Lululemon enters the fast-growing online fashion resale market

The news: On Earth Day, April 22, lululemon athletica will expand its Like New trade-in and resale program nationwide.

• The program, which is launching after a two-state pilot run last year, allows shoppers to trade in lululemon clothing such as pants, shorts, and jackets for an egift card. The retailer is also featuring an assortment of gently used lululemon items online.
• A number of companies, including Another Tomorrow, Cuyana, Moda Operandi, Target, and Urban Outfitters, have also recently launched resale initiatives by teaming up with a partner, such as technology provider Trove Recommerce, luxury bag and accessories reseller Rebag, or online consignment store thredUP.

More on this: We expect this year to be a banner year for online fashion resale, with year-over-year sales growth of 46.6% reaching $15.50 billion thanks in part to more prominent retailers entering the space.

• Our forecast projects resale’s share of retail ecommerce apparel and accessories sales will rise from 6.0% in 2021 to 10.0% in 2025.

A focus on sustainability: Online fashion resale benefits from consumers’ growing interest in sustainability—particularly among younger consumers.

• Nearly 50% of millennials and 38.4% of Gen Z shoppers consider sustainability “very important,” per a 2021 Composed and MaCher survey.
• The growth in online fashion resale will be driven in part by the growing discretionary incomes of younger consumers, as well as a flood of retailers entering the space. That means there are more used goods available online to attract consumers to resale.
• Resale platforms also benefit from flywheel effects, as buyers become sellers and vice versa.
• We expect annual average sales per buyer via online fashion resale marketplaces will more than double between 2021 and 2025.

The brand advantage: The initiatives by retailers such as lululemon can reassure consumers that the items they purchase are authentic and of a high quality.

• That gives brands an advantage over peer-to-peer marketplaces, said Sky Canaves, eMarketer principal analyst at Insider Intelligence. “Brands can more easily gain consumer trust by guaranteeing the authenticity and condition of their secondhand offerings,” she said. “Resale can also improve relationships with consumers over the long term if brands can offer a consistent shopper experience for both new and used goods.”

The big takeaway: The resale market offers an enticing opportunity for brands to demonstrate their sustainability bona fides at the same time they’re opening up new revenue streams.