Retail owners have long lamented a decrease in foot traffic, due in large part to people preferring the convenience of online shopping even prior to the pandemic, when it became a necessity during lockdown. But there's one retail sector that has enjoyed a surge in in-person browsing: thrift stores.
An anomaly of the retail apocalypse
Business is booming in the thrift shop world. Whether people are nostalgic about old board games and books, eager to freshen up their home decor, or simply want to get out of the house, they are shopping at secondhand stores in droves.
According to consumer research firm America's Research Group, 16% to 18% of Americans will go thrift shore shopping in a given year, while 12% to 15% will hit up consignment or resale shops for some retail therapy. This is compared to 11.4% of individuals who shop at factory outlet malls, 19.6% at apparel stores, and 21.3% in major department stores.
The resale industry is a multibillion-dollar enterprise. In 2017, Goodwill Industries alone racked up $5.9 billion in sales generated by its over 3,000 not-for-profit stores, as well as online sales. Indeed, thrift and consignment retail has also found a welcome home on the internet. ThredUp, a popular online consignment shop that recently has confidentially filed to go public, predicts the resale sector could hit $64 billion by 2028.
Online shopping is what usually keeps people out of the larger stores, so one might think a store with no website would be out of luck. For most thrift stores, people have to be in the store to peruse inventory, which changes often. And that's exactly what draws people to thrift shopping: the thrill of the find. From vintage clothing to antique furniture to gently used cookware, there's a little of something for everyone.
Everything old is new again
The popularity of thrift stores and antique shops is more than just nostalgia or a hunt for a good bargain, though. It also shows an affinity toward reuse and repurposing older items. Consumers, particularly millennials, are concerned over the impact buying new has on the environment, so they like the idea of giving products a second life. Plus, from a practical perspective, the pandemic has made people mindful of their budgets as well as their home surroundings -- and thrift stores have made it easier to spruce up one's home at a fraction of the cost.
To take advantage of foot traffic, clustering is a trend that's happening among resale stores. In some areas, antique shops and thrift stores will open close to each other to create a shopping destination that will attract more bargain hunters.
The bottom line
The recent boon for thrift stores shows that in-person shopping isn't extinct. But there needs to be a reason to get people out of the house to shop rather than stay at home and click "buy" online. Thrift stores offer a unique shopping adventure that allows individuals to browse and come home with a new treasure every time. Real estate investors would be wise to keep an eye on this hot sector.