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When Cate O’Connor shops for clothes, she worries more about how her purchases affect the world around her than whether they are exactly the right colour or style.

Like an increasing number of Generation Z consumers committed to making sustainability a guiding principle in their lives, Ms. O’Connor, an 18-year-old high-school senior from Connecticut, buys recycled clothes through secondhand stores or online retailers. She began the practice two years ago and now shops almost exclusively in the world of resale. So do her siblings and most of her friends.

“I do it for the sustainability effort,” said Ms. O’Connor, who regularly scours the thrift stores in New York, about an hour from her home. “It’s important for me to have a good, positive impact on the world. The clothes aren’t always the perfect size or colour, but it’s worth the sacrifice. And it’s a lot cheaper.”

On top of its growing appeal with Gen Z consumers aged 9 to 24, reselling is also one of the few retail sectors enjoying a positive holiday-season push from the alignment of some negative factors in the consumer world: The U.S. inflation rate has soared 6.8 per cent in 2021, its highest level since 1982, and supply chain issues have restricted the flow of goods into North America. The results are higher prices and a scarcity of merchandise.

Resale goods are typically much cheaper than new ones; they’re heavily discounted from the original prices. And because they are already in the country, they are not choked by supply chain interruptions such as shortages of materials or manufacturing and shipping snafus. In fact, most online resale transactions are completed by mail or package delivery services.

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Leading resale players such as TheRealReal and ThredUp have been emphasizing these points with investors in hopes of strengthening the arguments around the value and stickiness of reselling in the fast-changing retail world, where trends come and go with breathtaking speed.

TheRealReal chief executive officer Julie Wainwright recently told investors the company’s inventory levels were at pre-COVID-19 levels and it was not prone to the inflationary pinch other retailers were feeling.

ThredUp CEO James Reinhart said during the company’s third-quarter earnings call: “While many companies have been forced to raise prices due to inflation or supply chain pressure, we do not have the same level of exposure.” He added the company’s inventory is sourced domestically, so it has been able to reduce prices up to 15 per cent from a year ago.

To be sure, even before the boost from current market dynamics, the resale sector has been growing since its emergence several years ago. Retail experts project it will reach US$53-billion in sales by 2023.

In July, the e-commerce company Etsy Inc. dropped a bombshell, acquiring the secondhand fashion app Depop for US$1.62-billion. At the time of the deal, Etsy CEO Josh Silverman called Depop “the retail home for Gen Z consumers.”

“It’s a serious business,” Tim Ceci, a New York-based retail consultant, said of reselling. “There’s no question Gen Z is looking at it from the standpoint of sustainability and tighter wallets. But the big houses are paying very close attention because they want to protect their market share.”

He pointed to moves by several traditional retailers, such as Macy’s and JCPenney, to explore their own resale strategies, including partnering with ThredUp and other companies to tap the market.

But, Mr. Ceci said, the emergence of resale is more of an evolution than a revolution. He noted that resales represent only about 1 per cent of the overall commercial retail universe. But it does reflect another step toward what he calls “omnichannel” strategies, where retailers look to offer a broader mix of choices – both brick-and-mortar and online – to increasingly demanding and mobile customers.

“Tech is not taking over; people are still going to shop in stores,” he said. “This is part of the evolution of retail.”

That evolution will continue to be influenced by Gen Z consumers such as Ms. O’Connor. Mr. Ceci identified social consciousness as another emerging trend, and pointed to moves by big retailers such as Nordstrom, Target and others to partner with, and buy from, minority-owned businesses.

“Like sustainability, social consciousness is a big deal and makes a difference,” he said. “Gen Z has no tolerance for anything but inclusion.”

As for traditionalists who might blanch at the prospect of wearing used clothing, Ms. O’Connor has some encouraging words. She said a lot of the clothes at resale still bear the original tags, there are some surprising treasures to be found and she has yet to have a distasteful experience.

“I’ve never been grossed out by it,” she said. “And it’s a lot cleaner way to live.”

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