In an era championing sustainability and mindful consumption, a perplexing trend has emerged in American retail. While social media amplifies calls for #underconsumption, ultra-cheap retailers like Shein and Temu are experiencing explosive growth. This contradiction raises two important questions: Who’s driving the boom in high-volume, low-cost fashion? And, more importantly, what does this paradox reveal about the gap between our ideals and actions in consumer culture and consumption as a whole?

Conventional wisdom might point to young, cash-strapped consumers as the primary culprits behind this trend. A recent report by ThredUp found that one-third of Gen Z respondents described themselves as addicted to fast fashion, with more than two in five saying they buy clothes they're likely to wear only once. But dig deeper and a more complex picture emerges. 

Surprisingly, affluent, environmentally-conscious consumers are fueling this surge. Ernest Analytics reports that nearly half of Temu's American sales come from individuals earning over $130,000 annually, with this high-earning demographic representing the retailer's fastest-growing customer segment. Even more striking, The New Consumer and Coefficient Capital found that Shein shoppers are more likely to express concern about sustainability than average consumers.

This paradox extends to Pioneers, our proprietary audience of influential early adopters, as well. We’ve been conducting both qualitative and quantitative interviews with these consumers, focusing on their relationship with new brands and consumption patterns. These trendsetters, who typically champion unique, ethically-minded brands, show an unexpected preference for fast fashion platforms. Approximately 30% of Pioneers, per our research, consider Shein "one of their favorites," compared to just 17.51% of the general population. 

But what drives these normally conscious consumers to act against their stated values? The answer lies in a perfect storm of psychological, economic, and technological factors that have reshaped our relationship with consumption.

Research in consumer psychology offers some insights into this gap. Dr. Kathleen Vohs, suggests that the act of choosing can deplete our self-control, making it harder to resist temptation even when it conflicts with our values. For wealthier consumers, the abundance of choices in fast fashion, combined with their greater purchasing power, may paradoxically lead to more impulsive and less sustainable buying behavior. And for our Pioneers, we know that – based on our in-depth interviews – the constant influx of new styles on platforms like Shein and Temu offers a low-risk playground for style experimentation, appealing to their love of access and new experiences. 

These psychological factors are compounded by broader economic and social trends. The COVID-19 pandemic shifted spending habits towards goods over services, a trend that has persisted. Rising inflation has made even higher-income consumers more price-sensitive. The seamless integration of social media and e-commerce has made impulse buying easier than ever. As Dan Frommer, founder of The New Consumer, aptly puts it, "The allure of cheap stuff is universal, almost, to American culture."

The scale of this consumption is staggering. According to McKinsey, consumers are buying 60% more clothing than they did in 2000 and keeping it only half as long. This surge, particularly among the supposedly eco-conscious, presents a complex challenge for brands. How can businesses reclaim the cash of consumers looking for cheap dupes of their premium products? And in doing so, push consumption habits in a slightly more sustainable direction? 

The solution is being worked out by new platforms as well as the brands themselves. Phia, a new fashion platform, scans retailers for second-hand alternatives at user-specified price points, providing options at the moment of decision. Croissant, a shopping tool for reselling, offers guaranteed buyback prices for products on retail partners' e-commerce listings and provides buyback values for other items through its app and browser extension. 

Then you have brands reclaiming their own inventory for resale like Patagonia’s Worn Wear program which buys back used Patagonia clothing, repairs it, and resells it at a lower price or Ikea’s newly established peer-to-peer marketplace “Ikea Preowned,” where users can buy and sell Ikea products through the manufacturer.

As we look to the future, the question remains: Can we create a retail landscape where our actions better align with our values? The challenge lies in bridging the gap between our aspirational selves and our wallets as, currently, it appears it is very hard to make high quality products at an affordable price (or not something brands really want to do). New approaches will show how brands can help leverage consumer psychology and technology to help us make more sustainable purchase choices while getting what we’re after. That way we can start to reconcile our desires and willingness to spend with better consumption habits and a more concerted effort towards buying sustainably.