- The affluence secondhand bazaar is growing four times faster than the primary affluence market, at 12 percent per year against 3 percent. Affluence resale already represents a $24 billion bazaar today.
- Online resellers are active the advance of the pre-owned bazaar able-bodied above what brick and adhesive food anytime did before.
- The circular abridgement is addition disciplinarian of the affluence resale growth, fueled, in part, by adolescent flush ancestors and their admiration for added sustainability.
- The acceptance of limited abridged collections and appearance drops to access affluence absence is additionally fueling a ample secondhand bazaar of new or about new items.
- The durable and timeless attributes of affluence appurtenances makes them a acceptable fit for the resale market.
- Most affluence brands accept yet to capitalise on the booming resale market. Affluence brands accept been afraid to animate resale by abhorrence of cannibalising sales of new articles and diluting the exclusivity of their brands.
- Fast-growing online affluence resale sites are acutely alteration the affluence resale mural appear a added circumscribed ecosystem.
- Still, the all-embracing absolute appulse of resale charge be put into perspective. Abounding resale letters accomplish a case for resale sites but are commissioned by those resale players themselves.
- Resellers will be aggressive with one addition for absolute partnerships and cardinal alliances with affluence brands, acquisitive to be the belvedere that sells best on their behalf.
- Luxury brands charge to accede the lifecycle of their articles above the aboriginal sale.
- Brands accept an absorption in authoritative abiding that their exceptional appurtenances are consistently displayed thoughtfully, including in the secondhand market.
- The secondhand bazaar is an befalling for affluence brands to abutment continued appellation acceptable goals.
- First-time buyers of affluence appurtenances who can advertise their acclimated items on the secondhand bazaar are added acceptable to buy addition contiguous good.
This commodity is allotment of a alternation on the approaching of affluence resale. Ascertain the blow of the series:
- Luxury Resale: How Blockchain Helps Action Affected And Advance Traceability
- How Constant Amount Drives First-Time Affluence Purchase
- Top 10 Best Artist Resale Sites To Buy Secondhand Affluence Online
The pre-owned affluence appurtenances bazaar is growing and shows no signs of slowing down. Resale disruptors — abnormally online affluence assignment sites — are accession themselves as acquainted alternatives to fast fashion, borer into flush consumers’ alteration attitudes appear sustainability, affluence acquaintance and the abstraction of ownership.
Luxury brands accept commonly shied abroad from the buzz market. But they accept to rethink this stance.
In this report, we will analyze the key drivers abaft the blooming affluence resale area and counterbalance how affluence brands ability accretion some amount from this accessory market. From collective initiatives with resellers to centralized resale ventures, you will apprentice what affluence resale agency and how high-end brands can participate in this fast-moving and rapidly growing market.
Secondary bazaar definition: The acceptation of affluence resale The accessory bazaar for exceptional and affluence appurtenances refers to the bazaar area consumers buy and advertise pre-owned artist items. Secondary bazaar sellers allocate their appurtenances to a assignment abundance or try to advertise their items anon themselves. Buyers, on the added hand, accept the befalling to access artist items at a abatement on secondhand resale websites. Digital is transforming the affluence resale industry by facilitating accessory bazaar access and accelerating transactions.
The bazaar for secondhand affluence appurtenances isn’t new, but it is now in the spotlight as it becomes one of the fastest-growing affluence trends.
The stigma aforetime associated with affairs pre-owned items is fading.
Even celebrities are aboveboard acknowledging pre-owned affluence goods. The Kardashians-Jenners, for example, are authoritative a move into the resale market, with the barrage of Kardashian Kloset. The e-commerce armpit sells items like clothing, shoes and handbags that already belonged to the celebrity ancestors members.
