Popularity of resale market in Minnesota spills over into holiday shopping

The growing market for secondhand items typically takes a back seat during the holiday shopping season when consumers seek out new items — the latest and hot must-haves — for friends and family as well for themselves.

But as more shoppers, especially Generation Z and millennials, have been gravitating to resale sites, there are signs some are now beginning to also shift their spending on holiday garb, decor and sometimes even gifts to the thrift and consignment market, too.

"I think it's great — it has more of a story to it," said Callie Shehorn, a 24-year-old from Robbinsdale who winces when she thinks back to when she shopped at H&M and other fast-fashion stores as a teenager.

These days, she prefers to buy mostly from thrift and consignment stores to find more distinct and longer-lasting items that don't do as much harm to the environment. So much so that she doesn't hesitate to give and receive secondhand gifts with people like her sister, who shares her love of vintage items.

A crop of newer websites and apps such as Poshmark, ThredUp and the RealReal, where consumers can sell and buy used items have helped give rise to the boom in resale shopping as consumers increasingly go online and to social media for style inspiration and to make purchases.

Minneapolis-based startup Kidizen, a five-year-old online consignment shop for higher-end kids' clothing, has been seeing sales jump 20 to 30% a year. Its business typically slows as the holidays roll around. But this year that dip so far has been less pronounced. Six weeks into its fourth quarter, sales are up 35% compared with the same period last year, said Dori Graff, Kidizen's co-founder and CEO.

"One, there is a growing acceptance of resale," she said. "The other piece of it, too, is holiday outfits — those are the outfits kids wear once and then never wear again. That's another area where we see a lot of activity around this time. The majority of them have barely been worn or have only been worn a couple of hours."

Think holiday-themed pajamas. Dresses made of velvet or with bows and other frills. Sweaters, vests and pants with suspenders.

She added that consumers also have noticed that a number of items — about 15% of the 750,000-plus listings on Kidizen at any time — still have the original tags on them because they were gifts that didn't work out or children outgrew them before they could wear them.

Other resale sites, which are promoting themselves as a place to find different and eco-friendly holiday gifts, say they're also seeing a spike in holiday shopping activity.

The RealReal, the $200 million luxury resale site that went public this year, has said in public filings that a "disproportionate amount" of its revenue and earnings come at the end of the year because of holiday shopping. A company spokeswoman added that the percentage of orders with gift boxes was three times higher during the holidays last year. Searches for items "with tags" has also jumped 19% this month compared to last.

ThredUp, a large thrift site, has introduced digital holiday gift cards for the first time this season as part of its #TheGiftofThrift campaign. The company said its sales this holiday are trending to be 84% higher than last year.

Last year, Poshmark, a peer-to-peer marketplace for secondhand goods, launched a market to highlight gift ideas. Last month, it rolled out a new seasonal decor market for holiday ornaments, wreaths and festive pillows.

In a holiday survey this year by Accenture, 48% of shoppers said they would be willing to give secondhand apparel as a gift and 56% said they would be open to receiving such a gift. Still, analysts note that while this space is picking up momentum, it may still be awhile before giving secondhand gifts becomes more mainstream.

Resale will play a bigger role in the holiday shopping season this year, but probably more because of holiday clothing purchased for special occasions, said Neil Saunders, an analyst with GlobalData Retail.

"I think apparel gifting from resale is happening more than it once did, but I think a lot of people are still reluctant to do it because it still has a bit of a stigma attached to it," he said. "And also, it can be difficult to buy apparel as a gift anyway."

Returns and exchanges are harder in the secondhand market as well, said Naeun Lauren Kim, a professor in retail merchandising at the University of Minnesota.

But Kim said she has seen the resale landscape change a lot in just the last few years. When she surveyed her students this fall, about a third of them said they had bought or sold secondhand items online, a big increase from the handful of students three or four years ago who said they had done so.

"A lot of the younger generation are interested in how they can consume less and are making more use of what they already have instead of shopping fast-fashion brands," she said. "They know that's bad for the planet. They want an option that is affordable, but at the same time, good for the environment. And reselling helps keep the clothes out of landfills."

The resale market has been growing about 16% a year — much faster than the rest of the retail industry — and shows no signs of tapering off, Saunders said. The fast-fashion industry has felt the blow. Forever 21 declared bankruptcy in September because of several factors. Some of the big luxury brands have felt the effect, too, as have department stores that have lost out on special purchases such as handbags, he said.

As department stores have struggled, one of their newer ideas has been to start selling secondhand clothes themselves. Both Macy's and J.C. Penney have partnered with ThredUp in recent months to put mini-shops of used clothes in select stores.

Goodwill has noticed the surge in thrift shopping, too, having just posted one of its best years in a decade, said Brent Babcock, chief sales and marketing officer for Goodwill-Easter Seals Minnesota. Sales in its stores were up 6% in the last year and its e-commerce channel jumped 33%.

The holidays, he added, are the second busiest time of year for Goodwill, after Halloween. Some of its biggest sellers during this time — wrapping paper, labels and holiday decor — are closeout or excess inventory purchased by the pound from major retailers.

The Minneapolis Vintage Market, a monthly pop-up that launched in summer 2018, has been having to find bigger venues as the interest in its events has grown.

But it still usually sells out of spots, with space for only 30 to 60 vendors out of 200 on its list, said Hayley Matthews-Jones, who runs the market. And without any promotion, more than 13,000 people on Facebook have already said they are interested in going to its vintage holiday market next month.

Her market, she added, tends to attract a younger crowd in part because she defines vintage as anything pre-2000 since '90s fashion is very in right now.

"So we're serving a lot more people in their 20s and 30s who are living in the city, who are apartment dwellers just starting to buy sustainably maybe for the first time," she said.

Claire Slocum and Waverly McCollum, sophomores at the University of Minnesota, quickly bonded over their mutual love of thrift shopping when they were randomly assigned as roommates last year.

"We went thrifting a lot together and then realized we had way too many clothes for our small closet," said McCollum. "We were like, 'We get compliments on our clothes all the time, so we might as well sell them.' "

So they started an Instagram account, @a88.thrifts, in which they sell items they have found at secondhand stores. It has more than 700 followers. Not surprisingly, they welcome secondhand gifts, too.

"It feels more sentimental because the person was reminded of you when they found it," McCollum said. "I think that's kind of cool." Kavita Kumar • 612-673-4113