The resale market, buoyed by eco-conscious shoppers and retail appetite, will likely see some M&A moves next year, industry watchers tell Axios. Why it matters: The worldwide apparel resale market could reach $300 billion by 2031 and represent more than 10% of global retail sales, according to Morningstar data. What they’re saying: With the prospect of consumer spending and the economy worsening, the resale market and off-price retailers will likely be resilient, says Alex Taussig, partner at Lightspeed Venture Partners. The consumer, who would be spending money on new, will trade down to second hand or off-price as they look for more discounts,” Taussig says. What’s next: “Especially if the IPO markets are not conducive to some of the larger companies going public, then I absolutely think there will be some consolidation,” says Amy Francetic, managing partner at climate-focused Buoyant Ventures.”We’re going from kind of a cyclical slowdown decline, which could see some companies being sha ken up or shaken out. It could see some reduced competition,” Morningstar equity analyst Jelena Sokolova says. Those who are well-positioned will be the big players, Sokolova says, who are in a good financial position and cash reserves that can “basically still invest to an extent that is needed to support this growth.” The added advantage is that they may “gain more market share during the times that are more difficult and even participate in M&A activity.” like Farfetch, which is moving into beauty, and The RealReal could be market consolidators.It is worth noting that RealReal plans to rein in costs while Farfetch cut its outlook, signaling they will likely take a cautious approach.Context: A growing crop of resale Platforms is driving competition, and also, innovation to win customers. “We’re anticipating a lot of innovation around additional tools that people can use, and the ecosystem really evolving,” Francetic says. Francetic, w hose firm also invested in Beni, a browser tool for second-hand shopping, says that it sees incumbents and upstarts alike working on creative ways to bring down barriers that will attract and retain customers. Between the lines: Privacy policies, like the GDPR in Europe, and Apple’s own protocol have made it less effective for online platforms to reach users. “And so you need to have more revenue spread over the same users to make it profitable, essentially,” Taussig says. “You can’t have all these companies acquiring the same users.” Yes, but: “There is less appetite for investment from investors for something that is less proven, that is less cash generative,” Sokolova says, as capital gets tighter and more expensive.State of play: Circular fashion is in vogue, as some of the luxury giants and established apparel brands jump on the bandwagon.One of the biggest resale deals of the year was South Korean tech giant Naver’s acquisition of US secondhand clothing platform Poshmark for around $1.6 billion.The merger is intended to help Poshmark expand geographically, while also introducing live streaming and image recognition technologies that could help jumpstart slowed revenue growth, Axios’ Dan Primack wrote.There was also a lot of VC activity:Beni, a secondhand shopping browser extension, raised $4 million in seed funding led by Buoyant Ventures. Better Ventures participated.Archive, which builds resale software platforms for brands, raised $15 million in a Series A round led by Lightspeed Venture Partners and Bain Capital Ventures participating.Goodwill, the nonprofit group colloquially known as the OG of thrifting, launched its very own secondhand marketplace.The bottom line: With sustainability top of mind for most retailers and fashion players, brands will keep digging away at resale — whether that’s through partnerships or mergers.