Resale is the fastest-growing e-commerce retail segment and is expected to grow at a compounded annual rate of thirteen percent, from 2016’s $18 billion to an anticipated $33 billion in 2021. While resale sites have already co-opted Google search visibility from the brands and off-price retailers examined in L2’s recent Department Stores US: Off-Price Subsidiaries report, the threat of encroachment is also very real for department stores, especially on product listing ads (PLAs) for branded fashion keywords.

Resale is also more likely to appear on sale-related terms, which pushes off-price subsidiaries even further down the page. For example, for the search query “discount tory burch,” the Tory Burch brand is able to capture a key paid search position, but the rest of the listings are a mix of resale retailers and department stores—the most salient of which being a PLA from reseller The RealReal.

Resale Fashion Market

Additionally, appearing on sale and discount-related searches poses a threat to heritage brand equity as resale is at an inherently lower price point already. In order to avoid brand dilution, brands and department stores alike must ensure that equity is protected and pricing disparities are monitored.

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