Last week, I spoke to Kate Spade and ThredUp about how resale can work as a customer acquisition tactic. Elsewhere, brands like Bvlgari were caught in the crossfire over China’s contentious relationship with Taiwan, and inflation data for June suggests that we may be headed toward a friendlier environment for shoppers and brands alike. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and Week in Review episodes, and the Glossy Beauty Podcast for interviews from the beauty industry. –Danny Parisi, sr. fashion reporter
Branded resale continues to work as an acquisition tool for brands
Announcements that fashion brands are launching their own resale departments seem to come in waves. Every couple of months, you’ll see a surge of brands announcing their resale partnerships with third-party companies like ThredUp, Archive, Recurate and Trove.
As it turns out, that’s a real strategy. James Reinhart, CEO of ThredUp, told me on Wednesday that the company tends to hold these announcements and put them out in batches, a clever tactic that generates more media interest than parceling out each of those announcements over time.
I spoke to Reinhart at The Lead Innovation Summit, where I moderated a panel featuring him and Kate Spade CMO Jenny Campbell. Kate Spade has been a ThredUp partner for about six months.
Campbell told me that more than 90% of the people who buy secondhand from Kate Spade are new to the brand. That figure confirms what many in the resale space have been saying for years and one of resale’s main pitches to brands before the current wave of branded resale adopters: Resale is a customer acquisition tool.
Brands caught in crossfire over Taiwan sovereignty, Uyghur forced labor
Several brands found themselves in the middle of geopolitical crossfire last week. The LVMH-owned jewelry brand Bvlgari was heavily criticized in China for listing Taiwan as a separate country from China on its website. The brand changed the listing and apologized on its Weibo channel to its Chinese audience, saying that it “respects China’s sovereignty and territorial integrity.”
China is infamously sensitive about Western recognition of Taiwan as a separate country, and the political status of the island has been in contention for decades. Fashion brands from Zara to Gap have had to apologize in the past for listing or implying that Taiwan is separate from China.
Meanwhile, in the U.S., Nike is being probed by Canadian authorities for the alleged use of Uyghur forced labor for the production of its goods. The probe is still in the initial stages but could potentially impact the brand’s supply chain. Nike maintains that it does not do business with any manufacturing partners using forced labor.
Inflation may be cooling, a good sign for brands and consumers
Inflation data released on Wednesday by the Federal Reserve showed good news for consumers. While prices in June still increased by 3% year-over-year, the rate of inflation has slowed. It’s down from 4% in May and the 9% peak last year.
The core index, a separate metric from overall consumer prices which excludes volatile categories like food and fuel, was even better. Prices in the core index increased 4.8%, less than the expected 5% and the 5.3% figure tallied in the first five months of the year.
Slowed inflation is undoubtedly a good thing, although the complex matrix of factors that dictate prices is not always clear-cut. According to the New York Times, the Fed is still reserved on whether this is a sign that inflation is cooling for a long while or if more price increases are expected later this year.
The reduced consumer spending that inflation brought has been a major headache for brands, particularly in lower-price categories. While affluent customers are fine and have kept spending as usual, brands that cater to a lower-spend customer have been hit hard by inflation-suppressed shopping. A cooling inflation rate, while still tentative, would be good for both consumers and brands in this space.