|Source: S Jones|
In my recent experience I keep observing a recurring theme: industrial neighborhoods with concentrations of second-hand furniture and antiques merchants. Another recurring theme is that these neighborhoods are changing from being predominantly industrial to mixed-use neighborhoods and people are concerned that this will eventually displace these merchants. Is there a way they might they be retained?
I’ve learned that antiques are one of those retail categories very amenable to creating niche districts. As observed in these neighborhoods, when they congregate in the same place it can have a powerful magnet effect. In my opinion, therein lies the opportunity to both retain the unique character of the neighborhood while also cultivating a successful shopping district. But that argument may be hard to make if those merchants are struggling to remain competitive. This prompted me to ask some questions. Are they actually competitive? More broadly, are resale merchants subject to the same competitive pressures as traditional retailers in the face of e-commerce giants like Amazon? If so, what are some recommendations that might be made? In my investigations of these questions I uncovered what I consider some best practices in the second-hand apparel industry that may (potentially) be applied to these antiques merchants.
Why look at second-hand apparel?
|Photo credit: Jon Fravel|
Because an antiquing excursion and a trip to the thrift store share similar qualities. Both are high-touch and experiential in their basest senses. They’re high-touch because the customer is able to literally reach out and touch the raw products, free of packaging, feeling the texture of the fabric or the grain of the wood. They’re experiential because of the excitement associated with the hunt, so to speak. You and the other customers are engaged in a tragedy-of-the-commons scenario such that if you buy this particular Tiffany-style accent lamp or this vintage levis denim jacket, I cannot. Nor can the sales associate put in an order for another to be shipped to the store (read: you win, I lose). Maybe the allure is also in the speculation—the possibility that any of these items is worth well over the price on the label. Maybe that Tiffany-style lamp is actually a veritable original. Then the shopping experience is elevated into an exercise of your consumer savviness and treasure-hunting prowess.
This might prompt us to surmise that brick and mortar thrift stores and antique merchants are immune to the encroachment of e-commerce in our rapidly changing retail landscape. Sure, margins can be low. But Amazon doesn’t have the capacity or willingness to sort through mountains of consigned garments and so they don't pose any real threat to the thrift store business model.
Then why change?
Because even though Amazon isn't selling used apparel, other e-commerce disruptors have figured out that the hunt for pre-owned treasures is easily reproduced in the digital marketplace. In a Forbes article by Richard Kestenbaum, he details how Millenial spending patterns are partially responsible for unprecedented growth in resale. Traditional brick-and-mortar thrift stores are growing by 8% per year while the online resale market is growing by 35% per year, 17 times faster than the overall market for apparel. In his explanation, he points specifically to the growing popularity of internet clothing consignment stores like thredUP, a company that describes itself as “the world’s largest online marketplace to buy and sell women’s and kids’ secondhand clothes,” thereby tapping into an $18BN apparel resale industry that is expected to grow to $33BN by 2021.
In a report on their website, thredUP claims the “fun factor” of the resale market explains their success against pervasive “retail boredom.” Shoppers can sit on their couch with their dog, drink wine, and scroll through similar offerings that they would find at off-price retailers like Marshalls, TJMaxx, and Nordstrom Rack for a fraction of the price. Millennial shoppers are also highly motivated by the eco-conscious associations of buying resale, assuming second-hand is more sustainable for the environment. It also means discretionary income is not as significant a limitation as some might think. But thredUP states that Millennials are not the only target demographic. A significant share of shoppers come from the 65+ age cohort, suggesting that a recession-era mindset drives them towards value-oriented spending too.
How can brick-and-mortars compete?
One strategy we’ve mentioned in the past is adopting an omni-channel retail strategy that utilizes the best of both the physical and digital worlds. But how does a merchant make sure their constantly changing inventory is seamlessly represented on the website when sales are also happening at the counter? How do they leverage their websites in a way that actually yields more trips to the store? To answer this I point to several different strategies being employed by apparel thrift stores here in Brooklyn.
|Beacon's Closet in Williamsburg, BK|
Source: Jennifer Yin
2. Maeven is a boutique thrift store started in 2012 by Amy Yee, who had spent the 12 years prior buying and selling vintage clothes on eBay and Etsy. This eventually became profitable enough for her to open up a studio-space in Brooklyn in order to “provide a better shopping experience for her customers.” Maeven resembles that class of click-and-mortars like Warby Parker and Bonobos who have managed to leverage physical locations out of digital success. In spite of this, Amy continues to employ a combination of channels that include her studio space, pop-ups, her website, and the initial online marketplaces that brought her success in a multi-pronged approach to customer engagement
3. Buffalo Exchange is a company with 49 stores across 20 states. I’ve visited locations in both DC and New York, and noticed large constantly-changing physical inventories in each of them. This seems to explain why they haven’t created an option to order their clothes via their website. But something they have implemented is the ability to sell your clothes to them by mail, requesting a mailbag online and having it sent directly to your home. You can then fill the bag at your leisure and return it to them when you’re ready. They then give you the choice of receiving a paper check, PayPal payout, or in-store credit. By making the selling process more seamless, the store is able to create more opportunities to encourage customer visitation.
What does this have to do with antiques?
Admittedly, I still don’t know whether or not brick-and-mortar antiques are losing substantial market share to e-commerce disruptors in the same manner as the apparel industry. My main point here is that resale is inherently high-touch and experiential, yet e-commerce companies are figuring out new ways to emulate these qualities through their websites and apps. Brick-and-mortar antique retailers would do well to take note of how this is being done and act in kind. If not for fear of losing market share at the macro level, then to take advantage of these lessons to be better positioned at the micro. To summarize, here is what actions are being taken by second-hand apparel retailers which I believe can be replied to others in the business of resale:
1. Establish an on-line marketplace for your products if one doesn’t already exist. If maintaining accurate inventories is challenging, prioritize your offerings and highlight what’s special about what you’ve selected. If you’re a consigner, explore ways it can aid in the appraisal and selling process in order to encourage more in-store visitation and robust inventories.
2. Consider other ways your website can further engage your clientele. Utilize social media platforms like Instagram to contextualize your products in ways your website does not. Create a blog discussing interesting trends and rare finds while providing personable anecdotes. Paint a picture for the customer whenever possible that showcases your unique brand to them.
3. Recognize changing trends in consumer demand. Are your customers motivated by eco-conscious spending options? Are they bargain-seeking? Or are they simply in it for that chance to find something rare and exclusive? Have you taken the time to look around your neighborhood? Who lives there? Who is patronizing businesses near yours? Use these clues to inform your approach and the way you present your offerings. There could be untapped demand you haven’t seen yet.
This investigation started because I wanted to think about how a cluster of antique stores might remain in their neighborhood despite development pressures that could feasibly displace them. What it turned into was a larger question of whether resale merchants are threatened by the growth of e-commerce. If that feels at all deceptive, I apologize for that. I mean only to emphasize that in exploring what constitutes a robust shopping district, we should leave no stone unturned in our investigations. Having done that, we can create more effective recommendations for future growth.