Online Thrifting Sees Silver Lining In Supply Chain Crisis



(Bloomberg) – As branded retailers nationwide struggle to fill shelves, a host of online platforms that market second-hand merchandise are poised to profit generously from the chain crisis global supply.

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Products for sale on sites such as The RealReal Inc., a members-only consignment marketplace for luxury goods, or Poshmark Inc., a mobile app for second-hand clothing, are already manufactured and can be found in stores. people’s closets. This allows them to largely avoid saved ports and freight transport, and more importantly, they are currently available.

“Many retailers are grappling with supply chain disruptions, presenting consumers with limited stock and higher prices,” said Anthony Marino, president of online high-end thrift store ThredUp Inc. In contrast, “100% of our items are already in stock and ready for use. to ship, with new items added every hour, ”he said.

Consumers are facing terrible warnings for their holiday shopping early this year, especially if they plan to do so online. Bottlenecks in the global supply chain pose a new challenge to the e-commerce industry, and out-of-stock items are a growing concern. According to Adobe Inc., which tracks online commerce, “out of stock” messages on retailer websites are up 172% from a year ago. And many companies are reporting that supply will remain tight until the end of the year, opening up the opportunity for second-hand retailers to take advantage as consumer demand is high.

“This may be the perfect scenario for resale, which relies on inventory already in the seller’s hands,” Roxanne Meyer, analyst for MKM Partners, wrote in a recent market report. “We believe Poshmark and the resale industry are well positioned to gain market share in the fourth quarter as supply chain issues persist.” With logistical constraints hitting nearly every category and retailer nationwide, sales of new products are likely to be restricted, she said.

Adobe is forecasting a record $ 207 billion in online spending this holiday season, and reseller companies are banking on sharing the loot. This year’s second-hand online retail market is expected to exceed $ 65 billion, an all-time high for the industry, according to a survey by Mercari, a second-hand e-commerce site. Mercari’s report showed that three in four respondents said they were likely to buy at least one second-hand item this holiday season.

The second-hand goods market took off long before Covid-19 sparked record consumer demand, leading to shortages and backlogs around the world. Recycled clothing and accessories have been sold online for decades, but in recent years, peer-to-peer platforms such as Poshmark have made it much easier for buyers and sellers to connect. This has helped make reselling a lucrative part of the concert economy. Consumers, mostly younger, are also drawn to second-hand items for their lower prices and reduced impact on the environment.

Second-hand retail purchases in the United States are at an all-time high, with 63% of the population having sold at least one second-hand item in the past year, according to Mercari.

The biggest online retailers are also trying to get into resale. Etsy Inc. bought UK online platform Depop in July, to tap into a younger, more social media-savvy demographic. Since the announcement of the $ 1.6 billion deal, Etsy’s shares have jumped 48%.

Several of the second-hand retailers made dazzling public action lists this year, but have since seen enthusiasm for their stocks wane amid market concerns that people will return to in-person shopping as markets continue to buy. Lock orders have relaxed and stores are reopening. Poshmark, for example, gained 142% on its trading debut in January, but its shares have since fallen 76%. ThredUp, which offers clothes to borrow or buy, also underperformed initial expectations after its IPO in March, jumping 43% on the first day of trading before relinquishing most of those gains in the first. month.

RealReal has faced a similar rocky path since its IPO in 2019 and is down 36% this year. Now analysts estimate revenue will rise significantly in the fourth quarter, predicting the San Francisco-based company to earn $ 129 million, up 53% from the previous year. The RealReal – along with its competitors Etsy and ThredUp – will release its third quarter results in early November. If companies give optimistic forecasts for the rest of the year, this could be an opportunity for stocks to regain lost ground.

Concerns that consumers would return to in-person shopping as the virus wears off have not yet subsided. A recent UK retail sales report showed store sales remain weak.

Annie Roberts, a 22-year-old Depop seller and buyer from New York City, said she would likely turn to the online market instead of relying on first-hand retailers. “I tend to prefer Depop because I don’t have to worry about stockouts,” she said. “If I see something on a friend, on an influencer, or even in another store, I know I can probably find someone selling it on Depop or at the very least something similar.”

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