The Rise of Discounters and Resale Platforms in the 2025 Holiday Season

The 2025 holiday season has emerged as a pivotal moment for value-driven retail and circular economy models, driven by macroeconomic pressures and shifting consumer priorities. As inflation persists and labor markets remain soft, U.S. consumers are recalibrating their spending habits, prioritizing affordability without entirely sacrificing discretionary indulgence. This dynamic has created fertile ground for discounters and resale platforms to thrive, offering both economic relief and alignment with sustainability trends. For investors, the intersection of these forces presents compelling opportunities to capitalize on structural shifts in retail and consumer behavior.

Macroeconomic Tailwinds: A Shift Toward Value and Pragmatism

The current economic climate is marked by a stark recalibration of consumer expectations. According to a report by McKinsey, U.S. consumer optimism has dropped by 16 percentage points since the beginning of 2025, with 75% of shoppers trading down in at least one category. Yet, 39% still plan to splurge on items like fashion, dining, and travel. This duality-pragmatism paired with selective indulgence-has fueled demand for platforms that blend affordability with quality.

Gen Z, in particular, is reshaping the retail landscape. While cutting back on essentials like groceries, this cohort is increasingly allocating budgets to discretionary categories such as beauty and fashion, often using credit cards to facilitate purchases. Their preference for digital tools is also evident: 52% of shoppers plan to leverage AI for deal comparisons and personalized recommendations. Meanwhile, e-commerce remains dominant, with mobile commerce accounting for 56.5% of U.S. e-commerce sales. Retailers that integrate omnichannel strategies-combining digital convenience with in-store experiences-are best positioned to capture this evolving demand.

The Circular Economy: From Niche to Mainstream

The circular economy is no longer a fringe concept but a mainstream imperative. The global recommerce market, valued at $525 billion in 2025, is projected to grow at a 14.8% CAGR, reaching $2.087 trillion by 2035. This surge is driven by both environmental consciousness and economic pragmatism. Sixty-four percent of consumers view pre-loved products as environmentally beneficial, while 47% consider resale value when purchasing apparel.

Key players are innovating to meet this demand. ThredUp, for instance, eliminated upfront and monthly fees for its resale-as-a-service platform, spurring a 34% year-over-year revenue increase in Q3 2025 to $82.2 million. Similarly, Back Market and iFixit's collaboration on repair guides and toolkits is extending device lifespans, with potential carbon emission reductions of up to 68% if adopted widely. These initiatives highlight how circular economy models are not only sustainable but also scalable, offering long-term profitability.

Case Studies: Strategic Wins in a Competitive Landscape

Several companies exemplify the successful integration of macroeconomic tailwinds and circular economy principles. ThredUp's Q3 2025 performance underscores the power of AI-driven logistics and a rebranded platform, with adjusted EBITDA rising to 4.6% of revenue. Meanwhile, IKEA's resale program contributed to a 3% increase in sales volumes despite a slight overall sales dip, demonstrating the appeal of affordable, sustainable furniture.

In the electronics sector, Back Market's business model-charging commissions on certified refurbished devices-benefits from a fragmented market and growing consumer demand for eco-friendly alternatives. Partnerships like its collaboration with iFixit further enhance value by promoting repairability, aligning with regulatory trends such as the "right to repair" movement.

Investment Opportunities: Where to Allocate Capital

For investors, the key lies in identifying platforms and strategies that address both economic and environmental imperatives. First, AI-driven resale platforms like ThredUp and Back Market are well-positioned to scale as consumer reliance on technology for shopping decisions grows. Second, brands launching branded resale programs-such as IKEA and LEGO-can capture loyalty while reducing waste. Third, partnerships that integrate repair and refurbishment services, as seen with Back Market and iFixit, offer a blueprint for sustainable growth.

The circular economy's projected expansion to $4.5 trillion by 2030 underscores its long-term viability. However, success requires more than market trends; it demands operational agility and a commitment to innovation. Retailers that fail to adapt risk obsolescence in a landscape increasingly defined by value, sustainability, and digital integration.

Conclusion

The 2025 holiday season is a microcosm of broader structural shifts in retail. As consumers balance economic caution with aspirational spending, discounters and resale platforms are redefining value. For investors, the imperative is clear: prioritize companies that align with macroeconomic realities while pioneering circular economy models. The winners in this space will not only navigate current challenges but also shape the future of retail.