70% cut apparel spending: Why resale is retail’s answer

The regulation would not have sounded alarm bells if demand was even and consumers were spending at healthy rates. However, unsold inventory has become a concern for several firms over the past few years, with shoppers turning frugal every passing day and inventories remaining on the shelves.

This year, in a double whammy situation, the war and tariffs have already ignited product prices and reduced disposable income across the United States and Europe. Rising gas prices have pushed consumers to either shun purchases or turn sustainable through secondhand or resale purchases.

Now, this is likely to result in an inventory overload of new product lines at retailers, creating margin pressure while also adding the burden of compliance for companies whenever they take action to manage unsold inventory.

According to a survey conducted by Statista during January and February this year, rising prices are significantly affecting apparel spending, with over ** per cent of consumers reporting an impact in the United States. “More than a quarter plan to increase secondhand purchases as a direct response, reinforcing resale as a key coping mechanism in inflationary environments,” Statista said.