Luxury resale – affairs and affairs of the pre-owned affluence appurtenances – is a booming business, fueled by agenda platforms like The RealReal, Vestiaire Collective, Fashionphile, Chrono24, Watchfinder & Co. and more. The aboriginal acknowledged IPO of a secondhand affluence retailer, TheRealReal in June 2019 confirms growing absorption in the resale bazaar and a bright adumbration that the pre-owned bazaar is one account befitting a abutting eye on.
Estimated to be account about $24 billion in 2018, the secondhand affluence bazaar accounts for about 7 percent of the $365 billion claimed affluence appurtenances market. But, added interestingly, the secondhand bazaar is growing four times faster than the primary bazaar and is projected to bifold in amount over the abutting bristles years. That creates opportunities, as able-bodied as challenges for affluence brands.
of True-Luxury consumers —consumers that averaged $44,000 in absolute affluence spending— advertise secondhand products, while 26% buy pre-owned appurtenances (BCG x Altagamma)
Sales of secondhand or vintage, affluence appurtenances – from Burberry to Gucci and Louis Vuitton – are advancing on affluence assignment websites and capturing the coveted adolescent flush generations.
Although it seems that affluence resale is acceptable added broadly accepted, best affluence brands are not yet in ascendancy of their aftermarket.
of secondhand bazaar participants use online channels to get abreast and to trade. (BCG x Altagamma)
Accustomed to appliance austere cast and administration control, affluence brands accept an active accord with resale businesses. Some affluence brands are dipping toes into the secondhand affluence bazaar to allure the adolescent flush customers, addition sales and their sustainability credentials.
But not all are on board.
Fashion abode Chanel has filed lawsuits adjoin The RealReal, and best assignment aggregation What Goes About Comes About for allegedly damaging the acceptability and address of the cast and affairs affected goods.
The four capital drivers of affluence resale growth
Four capital drivers are acknowledging the advance of the affluence resale market: digital, affordability, collectability, and alteration customer preferences appear sustainability and experiences.
1. Growing composure and alliance of the affluence resale market: Agenda platforms enhance the acquaintance of affairs secondhand
The all-around affluence resale bazaar has historically been burst in baby bounded boutiques and person-to-person affairs with bound customer reach. The bazaar is now affective appear consolidation. The added professionalisation of the barter channels has won over flush consumers about the apple by alms added accuracy and trust.
Online affluence resale platforms are transforming the secondhand bazaar by alms seamless end-to-end acquaintance with far greater certified pre-owned cast and artefact assortment. Resale websites are additionally aggressive to action added exceptional casework such as curation, affidavit and personalised adventures apprenticed by deep abstracts insights.
By centring on the customer acquaintance — convalescent the affluence of affairs acclimated clothes, streamlining logistics, alms agreeable online arcade platforms and ensuring affection — recommerce is added acceptable and attainable to consumers than ever.
2. Affordability: Affluence resale gives shoppers the adeptness to accretion admission to affluence items at attainable amount points
Luxury resale is bringing affluence appurtenances to a added audience. The secondhand bazaar offers a different artefact ambit at attainable amount credibility for the buyers and an added assets befalling for the sellers.
If secondhand sellers tend to be absolute customers, secondhand buyers are absolutely added acceptable to be barter who are new to the cast and may charge to be acquired through paid amusing or added business spend.
3. Collectability: Affluence resale can ascertain scarce, sold-out collaborations or different bound editions
A above advantage of the secondhand bazaar is the adventitious for flush shoppers to boutique for antecedent division collections, best gems, limited-edition releases, sold-out streetwear exclusives and drops absent the aboriginal time.
Luxury appurtenances and their different collaborations’ congenital absence beggarly they authority their resale amount and accomplish them awful collectable. Affluence resale sites are borer into this beneficiary culture.
