Melissa Baxter started working in the thrift store industry as a teen and fell in love with the business. At 20, she bought a small consignment shop in the Atlanta suburbs.
Now 35, and the owner of Back by Popular Demand consignment shops in Linburn and Marietta, Georgia, she has to adapt faster than ever as e-commerce websites like thredUP and luxury re-seller The RealReal make it easier to buy online.
For traditional, physical stores with less than $1 million in annual sales, resources like venture capital funding aren't typically an option. That's led owners to use strategies such as holding merchandise shows using Facebook's live streaming feature, and stylist services to bring in revenue.
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"We have to just be more creative. We have to use what's at our fingertips," said Baxter whose business also includes what she calls "Prom Headquarters" a portion of her Linburn location that sells prom dresses from size zero to 28. "Most of us have active Facebook followings, we have active Instagram followings. And it's really instantaneous."
As traditional mainstream retail struggles and stores such as Gap and J.C. Penney close stores, the consignment clothing and accessory market continues to grow. thredUP's annual report, followed by the industry, forecasts a $33 billion resale apparel market, both in stores and on websites, by 2021. That's up from $18 billion in 2016.
"People don't realize how much online selling brick and mortars do," said Adele Meyer, who has overseen the National Association of Reseller and Thrift Stores for more than two decades. "Now, the newest trend is Facebook Live sales."
Supply doesn't seem to be running out. The average American woman doesn't wear 60% of items in her closet, or about $220 billion in potential inventory, according to Fung Global Retail Tech, a consulting firm.
The resale market is resilient in the face of direct online selling sites like eBay and Letigo because consignment shops take the time to assess the quality of the merchandise before they price and sell it. Most people think their item is worth more than it is, especially in apparel, Meyer said.
For Vena Holden, owner of Selective Seconds in Greenwood, Indiana, growing means holding events on Facebook Live and even taking customers on overnight bus tours to other consignment shop outlets.
Holden, 58, has run her shop for 20 years and regularly takes customers on overnight bus tours of other consignment shops. She recently began holding live shows on Facebook.
"I believe it's going to work, at least temporarily," Holden said.
ThredUp, with about 1,000 employees, estimates it will sell 10 million items this year, putting it on track to double for the fourth year in a row. This year it opened stores targeting cities where it has a concentration of online customers in San Marcos and Austin, Texas and a third in Walnut Creek, California. CEO James Reinhart says the company may open more.
"You're still looking at 10, 15, 20 years where you're still going to sell more stuff offline than you are online," Reinhart said. "So, as a practical matter, it was 'we should have stores because that's where customers buy.'"
The RealReal CEO Julie Wainwright says her company, which sells items that range from $45 M. Missoni leggings to a $40,000 Hermes bag and even has rugs as high as $200,000 apiece decided to open physical stores after the success of a temporary, or pop-up, shop had $2 million in sales over an 18-day period. The company, with 950 employees, is on track to reach $500 million in sales this year, she said.
"We found that the pop-up stores helped people think about us differently. It was an exercise in branding," she said. The RealReal employs about 50 experts, 35 of which are gemologists. Watchmakers, a curator that worked at Sotheby's and other experts make up the rest. Wainwright said. To further involve customers with the brand, The RealReal plans classes on how items are priced.
Jennifer Mann Hillman, a former marketing executive for retailers like Estee Lauder, and business partner costume designer Lisa Eisler, were going through clothes that were too small for their daughters. They decided they had too many things and both were interested in philanthropy. Hillman had worked closely with the Breast Cancer Research Foundation. Something clicked.
Last month, they opened the Los Angeles-based website LuxAnthropy , which partners with charities to donate a portion of sales.
"We thought 'there's got to be someplace where we can sell things and make money with our items and have some part of it donated to a charity that we love,' and we looked around and there really wasn't anything like it," Mann Hillman said.
In its first month, the business has accumulated more than 2,000 pieces from Hollywood insiders and wealthy business people. By partnering with charities such as Los Angeles Children's Hospital and housing provider Help USA, charities see LuxAnthropy as ``essentially creating a new revenue stream," Hillman said.
"We've had such a remarkable response," Eisler said.