With the rise of companies like The Real Real, ThredUp, Poshmark and more, consumers seem to be moving away from fast fashion and toward a more sustainable way of styling their closets.
A new report from Poshmark provides some clarity to these assumptions. The report, which surveyed 8,000 shoppers in the U.S. and Canada, provides insight into who’s using the Poshmark platform and how different generations are thinking about resale, secondhand and fast fashion. For example, 16.5% of Gen Z closets are made up of secondhand items. Millennials are close behind with 12.5%, Gen X is even higher with 14%, and baby boomers are closing in at 9.5%.
The numbers show this is a turning point for secondhand and resale markets. Retailers like Gap and Macy’s are partnering with resale companies like ThredUp. At the same time, Poshmark reported its 100 millionth order on the platform since its founding nine years ago this month.
“The circular economy is fully in place and in very high velocity,” said Manish Chandra, CEO and founder of Poshmark.
How different generations shop is complicated
While 16.5% of Gen Z closets are made up of secondhand clothes, the next biggest chunk, 15.5%, is made up of fast fashion and then 14% from department stores. The report found Gen Z also loves to shop from companies like Gucci, Adidas and Brandy Melville. Gen Z also informs their style choices in a variety of ways, with 57% influenced by their peers, 40% from celebrities and pop culture, and 33% from social media influencers.
Millennials, on the other hand, love brands like Nike, Madewell and Anthropologie, and have a more diverse closet with 16% made up of value chains, 15% from department stores and 13% in fast fashion.
Gen X closets are 25% composed of value chains and 16% from department stores. They love brands like Tory Burch, Kate Spade and Patagonia.
A huge majority of a boomer’s closet (31%) is made up of value chains, with department stores taking second place at 23%, and they have an affinity for brands like Coach, Michael Kors and Eileen Fisher. Chandra said while resale isn’t a huge majority of every generation’s closet, there’s a chance for department stores and other retailers to start working more closely with resale platforms—since these apps sell these major brands. He believes sustainability, value, experience and social media are four key parts driving the changing dynamic occurring in a consumer’s closet.
“The shopper and the brand ambassador already exist, and the platform like Poshmark is providing a way for these people to evangelize and communicate,” Chandra said. “What’s missing is the brand themselves.”
As Chandra explains it, with luxury brands that certain generations have an affinity for (think, Gen Z and Gucci) a secondhand platform allows them to try the items at a more affordable price point. It’s on brands to figure out how to capitalize on this moment.
“We’re making it much more accessible,” Chandra said. “You’re mixing procurement. Purchasing is more of an experience versus a real purchase.”
Another area where brands and retailers can connect with customers is by understanding the new life cycle an item can have. On Poshmark alone, 76% of users think about a product’s resale value before buying it; 92% of users sell an item they can’t return online. So, while an item may be out of season for a retailer, it can end up having a longer life cycle on a resale platform where people buy from complete strangers. According to the report, 75% of people surveyed are “comfortable” buying an item from someone online.
“There’s a life cycle of that garment, and resale is taking that life cycle and extending it further,” Chandra said. “Where you’re seeing the Poshmark shopper and particularly the Gen Z shopper, peer-to-peer shopping, social shopping is going to be the dominant form. Brands in most cases are missing from that conversation.”
Poshmark continues to grow
Thirty-eight million items are shared every day on Poshmark. Twenty-two percent of sellers are full time and 88% of daily shoppers are repeat customers.
Poshmark’s study found its customers to be a geographically diverse group, with 40% living in small- to medium-sized cities, 34% from suburbs or rural areas and 26% living in major cities. Thirty-seven percent of Poshmark’s customers live in the South, while 35% of sellers do.
Poshmark’s continued growth, according to Chandra, is a process that took time to develop. He said sellers and buyers are shopping and using the platform for sustainability, value and the “growing sense of entrepreneurship and empowerment.” What the study really shows, he said, is that the future of retail revolves around social shopping and social commerce.