The business case for resale becomes increasingly compelling with each passing year, particularly as the technology that powers secondhand programs gets smarter and more efficient. It’s true that resale has a positive impact on brands’ carbon footprints, but did you know it also drives significant new revenue and creates a new avenue for customer acquisition?
Read on to discover how Archive’s brand partners are relying on resale as a new channel for profitable growth, and why implementing resale in 2025 is good for business and the planet.
- Cost-Conscious Consumers: Following the pandemic and the onset of high inflation across the world, consumers of fashion and other retail goods are increasingly cost-conscious. Potential new tariffs in the year ahead could further increase the cost to produce and import goods, making it more difficult to keep prices low. To reach cost-conscious consumers, retailers need to capture the attention of the shoppers who prioritize value over brand name or design. One way of doing so is expanding resale or off-price offerings, according to McKinsey’s 2025 State of Fashion report. Resale is especially appealing to consumers who are looking for high-quality products at a lower price point. At the same time, shoppers continue to value the “treasure hunt” shopping experience, which allows them to find styles that don’t match exactly what their peers are wearing.
- Customer Acquisition: Archive data shows that as many as 66% of resale customers are first-time shoppers with brands. In other words, more than half of customers get introduced to new brands through resale, often because it allows them to shop with a retailer that they love at a lower price point. Further, the cost of acquiring those new consumers is lower than other strategies. Our team of experts, who work directly with brands to execute their resale programs, found that the return on advertising spend is 4x higher for resale than for full-price items.
- Revenue Potential and Strong Margins: Unlike a full-price business, resale doesn’t require design teams or production management. All of the goods have already been produced. As a result, the total investment cost of resale is quite low, resulting in better margins and strong revenue potential. At Christy Dawn, for example, net revenue from the Regenerates resale program is over 30% higher than the retail store Christy Dawn previously had in Los Angeles, and the margins from resale are also higher than their full-price ecommerce business.
- Validation of Quality: It’s no secret that ultra fast fashion brands are delivering products that fall apart after a few washes, which takes away from consumers’ perception of the retailer. Any brand that can resell items again and again is standing behind its commitment to quality products that are worth investing in. At The North Face, for example, product offerings include secondhand sportswear and items from REMADE, a collection one-of-a-kind, hand-repaired of items like puffer jackets and fleece layers. The REMADE collection proves The North Face produces fabric that’s built to last for generations. Macroeconomic pressures are “fuelling growth in segments with strong value-for-money perception, such as resale,” according to McKinsey. The perception among consumers is that they get more value from resale purchases.
- Waste Diversion & Compliance: New legislation in California and Europe will require fashion brands to manage their own textile waste rather than relying on charity shops and governments to take responsibility for it. It makes more business sense than ever to generate revenue by reselling your products rather than sending them to landfill and risking government penalties. Further, the recent fire at Kantamanto market in Ghana, combined with the sea of unwanted clothing donations in Los Angeles, prove that there's an international overconsumption problem that needs addressing.
Looking to launch a scalable, profitable new revenue stream for your brand in 2025? Looking to reduce textile waste and carbon emissions? Reach out to our team at info@archiveresale.com
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