Second-hand Goes Mainstream
Used
is big business. Books, cars, clothing, furniture, video games and more
are all finding a second life being sold second-hand through a variety
of venues in store environments and online.
According
to a survey conducted by the National Association
of Resale & Thrift Shops (NARTS), 77.9 percent of the stores selling
second-hand goods experienced an increase in new customers during the second
quarter of 2009 compared to the previous year period.
The
same study found 64.1
percent of 263 stores taking part in the survey had seen an average sales
increase of 31 percent. Of the remaining stores, 11.5 percent said sales
were flat while just under one-fourth experienced a decline.
“The
slumping economy may draw people in, but once they visit a resale shop
for the first time they are pleasantly surprised with the high quality
of merchandise and are forever hooked on a new
way of smart spending,” said Chris Cowman, president
of NARTS and owner of one more time in Columbus,
Ohio, in a press release. “The popularity of resale has never waned,
and we believe our members will come out of this recession in a stronger
position – with a larger customer base – as a broader section of consumers
explore the many options the resale industry has to offer.”
Consumers
not only see second-hand goods as a way to save money, they have also
found it provides them with the means to make some, as well. Just under
63 percent of stores participating in the NARTS research said they had
seen more merchandise coming into their stores than before.
Tracy
True Dismukes, owner of Collage Designer Consingment in Birmingham, Ala.
and a past president of NARTS, said in a press release, “Consumers can
maintain the high standard of living they have become accustomed to on
a fraction of what they used to spend, and they can also sell items they
aren’t using and get cash or store credit to use on items they want or
need.”
Half
Price Books, a 106-store chain that sells mostly used books and magazines,
is seeing an upswing in its business.
“We
are buying more books than ever before so people are selling … It started
last year with people coming in and selling books for gas money,” Kathy
Doyle Thomas, executive vice president for marketing and real estate,
told Reuters.
“I
think people are okay with buying used … it is also part of the growing
culture of recycling,” she added.
Kathy
Gropper, a consumer in the Dallas market, told Reuters, “Whenever
I finish books I bring them back and get more. I do the same with clothes.
For me it’s a recycling thing. We also did it before the recession but
we are even more careful now.”
Discussion
Questions: Will consumers who are now buying second-hand continue
to do so even after the economy has fully recovered? What categories do you
see having the biggest
potential for second-hand in the future?
The move toward value-oriented retail started long before the current recession. From warehouse clubs to discount stores to off-pricers, these types of stores have been taking market share from traditional outlets like department stores for many years. This trend is going to continue long term and certainly will extend into categories (like textbooks) where traditional perceptions of value are being threatened by high prices as well as new technology.
Of course an industry study would make these conclusions! Anyone else notice that sites like Amazon with their “buy it used” are little more than ways to sneak past manufacturer price restrictions like eBay? Not denying business increases but used has never been more “gray” a distinction.
Second hand and consignment stores are indeed recession proof. They are not, however, recovery proof. The problem isn’t demand. There’s always someone looking for a bargain. The problem is supply. It’s only when times get very tough that people resort to cleaning out closets to raise cash.
We saw a very similar boom in second hand goods in the early ’90s which had all but disappeared by 2000.
In short, there will always be a place for quality consignment and second hand on a limited basis but as a widespread phenomenon, this is clearly tied to recessionary times.
Buying used will lessen for some when the economy turns around but there will always be a segment of the market that will use this outlet to a degree. Whether or not individual stores will see an upturn will depend on how they accommodate the consumer. Smell, organization, and display issues are common in a used environment. If the “used” outlet displays attractively and makes it a pleasing experience, they should prosper.
Whether it’s a desire to save money or to recycle rather than discard, consumers are incorporating used goods into their purchase patterns. With stores like Amazon offering used products side by side with new, consumers can instantly see the price differential. The recession may have spurred this trend, but once consumers experience buying used goods, and if those goods meet their expectations, they will continue to do so.
Auto leasing made the used car market much more palatable for many used car buyers. Certified used cars have had a positive impact on the used car market as well. After years of car buying, I’ve learned. Two of the three family vehicles are used and all will be in the future. While buying new seemed a must in the past, it seems ridiculous today considering the savings.
Used jeans and work apparel became a must for our college student who’s on a extremely low budget due to cuts and elimination of scholarship monies and market loss in college funds. Incredible buys at Goodwill and other local faith-based consignment and second-round stores saved the day. Used furniture through the same type of sources furnished the college apartment and actually were considered better than new–imagine that!
Those with parents or grandparents that lived in or were raised in the Great Depression know that many of the habits carried forward as regular disciplines. Further, that era was followed by real sacrifice during World War II and likewise, many that lived through it carried those disciplines as well forward throughout their lives.