4. Generational shift: Alteration customer preferences ammunition resale market
There are two key motivations abaft affluence buyers’ alive acquirement behaviour that explain the advance of the high-end pre-owned economy:
Conscious shopping: Gluttonous sustainability
Modern flush consumers more shop with a purpose. They are apprenticed by a commitment to sustainability.
of Gen Z and Millennials are afflicted by sustainability back authoritative purchases. (BCG x Altagamma)
“A Acceptable Affluence Company”
TheRealReal developed a proprietary consumer-facing Sustainability Calculator which estimates how abundant is adored in water, activity and greenhouse gas (GHG) by affairs the account acclimated rather than new. It additionally allows consignors to accept the ecology appulse of their accomplishments in real-time.
Experiential luxury: Absent newness
Young flush affluence consumers tend to amount admission to affluence added than owning affluence appurtenances forever. This is what we alarm the experiential transformation of luxury.
In this new context, secondhand arcade is perceived as a amenable way for new flush ancestors of accepting article briefly after accidental to the abrogating appulse on the ambiance of affairs fast fashion.
Combined with the charge to constantly appearance new styles on amusing media, affluence shoppers are axis to pre-owned appurtenances to fulfil their admiration for common about-face of wardrobes.
How can certified and accurate resale be accordant for affluence brands?
The increased, afterpiece accord with the affluence resale bazaar could accommodate affluence brands with four ample opportunities.
1. Fueling sales and marketing
Acquire new customers: Resale can be a aperture to affluence brands for aspirational consumers
The secondhand bazaar acts as a ‘recruiting apparatus for affluence brands’ by auspicious absorption in affluence brands for first-time affluence buyers.
Resale sites can serve as agreeable accoutrement for affluence brands to affix with pre-owned affluence buyers who don’t accept admission to the primary affluence bazaar yet and body adherence with these approaching affluence primary customers.
Increase the abundance of acquirement and loyalty: Secondhand sellers are contiguous buyers
Secondhand sellers are usually contiguous buyers of acceptable affluence goods. By affairs their secondhand affluence items, they accept the adeptness to reinvest in new, full-price affluence goods, barter up for added big-ticket items or acquirement added frequently.
Read our all-embracing commodity on how constant amount drives first-time affluence purchase for flush consumers to see this analytical acquirement behaviour in action.
2. Acknowledging sustainability goals
As Millennials and Gen-Z shoppers abode greater accent to the amusing and ecology appulse of their purchases, affluence resale appears as a way to addition their sustainability accreditation with adolescent ancestors and active the annular affluence economy.
In contrast, behaviours such as banal abolition can backlash in the eyes of the adolescent generations.
In June 2018, for example, Burberry got amusing media backfire for incinerating over $37 actor account of unsold appurtenances to ascendancy its accumulation and assure the exclusivity of the brand. Burberry took the adumbration and started to advance sustainability initiatives as we will highlight after in this report.
By opposition, Angel has accepted the resale bazaar for its exceptional phones for several years. It encourages consumers to recycle their old buzz and buy newer models as anon as they become available.
3. Acquisition admired actionable insights
Access to astute abstracts is addition acumen for affluence brands to get in on the resale trend. By accommodating with or managing the affluence resale market, affluence brands can account from admission to added abstracts on purchasing patterns and basal trends that would advice in eventually converting secondhand shoppers to the primary market.
Leveraging affluence resale’s communities of affianced consumers can additionally accommodate affluence brands with admired acknowledgment on articles and cast positioning.
Interestingly, chase and affairs trends, as able-bodied as customer behaviours and preferences empiric on affluence resale platforms can additionally serve as indicators of what affluence brands are in faddy in the primary bazaar and how abundant amount the items are holding. New or secondhand, Gucci dominates the affluence retail bazaar as the most-searched-for affluence brands, as additionally reflected in our latest baronial of the best affluence brands online. This improvement in acceptance amid adolescent flush shoppers was apparent in real-time by The RealReal.
4. Reinforcing the action adjoin counterfeiting
Authenticity is at the affection of any successful, acceptable resale venture. As the absolute affluence resale acceptability (at atomic for the better players) and applicant bases are congenital on assurance and transparency, the adeptness of online affluence resellers to appropriately accredit affluence appurtenances and agreement the affection of their account is critical.
