The news that Depop – one of Gen-Z’s favorite apps for buying and selling used clothing – had been sold to Etsy for $1.6 billion is a warning shot for fashion retailers. For years, traditional retailers and “fast fashion” companies have moved too slowly on the sustainability front. Etsy’s acquisition of Depop shows that shoppers, led by an eco-conscious Generation Z, are taking things into their own hands, and it has commercial appeal.
The fashion industry has been slow to integrate sustainability-centric practices into production and retailing, thereby, leaving a gap for disruptive new redistribution models to fulfil consumer preferences. In 2020, new users of Depop increased by 163 percent from the previous year, with a 200 percent growth in traffic and a 300 percent increase of sales. Its immense popularity is a reflection of the success of sustainable redistribution markets, particularly among younger users.
Fashion for an eco-conscious cohort
The rise of Depop and other consumer-to-consumer fashion redistribution platforms and apps, including Vinted and Vestiaire Collective, illustrate the draw of the circular economy – making the most of resources already in circulation and the often more-affordable prices that come along with that. This is especially appealing to younger consumers who are more concerned about sustainability, climate change, and the future of the planet.
This generation has also been quick to adopt other sustainable life choices, like vegan diets. In contrast to the fashion industry, food suppliers from grocery stores to KFC have responded to this demand with increased availability of plant-based food products. Participation in the circular economy is an illustration of consumers adopting responsibility for post-consumption behaviors and actively creating opportunities for other consumers to adopt more sustainable fashion practices, with the added benefit of an income for those that participate in the circular economy by selling their unwanted wares.
One benefit of Depop is the accessibility of the app. Gen-Z are a cohort that have grown up with digital technology, and apps are a familiar space for socializing, sharing, and accessing information and consumption. Additionally, the inability to visit the high street and brick-and-mortar stores, more generally, due to the COVID-19 pandemic forced most consumption online. As a growing amount of consumers have grown used to having their fashion delivered, there is no disadvantage to them in shopping through Depop.
At the same time, while consumers may want to buy more sustainable clothing, there are many established barriers, such as higher pricing, lack of fashion appeal, lack of information, and a larger misunderstanding of sustainable fashion terminology. Beyond that, consumers are not prepared to sacrifice their sense of self and identity in the name of sustainability, and this is especially true given that many shoppers do not understand all of the ways in which the fashion industry is unsustainable.
Depop gets around some of these barriers by creating a market where Gen-Z consumers are both the sellers and the buyers, so the fashion sold on the app is specifically appealing to them. This is an example of collaborative consumption, a system which includes a number of alternative practices to enable commodities to be used for longer and by a greater number of people. This may include redistribution markets, such as Depop, as a platform for exchanging used clothing, or renting and borrowing clothes, such as is found in a fashion library system.
Retailers must act fast
The fashion industry lags far behind in the sustainability sphere. The low cost of fast fashion encourages mindless consumption, and shoppers have been vocal about calling this out – for example, the social media campaign against online retailer Pretty Little Thing for selling a dress for 8 cents during a Black Friday sale. High fashion similarly has well-established shortcomings in its own labor practices, waste, etc. So, what can brands do to address these concerns?
Some brands include a sustainable range made from organic or recycled materials. The problem is that these collections are often limited to basic items, such as vests, t-shirts and leggings, and are shrouded in buzzy marketing babble. And any benefit being borne from these initiatives is greatly overshadowed by the accelerated production of fast fashion. In the fast fashion space and beyond, many retailers aim to address sustainability by encouraging consumers to dispose of unwanted garments by donation rather than address sustainability in production and retailing. Some retailers encourage consumers to return unwanted clothing to the store – in return for a voucher to purchase new fashion. However, the problem of climate change and scarce resources cannot be solved through more consumption.
The used clothing market in the United Kingdom, for instance, is not sufficiently buoyant to resell clothes donated to stores and charity shops, meaning that much of this ends up in developing countries or, in the event of Brexit border delays, stuck in warehouses.
Given that its business is centered on tapping into what consumers want, it is somewhat surprising that the fashion industry is so out of touch with consumer trends. The COVID-19 pandemic has altered social systems and consumption practices, and solidified younger consumers’ sentiment for conscious consumption. This new chapter, combined with the success of Depop, presents brands with an opportunity to reconsider their business models. One fashion retailer embracing this well is Cos, part of the H&M group, which enables consumers to buy and sell used Cos clothing online as part of its “Resell” program in conjunction with establishes resale site Reflaunt. And London department store Selfridges has opened a permanent “pre-loved” department, which sees it offering up pre-owned wares in its store flagship store on Oxford Street in central London in partnership with Vestiaire Collective.
Given the momentum of Gen-Z’s preference for collaborative consumption, my colleagues and I are expanding our research to examine engagement on redistribution markets, via apps and physical events, as well as the potential for renting fashion. We will also examine whether younger consumers perceive a loss of authenticity in Depop being purchased by Etsy, as when L’Oreal bought the Body Shop. It will be interesting to see whether the change in ownership affects the commercial activities of Depop.
It is clear from Etsy’s purchase of Depop that there is commercial appeal for more sustainable fashion. As alternative digital platforms for fashion grow in popularity, the fashion industry needs to change – and fast – if it wants to stay relevant.
Elaine L. Ritch is a Senior Lecturer in Marketing at Glasgow Caledonian University. (This article was initially published by The Conversation.)