Fashion's Resale Revolution: How Companies Can Prepare Now
The fashion industry is at a crossroads, with resale markets booming and regulations pushing for circularity. By 2029, resale is projected to reach $367 billion, outpacing new-garment growth. Meanwhile, returns are already enormous, with U.S. retailers absorbing $890 billion in 2024. Companies have just 12 quarters to prepare for this shift, making resale readiness crucial for their customer service.
Extended producer responsibility (EPR) rules are set to levy fees based on recyclability and durability, making reverse-flow capabilities vital for logistics leaders. Companies can secure margins, satisfy regulators, and deepen customer loyalty by retrofitting hubs, retraining drivers, and redesigning routes for recommerce.
DHL has taken a significant step by partnering with Reflaunt to redesign routing algorithms, reequip warehouses, and build new data pipelines for resale readiness. If half of returns are channeled into recommerce, warehouses will need to shift from static storage to dynamic thrift store centers. Governments are mandating circularity, with France subsidizing garment repairs and the EU requiring separate textile waste collection starting January 2025.
Fashion brands are experimenting with resale flows. Shein has launched Exchange in Europe, while Fjällräven is working with Archive to authenticate and repost outdoor gear. Nishith Rastogi, Founder & CEO of Locus, a leading logistics technology company, specializes in helping 300+ global enterprises navigate these changes in the clothes industry.
With the resale market surging and regulations tightening, companies must act swiftly to capture and control resale flows. By embracing recommerce, they can secure margins, meet regulatory demands, and foster customer service. The time for preparation is now, with just 12 quarters until resale crosses the $367 billion threshold.
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