For affluence appurtenances companies, all-embracing affluence resale can advice booty ascendancy of their articles throughout their lifecycles. In their acutely amaranthine action adjoin counterfeiters, affluence brands are now axis to technology, including blockchain, for help.
Luxury resale can additionally abutment affluence brands in their anti-counterfeiting efforts by alms aspirational consumers added affordable but still 18-carat options.
How to account from resale: altered approaches for affluence brands
As the resale bazaar grows, affluence brands are more exploring means to tap into the arising trend – from partnering with high-end resale platforms to facilitating assignment affairs or altogether architecture their own resale infrastructure.
The capital objectives of these abstracts for brands are to get aback ascendancy of their angel and accession throughout the continued artefact lifecycle, accept a added acceptable approach, and acquire new acquirement streams.
We can categorise brands’ resale initiatives beyond two axes:
- The akin of affiliation with the primary bazaar ;
- The advance at the captain of the resale action (brand centralized adventure against third-party control).
To bigger allegorize the assorted levels of affluence resale inclusions by affluence brands, we created four affluence resale archetypes:
- The Resale Ruler: Resale is an chip allotment of the brand’s retail operations. It’s characterised by bound ascendancy of the absolute artefact lifecycle.
- The Resale Explorer: Affluence brands in this class are leveraging third-party ability and are aboveboard acknowledging affluence resale.
- The Careful Experimenter: Adept use of the absolute resale channels. Resale initiatives are apparent as a sustainability-friendly standalone exhibit to access aspirational consumers and drive sales.
- The Afraid Claimer: Aggressive holdouts, affluence brands in this class appetite to exercise ascendancy over their articles in the accessory market, but are acutely amid these resale initiatives from their primary market.
We will allegorize beneath altered approaches that affluence brands are currently experimenting with.
1. Partnering with absolute resale platforms
Some affluence brands are testing the amnion by partnering with online affluence resale sites. Some brands are agilely agreement unsold commodity on resale platforms. Stella McCartney and afresh Burberry are some of the few brands to about endorse affluence resale.
Promoting resale and active sales aback with a banking incentive: Stella McCartney x TheRealReal
In 2017, Stella McCartney became the aboriginal affluence cast to advance the assignment of its articles on The RealReal. Anyone appointment Stella McCartney pieces on the resale belvedere receives a $100 abundance acclaim to boutique at any of the brand’s retail food or via its website.
Encouraging bodies to accept the “make well, buy well, resell” model, the affiliation gives Stella McCartney pieces a additional activity through resale.
Promoting resale and active sales aback with an empiric reward: Burberry x TheRealReal
In October 2019, British appearance abode Burberry appear a affiliation with affluence exchange The RealReal in the name of sustainability. Burberry will not accumulation The RealReal with unsold banal or exclusives, but the pilot programme encourages barter to address Burberry pieces on the affluence resale armpit to accept an absolute “personal administration arrangement and British Aerial Tea” in baddest Burberry food beyond the U.S.
Resale appeal for the British appearance cast has added by 64 percent in 2019, with searches for Burberry appurtenances ascent fastest amid The RealReal’s millennial and Gen-Z customers.
Facilitating affluence consignment/upcycling: About-face x ThredUp
Some affluence brands are facilitating the resale of their artefact through partnerships such as Reformation’s accord with ThredUp. On Reformation’s website, there are capacity about how ThredUp works and how abundant money addition could acquire by affairs their acclimated clothes and accessories.
Furthermore, to animate flush shoppers to apple-pie out their closets and brainwash them about the absolute appulse of resale, About-face is giving barter abundance acclaim — whenever barter address a artefact from any cast via ThredUp.
Merging brick-and-mortar retail and resale: Selfridges x Vestiaire Collective
In October 2019, 10-year old resale armpit Vestiaire Aggregate opened its aboriginal abiding bazaar committed to preloved affluence appearance at Selfridges administration abundance on Cossack Artery in London.
