Tariffs create an opportunity for secondhand apparel to gain share

The landscape: The secondhand apparel market is accelerating, with 58% of US consumers shopping pre-owned items last year—a 6 percentage-point increase over 2023. Younger generations are leading the charge, with 68% of millennials and Gen Zers buying secondhand, up 3 percentage points over last year, per ThredUp’s 2025 Resale Report.

• This rising demand has fueled a surge in online resale platforms like ThredUp, The RealReal, and Buffalo Exchange, with the segment growing 22.4% YoY to $25 billion—the second straight year of accelerating gains and the largest jump since 2021.
• Major retailers like Zara and H&M have responded to the increased interest in secondhand goods by expanding their pre-owned offerings, while Walmart’s partnership with Rebag has brought luxury resale to a broader audience.
• More brands are expected to enter the space, as 76% of retail executives without a resale program say they’re considering or planning one—a 2 percentage-point increase YoY.

Tailwinds ahead: The Trump administration’s tariff-driven trade policies are set to push apparel prices higher, making affordability a top concern for shoppers.

• If tariffs push clothing costs higher, 59% of consumers say they’ll shift to budget-friendly options like secondhand, with millennials leading the trend at 69%.
• Retailers are taking notice, with 44% actively working to reduce reliance on imported goods and 54% viewing resale as a stable, predictable supply source amid tariff uncertainty.

GenAI’s growing prominence: The secondhand market is gaining from generative AI’s growing role in consumer shopping. The technology helps shoppers navigate vast pre-owned selections on resale platforms more efficiently, ensuring they don’t feel overwhelmed.

• Personalization, improved search, and AI-driven discovery are making secondhand shopping as seamless as buying new for 48% of consumers. This sentiment is even stronger among younger shoppers, with 59% of Gen Z and millennials agreeing that AI-powered tools enhance their experience.
• Retailers are taking note. Seventy-eight percent have already made significant investments in AI, while 58% plan to roll out AI-driven tools in the next year. As resale continues to grow and affordability remains a top concern, AI-driven personalization and recommendation will be crucial in making secondhand shopping more accessible and driving further adoption.

Our take: Even before this year’s economic headwinds began swirling, secondhand apparel was thriving, driven by greater consumer interest in sustainability. Rising inflation should accelerate its up-and-to-the-right trajectory.