What: Department stores are losing market share to both off-price and resale retailers, as value-driven consumers increasingly seek bargains and secondhand options.

Why it is important: The rise of off-price and resale channels signals a fundamental change in consumer priorities, forcing department stores to adapt or risk further decline.

Department stores in the US are facing mounting competitive pressure as both off-price and resale retailers rapidly gain market share. The inflationary economy is accelerating consumer migration toward value-driven channels, with off-price giants like TJX, Ross, and Burlington outperforming traditional department stores, whose market share has now dropped below 3%. At the same time, the secondhand apparel market is expanding at a pace nearly four times faster than the broader apparel sector, projected to reach nearly $79 billion by 2030. While off-price retailers are maintaining pricing power and volume growth, resale platforms are seeing a surge in transaction volume, though average spend per transaction is declining due to operational fragmentation and intense competition. Department stores, meanwhile, are struggling to keep pace, with many forced to partner with resellers or invest in new strategies to remain relevant. The rise of off-price and resale is fundamentally altering the retail landscape, compelling department stores to innovate, partner, and redefine their role in a market increasingly driven by value and sustainability.

IADS Notes: Forbes in February 2026 analyzes the ongoing consolidation of US department stores, with off-price retailers like TJX, Ross, and Burlington outperforming traditional players, whose share has dropped below 3%. WWD in January 2026 notes that while some department stores are regaining relevance through targeted investments, overall gains remain modest compared to off-price and mass merchants. WWD in September 2025 and Forbes in December 2025 highlight how economic pressures, tariffs, and luxury price hikes are driving consumers toward resale platforms, with department stores and resellers forming new partnerships to capture demand for affordable and sustainable alternatives. CBS News in December 2025 documents the surge in thrift and off-price retail traffic during the holiday season, while Retail Week in February 2026 examines Vinted’s rapid ascent and the mainstreaming of secondhand shopping, forcing established brands and department stores to adapt. Forbes in April 2026 confirms that resale has become a mainstream growth engine, with technology and circular economy models reshaping retail strategies. BoF in April 2026 discusses the operational challenges and user dissatisfaction in the booming online resale market, emphasizing the need for innovation and customer-centric approaches. Collectively, these sources illustrate that the rise of off-price and resale is fundamentally reshaping the competitive landscape, compelling department stores to innovate, partner, and redefine their value proposition to remain relevant.

Second-hand is eating full-price retailers, while off-price is not challenged