As the resale industry has boomed in recent years, resale companies, including Treet and Archive, have assured brands that resale does not “cannibalize” sales of new products. But there are no such assurances in ThredUp’s 14th annual Resale Report, which paints a picture of resale enjoying new merchandise’s liver with fava beans and a nice Chianti.
The secondhand clothing market in the US is “taking a measurable share from new retail,” the report states. Resale grew to $30 billion in 2025, a 13% YoY increase and nearly four times faster than the new apparel market, which grew 3.6%, per ThredUp.
Today, 34% of consumers’ clothing budget goes toward secondhand purchases. Before buying new, 46% of consumers browse resale; among Gen Z, it’s 58% and among millennials, it’s 55%.
“We’re learning from the data that it does appear to demonstrate cannibalization is happening,” Alon Rotem, chief strategy officer at ThredUp, told Retail Brew.
But Rotem said this should not strike fear in brands, but rather encourage them to launch their own resale programs, resale’s version of “if you’re not at the table, you’re on the menu,” though Rotem didn’t put it so starkly.
“This is happening with you or without you,” is what Rotem said is his message to brands on the fence about resale. “Brands have an opportunity to participate in resale,” he added, and launching resale programs is “a great hedge for them against the trend of cannibalization that we’re seeing.”
In addition to being a resale marketplace, ThredUp, like Archive and Treet, partners with retail brands to launch and administer their resale programs through its Resale-as-a-Service (RaaS) service.
ThredUp’s 2026 report relies on research and data from research analytics firm Global Data, including a survey of 3,268 US adults fielded in January and February.
Agentslick commerce: The report is decidedly bullish about AI, with 81% of respondents who use AI saying it has improved their resale shopping experience, 69% saying they’d willingly use AI to monitor resale platforms for hard-to-find items, 59% saying they’d use it to haggle on prices, and 39% saying it would bolster their trust in the authenticity of the products they purchase from peer-to-peer resale platforms.
ThredUp’s marketplace includes an AI image search feature that lets shoppers upload a photo they’ve either snapped themselves or found online of someone wearing items they covet, with search results yielding listings for similar looking items.
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One evolving use of AI in the resale realm that Rotem finds promising is automating the process of selling products on peer-to-peer platforms. Traditionally, selling garments has meant taking photographs, researching value, determining sizes on labels and actual measurements, and writing snappy listings.
But the day is coming when AI will reduce all that to just taking a photo of the item, he said.
“Take a photo of the item in your closet, and the magic of technology extracts all of the metadata layers of the item so that it can be quickly listed online, and even listed across multiple platforms,” Rotem said.
Among those who’ve never resold clothing, 33% said an AI-automated listing process would convince them to finally do so, the report found.
Dressed to invest: The growing popularity of resale has new clothing shoppers increasingly considering how much they’ll be able to get for items when they want to sell them down the line. Today, 60% of customers say resale value is a “key factor” they consider when buying new clothing, a 13% YoY increase, per the report.
Asked if that means brands selling new clothing should highlight resale value the way that automakers do, Rotem didn’t think the idea was far-fetched.
“For the most part, yes,” he responded. “We would expect to see [a] conversion rate increase if a customer…had some confidence about what the resale price of it would be because that changes the value proposition for the consumer.”
While that might not be happening explicitly now, Rotem noted that Patagonia effectively is doing it when, on its main e-commerce sites, it shows used items in the same listings as new ones.
It shows “the heritage value of the brand” that “they’re comfortable showing a customer new and used at the same time,” he said.
“We’re moving from a linear apparel economy toward a resale fly wheel, where consumers increasingly buy with future value in mind,” James Reinhart, ThredUp’s CEO and co-founder, noted in the report.
ThredUp’s survey found that the closets of Gen Z and millennials are such flywheels, with 52% saying they attempt to sell more than half of their wardrobes.
“They’re very comfortable looking at things coming in and things going out, like a circular closet,” Rotem said.