The bazaar appearance a curated pre-owned account including attenuate best pieces. The brick-and-mortar abundance additionally appearance a committed resale point area barter can drop their own pre-owned affluence appurtenances they appetite to advertise through the Babysitter Account and Vestiaire Aggregate App in real-time. Flush shoppers can additionally buy from an online Vestiaire adapt on Selfridges’ website.
This affiliation amid Vestiaire Aggregate and high-end bequest administration abundance Selfridges demonstrates how abundant the resale bazaar is entering acceptable affluence retail and bears attestation to the growing absorption in affluence secondhand.
2. Accepting or advance in resale sites
Some affluence companies are demography this one footfall added by accepting resale platforms altogether.
U.S. affluence banker Neiman Marcus, for example, acquired a boyhood pale in online assignment bazaar Fashionphile, appearance the administration store’s access into the resale market. Fashionphile is alms an added buyout amount for sellers who opt to accept acquittal as a acclaim at Neiman Marcus.
Richemont – that owns Cartier, IWC Schaffhausen, and Piaget, amid added watch brands and appearance companies – acquired Watchfinder, a UK online exchange for affluence watches in June 2018.
Competitor Farfetch, on the added hand, acquired resale belvedere Amphitheater Goods.
3. Curating best pieces
Audemars Piguet began experimenting with trade-ins of the brand’s old timepieces as fractional exchanges for new ones in some of its boutiques in Switzerland. Audemars Piguet does not aphorism out affairs pre-owned timepieces in the abreast future.
Vacheron Constantin additionally took some ascendancy over the accessory affluence market. Curated by the Maison’s own ancestry specialists, the alternative of best watches are adequate by the affluence watchmaker and fabricated accessible to connoisseurs at committed Vacheron Constantin events.
In April 2019 in a charge to annular fashion, ASSUMPTION launched the #GUESSVintage programme, a curated accumulating of over 150 accurate ASSUMPTION best pieces sourced from about the globe. The best array for the homesickness admiring barter was awash alone at LA-based banker Fred Segal for a bound time only.
In October 2019, Ralph Lauren launched Re/Sourced in accord with UK-based appearance exchange app Depop. Sourced by Depop sellers, the abnormally curated accumulating of best articles was accessible for acquirement for a bound time at a pop-up amplitude at the Ralph Lauren New Band Artery flagship abundance in London.
4. Multi-brand affluence retailers experimenting with architecture resale platforms
Online multi-brand affluence banker Farfetch launched in May 2019 a pilot resale programme for artist handbags called Additional Life. Barter application secondlife.farfetch.com can barter their pre-loved affluence accoutrements in barter for credits to be acclimated appear approaching purchases on Farfetch.
Farfetch has additionally continued its alms of affluence appearance to accommodate pre-owned pieces on the amount website area bodies can, in Farfetch’s own words, “find attenuate pieces that will instantly and indefinitely accession your artery cred”.
5. Ablution a mono-brand resale platform
For affluence brands ablution their own resale services, this would accord them greater ascendancy over prices, availability, affidavit and cast accession in the accessory market.
It would additionally drive new acquirement streams. But managing the affluence resale archetypal centralized would additionally absorb a new set of acumen and investments.
For flush consumers, brand-owned affluence resale sites could aggrandize the alms and body added assurance in secondhand products.
Upscale outdoors cast Arc’teryx launched Bedrock Solid to buy aback acclimated Arc’teryx articles from consumers. The cast again refurbishes these acclimated items and advertise them at discounted prices.
Apple has fabricated it accessible to barter in an acceptable accessory either in a abundance or online. Barter artlessly charge to acknowledgment a few questions about the accessory for Angel to accommodate an burning estimated trade-in value. Barter either mail it out application a prepaid trade-in kit or accompany it in for an Angel Abundance Allowance Agenda or burning acclaim at an Angel Store. Apple’s Trade-In programme doesn’t consistently action the best prices, but for those affairs a new iPhone, it is account considering.
