By Mark Seavy

Secondhand product sales are rapidly expanding across brick and mortar, with more than 200 brands having announced programs for selling reconditioned or “lightly used” products in stores.

And while suppliers are clearly investing in the business, the level of buy-in from consumers remains unclear. For example, ThredUp—which operates the leading online resale platform for apparel, shoes, and accessories—recently reduced its sales forecast.

The company previously forecasted the total global secondhand market would reach $350 billion in sales by 2027 but it has since revised that to $324 billion. The most recent forecast for the U.S. market was $69 billion, which is down from a prediction two years ago that sales in the region would hit $82 billion by 2026.

And more than half (55%) of consumers surveyed by ThredUp plan to spend more on used clothing this year. But, at the same time, 44% of those surveyed said they were cutting back on clothing purchases overall due to higher prices.

These revised forecasts are largely tied to tighter consumer spending in the face of ongoing inflation, but they haven’t dampened suppliers’ enthusiasm for entering the secondhand business.

This is, in part, due to the potential connected to secondhand sales of premium items. ThredUp, which has installed resale platforms for more than 40 companies, including retailer H&M, has shifted its apparel offerings to be “incrementally more premium,” CEO James Reinhart said. ThredUp has seen increases in items purchased and revenue per customer, he said, even as “budget shopper remains on the sidelines.”

The sales potential in some cases, however, appears secondary to the appeal of meeting younger consumers’ interest in sustainability and recycling. Footwear supplier New Balance, for example, weighed entering the resale market for several years before launching its “Reconsider” business in February both online and through eight of its 30 company-owned stores.

Under the program, New Balance products that have either been worn (or are unsellable as brand new because of slight imperfections) are given a second chance. The products are inspected and reconditioned by Tersus Solutions and cleaned if necessary. The footwear is also given a grade to help consumers understand its condition. The shoes can be traded in through the mail or in-store drop off and consumers receive a voucher on eligible trade-ins that can be used toward another purchase. The vouchers are based on the seasonality and the product’s condition.

There are no immediate plans for selling the reconditioned footwear outside New Balance’s eCommerce business or the company-owned stores, said Chuck Mauro, Global Direct Brand Strategy & Creative at New Balance.

“The first thing we heard [after launching Reconsider] was that it not only reflected our values but those of our customers,” Mauro said. “The big question is where we can bring that experience outside of the platform. We know that we have touched consumers’ values but, operationally, there are a lot of things we still need to figure out. But we know that consumers value resale.”

H&M, which launched H&M Pre-Loved online last year, has moved the resale business into some of its brick-and-mortar stores. When H&M opened a new flagship store in New York earlier this year, secondhand apparel had a separate section in the 7,000-square-foot location. In doing so, H&M tapped vintage fashion seller James Veloria to curate clothing and accessories for the secondhand assortment, which includes coordinated outfits as well as single pieces.

“Secondhand really is at the intersection of what our brand proposition is,” said Linda Li Steiner, Head of Customer Activation & Marketing at H&M. “It is huge with younger customers because it offers self-expression. Secondhand shouldn’t be a huge amalgamation of clothing that makes no sense together, but rather a more curated selection.”

Those curated collections raise the prospect of competing with full-price items in company stores and other retailers. However, some industry experts have dismissed that concern, noting that designers will differentiate between the categories in the same way company-owned stores avoid competing with third-party retailers through the use of unique designs and exclusives.

“We are trying to be really focused on storytelling and merchandising,” said Melissa Worth, VP Americas at New Balance, which has 85 outlet stores and 60 franchised locations in addition to its 30 company-owned, full-price stores. “Wholesale was our predominant business but as we grow our store footprint, we are learning how to be retailers. We need to reach younger consumers and one of things that is needed is our secondhand business and a format that is informed by our customers.”