,” said Marlowe of Wasteland.
Sellers also tend to know exactly how much they’re getting up front. While online options may let sellers set their own prices, Jessica Pruitt, Buffalo Exchange’s assistant marketing manager, believes resale and consignment platforms can be unclear about the exact payouts they’ll receive after a sale.
“We pay either 25 percent in cash or 50 percent in store credit of our selling price, and we tell people what that selling price is on the spot,” said Pruitt.
Though online options have the edge on being available everywhere, at any time, physical secondhand stores are doing their best to meet their customers and sellers where they are. The RealReal positions stores in areas where its consignors live, rather than focusing on traditional prime retail hubs. Buffalo Exchange opens stores near universities or other clothing resale businesses. Nowicki at Crossroads added that stores can also be tailored to address the local communities they’re based in.
“We’re actually buying from the people in that community,” said Nowicki. “Each store can reflect that neighbourhood and what that city is looking for.”
A Sustainable Business
Physical resale isn’t immune to the problems hitting other parts of the retail industry. Both emerging secondhand boutiques and longtime players have faced headwinds. Pruitt said Buffalo Exchange had 50 stores before scaling down to 41 because of the pandemic. Fracher previously served as a partner in Round Two, a popular network of streetwear brick-and-mortar resale stores that shuttered many of its locations since its peak in the late-2010s.
As the number of resale businesses grows, both online and off, companies are increasingly competing for customers and inventory in an industry that can be burdened with high costs and thin margins.
Yet resale businesses are confident about the future because of how the culture around secondhand has changed. Not so long ago, many consumers would have only considered buying used out of necessity.
“A lot of people had never even thought about buying secondhand clothes or making money by doing it,” said Fracher, who believes the popularity of Round Two in streetwear circles helped usher in a cultural shift for its customer base.
While stores such as Wasteland, Crossroads and Buffalo Exchange address a broad range of customers, many report that they’re increasingly serving a Gen Z shopper who’s becoming invested in used clothing to pursue both individuality and a sustainable lifestyle.
“We’ve gone from that place of secondhand being stigmatized to becoming a point of pride,” said Pruitt. “There’s also such a surplus of clothing out there now and that has made a huge place for the secondhand market. I see that continuing to grow and each individual competitor is good as a whole for everybody.”
