Table of Contents
Executive Summary
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- Market overview
- Top takeaways
- Pride of ownership is decreasing
- Retailers need to offer frictionless circular shopping options
- Consumers need reassurance they won’t forfeit quality for value or sustainability
- What’s next
Market Perspective
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- The circular market is growing in popularity and competition
Category Interest
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- High cross-category interest signals potential for the market to grow
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- Figure 1: Category interest – NET any interest, December 2019
- Infrequently purchased items are the point of entry for the rental market
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- Figure 2: Category interest, December 2019
- Thrifty nature of women piques interest in secondhand
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- Figure 3: Category interest – NET any item, by gender and age range, December 2019
- Multicultural consumers’ dual interest in trends and savings, piques interest in rental and resale
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- Figure 4: Category interest – NET any item, by race and Hispanic origin, December 2019
Market Factors
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- Mintel Consumer Driver – Value: Consumers continue to seek budget-friendly options
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- Figure 5: Budgeting behaviors, Mintel Consumer Drivers Survey, July 2019
- Mintel Consumer Driver – Surroundings: Informed consumers prioritize sustainability to protect their environment
- Mintel Consumer Driver – Identity: The sharing nature of circular options appeals to community-driven consumers
Key Players – What You Need to Know
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- Partnerships allow retailers and consumers to explore circular options in a less risky way
- Circular retail options introduce a new set of challenges
- Interest in renting and reselling will expand to new categories
What’s Working
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- Partnerships allow retailers and consumers to explore circular options
- Blurring the lines between retail and resale
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- Figure 6: thredUP Instagram post, October 2019
- Figure 7: The RealReal Instagram post, October 2019
- Retailers remain relevant with rentals
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- Figure 8: Rent the Runway email campaign, January 2020
- Rent the Runway on a quest to free up space for consumers: at home, in their closets and on the road
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- Figure 9: Rent the Runway Instagram post, December 2019
What’s Struggling
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- A unique retail method creates unique challenges
- Logistical challenges
- Battling fakes and dirt
What to Watch
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- Untapped categories provide room for rental market expansion
- The future of beauty will include resale
- Social communities fuel ongoing interest in secondhand
The Consumer – What You Need to Know
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- Awareness isn’t an issue, as nearly 40% have already tried some circular options
- Circular options appeal to consumer desire for experimentation and value
- Consumers’ quest for quality raises questions on cleanliness and authenticity
Item Ownership and Acquisition
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- Analyst Perspective:
- Nearly four in 10 consumers already engaged in circular ownership
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- Figure 10: Item acquisition – NET any item, by generation, December 2019
- Consumers looking for thriftier ways to shop everyday clothing and investment pieces
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- Figure 11: Item ownership and acquisition, purchased secondhand, December 2019
- Rentals allow young adults to try trends and avoid shopping
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- Figure 12: Item ownership and acquisition, by gender and age, December 2019
Retailers Shopped
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- Analyst Perspective:
- Consumers shop around, based on differentiated meanings of value
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- Figure 13: Retailers shopped, December 2019
- Communal marketplaces attract young shoppers
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- Figure 14: Etsy holiday commercial, November 2019
- Figure 15: Retailers shopped, by age, December 2019
Reasons for Shopping Alternative Options
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- Analyst Perspective:
- Flexibility and sustainability have widespread appeal
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- Figure 16: Reasons for shopping alternative options, December 2019
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- Figure 17: Rent the Runway email campaign, December 2019
- Gen Z values freedom and eco-impact
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- Figure 18: Reasons for shopping alternative options, by generation, December 2019
- Ability to experiment and experience is dually appealing
Motivations to Shop Alternative Options
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- Analyst Perspective:
- In digital age, consumers need a frictionless experience to consider shopping
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- Figure 19: Motivations to shop alternative purchase options – TURF analysis, December 2019
- Those interested in renting want easy, convenient options
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- Figure 20: Category interest and motivations to shop, by gender and age, December 2019
- Moms need reassurance to avoid unwanted circular purchases
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- Figure 21: Category interest and motivations to shop circular options, by parental status and gender, December 2019
- Black consumers are willing to share and want rewards for doing so
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- Figure 22: Reasons and motivations to shop circular options, by race and Hispanic origin, December 2019
Attitudes toward . . .
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- Renting items
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- Figure 23: Attitudes toward renting items, December 2019
- Combating cleanliness builds trust and conversion
- Previously owned items
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- Figure 24: Attitudes toward previously owned items, December 2019
- Reselling my personal items
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- Figure 25: Attitudes toward resale, December 2019
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- Figure 26: Christy Dawn x thredUP email, January 2020
- Figure 27: Poshmark Instagram, January 2020
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Abbreviations
- Abbreviations
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