While this era is certainly nothing even remotely close to those cataclysmic events, there are corollaries to be drawn. While it’s clear that national unemployment is not at those levels, there are regional levels that rival depression levels. There has certainly been little consumer-level sacrifice compared to that around World War II; the two events combined had lasting impacts.
It could be debated whether or not the fuel spike of 2008 has had lasting impact. I believe it has on consumer behavior. While fuel is substantially lower now, I believe consumers now know and realize it could spike again tomorrow and thus, remain leery. Its impact was latent and had more effect on the overall economy’s position today than I believe is given credit.
If anything, the combination of many events has caused consumers to become much smarter and much more focused on value. Further, they are more careful and make definite choices where before, there may have been much more of a whimsical market. Those days are gone–likely for a decade or more; if ever to return.
Buying used and buying smart is going to continue well into the future. Contrary to wishful pundits, the recession is not over–not by a long shot. The emerging behaviors driven out of this period are yet to be determined. It is certain that they are behaviors which will impact retailing now and in the future–well into the future. I look for a lot of retail head scratching, trying to figure it all out in the way forward. It should certainly cause one pause if entire strategies are being made on how to react to something that hasn’t even thoroughly played itself out yet. Careful and well-thought-out adjustments on the way would seem to be the best action until this changing trend defines itself more clearly.
Second-hand is a fascinating segment of the retail business. With the exception of a few sub-categories, it amazes me that there is a financial structure to support retail outlets (other than not-for-profits).
What is so difficult in this business are the selling drivers. The quality side of the value equation is very mixed. That mix not only includes the physical quality of the product, but also the dated quality of a product. An out-of-fashion dress or a too-old edition of a text book drive the possible price quickly down.
“Used” is becoming more mainstream than even a few years ago, not only because of the recession but also because of a desire to waste less and be more Earth-friendly. All these trends are still on the uptick. Barring a societal change in the way wealth is distributed in this country, there will be more and more people living in poverty or on the edge. That’ll help “used.” And, more people have come to accept the fact that the planet is in deep trouble, so just pitching used things isn’t cool or wise anymore.
The only thing that surprises me about all this is that there are any secondhand booksellers actually buying books. All over England, a charity called Oxfam, which has always had a few shelves of secondhand books in its stores, is thriving and opening up specialist stores. The more traditional sellers–whose stores are often treasure troves that generally require a great deal of patience to uncover due to their total lack of organisation–are complaining bitterly and barely surviving. I’m sure lots of people who give their books to the charities would prefer to sell them but it’s much easier said than done.
As for people continuing to buy them after the recession, absolutely. Booklovers love books and some of the best loved ones are to be found secondhand. Bargains are almost beside the point because they aren’t always cheap but some can be worth their weight in gold. The key thing for books and everything else is that they must be in excellent condition, quite obviously coming from good homes while looking for equally good new homes.
PS I’m still hunting for a copy of The Story of Horace by Alice M Coats so if anyone spots one, please please let me know.
My observation of the consignment and resale stores that I visit is that while there’s been an increase in demand, there’s not been a corresponding increase in supply, especially in some higher-end shops. This is especially true in non-apparel categories, but also in apparel shops. In the ongoing adjustment between supply and demand, resale and consignment prices are down, as they are at regular retail.
In the downturn, there are people that want to sell or consign goods, but these aren’t necessarily the source of better quality goods. People who have better quality goods to sell, especially in non-apparel categories, see the weaker demand as a disincentive to sell their goods now. So while business may be up, the consistency of quality assortments is down, as are prices.
Through decades of prospering in the second-hand world of consignment, I have noted that all 3 models of used retailing: consignment, resale/buy-outright, and charity donation shops, play with a double-edged sword.
When consumers view the economy as tough, they explore gently-used goods more. When those with excess goods to pass on think times are tough, they may be, as some commenters have noticed, less likely to clean out their cupboards and closets for fear of not being able to replace them. What we are seeing now, however, is people cashing IN on their goods: they want to trade them for income.
The other side of the sword? People are buying less NEW, which means that sometime in the near future, those closets won’t be quite so overflowing with excess possessions. That will directly impact the supply side of resale retail.
They are also buying LESSER: trading down in quality. Resalers will face in the next 12-18 months a distinct lack of quality. A cheap, used item is worth less to the second-hand shopper and shopkeeper. A well-made item, whether a sofa or a sweater, IS recyclable in the used market. Shoddy goods aren’t. These types of items are “disposable”…not of any value past their short “life.”
Shopkeepers have already noted a sharp downturn in their acceptance percentages, that they are being offered goods with no resale value which they must turn away. Disposable goods become a glut…not on the market, but in the landfills.
I have noticed recently, however, that consumers are learning what our mothers taught us: better one well-made handbag than 3 or 4 sloppily-constructed, fad-driven bags. Could it be; could resale lead shoppers into fields of quality vs. quantity? And help save the earth at the same time? Wouldn’t THAT be an idea that should become mainstream?