Retail vs. resale: understanding the substitution effect and synergies between fast fashion and second-hand clothing markets - the case of Portugal

Abstract

The Second-hand and Fast Fashion markets do not work separate from each other. Portugal’s booming Second-hand Clothing market is creating an increasing substitution effect with Fast Fashion in consumers, especially those under 30 years old. The number of consumers interested in Second-hand fashion, mainly for sustainability and affordability reasons, is passing those who are not interested. There is growing potential for synergies between the markets. However, Fast Fashion underestimates Second-hand and is resisting making changes to its mass production model, as synergies require either loss of scale or of profit margins.