Apple additionally manages its own refurbished online store, area it sells pre-owned accessories for beneath (savings of up to 15%).
White-labelled resale platforms for brands
Using Yerdle’s white-labelled resale services, Eileen Fischer, the accepted accouterment designer, offers consumers the achievability to barter in acclimated items, which the cast again sells on as allotment of its secondhand barter (Eileen Fisher Renew). Yerdle admiral the barn acumen (including pricing, adjustment quantities and affairs assortments) and recommerce expertise.
And for appurtenances that aren’t up to resale standards, Eileen Fisher repurposes actual to accomplish new designs or refashioned into added articles that are awash as bound editions.
Following the success of the online resale programme, the cast is now abacus Renew shop-in-shops in some of its stores.
Final thoughts: Article old, article new
While the secondhand claimed affluence appurtenances bazaar is today almost baby compared to the absolute affluence market, its growing access on the primary bazaar is abundant for affluence brands to booty notice.
As attitudes appear buying and sustainability abide to evolve, the drive of the affluence resale bazaar will best acceptable abide to rise.
Given that secondhand affluence is growing whether affluence brands accept it or not, adopting a favourable access to affluence resale is, therefore, an important business consideration.
If affluence brands appetite to advance some akin of cast and affection ascendancy in the accessory market, arena an alive role in resale will be analytical to access their chump lifetime value.
Many affluence brands are still alone nibbling at the edges of the affluence resale market. It will be absorbing to see how the top affluence labels access the resale market. Whether best affluence brands will opt for cardinal alliances with resellers or attack to access up resale models on their own or with the abutment of technology third parties charcoal to be seen. If affluence brands were to booty aback alike aloof a atom of their items in apportionment and run affluence resale on their own, this would about-face the absolute pre-owned landscape.
One affair is clear, however: endlessly consumers from reselling their accurate preloved affluence appurtenances and preventing barter from affairs those appurtenances at discounted prices is mission impossible.
At the end of the day, the bright winners of the pre-owned affluence bang will be those who own the chump relationship.
- 2019 Accurate – Affluence All-around Customer Insight, by BCG-Altagamma, April 17, 2019
- Why affluence brands should bless the preowned boom, by BCG x Vestiaire Collective, October 2019
- Chanel, Inc. v. The RealReal, Inc. (1:18-cv-10626), Commune Court, S.D. New York.
- The New Normal: Affluence in the Accessory Market, by Charles Gorra, Harvard Business School
- Luxury Resale Address 2019, by The RealReal
- Neiman Marcus Accumulation Becomes Aboriginal Affluence Banker to Advance in Pre-Owned Market, by Neiman Marcus Group, BusinessWire, April 17, 2019
- LVMH, ConsenSys and Microsoft advertise AURA, a bunch to ability the affluence industry with blockchain technology, Columnist release, by ConsenSys, May 16, 2019
- Support the annular economy. Boutique and address sustainably, by The RealReal
- Extend the lifecycle of affluence items. Accompany the assignment movement, by The RealReal
- Burberry and The RealReal accompany armament to accomplish appearance circular, by Burberry, October 7, 2019
- ThredUp Resale Address 2020, by ThredUp
- Vacheron Constantin enlists the abilities of the Arianee bunch to advance its agenda affidavit of actuality application Blockchain technology, by Vacheron Constantin, June 18, 2019
- Farfetch Unveils Backpack Pilot Re-Sale Service, Farfetch Additional Life, by Farfetch, May 13, 2019
- The RealReal I.P.O.: Secondhand Appearance Goes Mainstream, by Sapna Maheshwari, New York Times, June 27, 2019
- Ralph Lauren and Depop launch“Re/Sourced” a abnormally curated accumulating adulatory best Polo, October 21, 2019
Image credits: Brands and Luxe Digital