While secondhand has traditionally been seen as a threat to luxury brands, a new report from Vestiaire Collective and BCG suggests that the resale market is really a boost to the luxury industry.
Luxury brands should be embracing retail for three reasons, says the report: resale is a way for luxury brands to recruit consumers, secondhand sellers are predominantly first-hand buyers, and secondhand has first-class sustainability credentials.
Called Why Luxury Brands Should Celebrate the Pre-Owned Boom, the survey from Vestiaire Collective and Boston Consulting Group reveals that buyers of pre-owned luxury are usually those who don’t have access to the primary market—some 71% said they lean towards items and brands they could not afford firsthand.
As second-hand luxury customers mature, their purchasing power tends to increase, making them ready to buy luxury in the primary market. Of those surveyed, 62% said that they bought a brand they like for the first time secondhand on Vestiaire Collective, with almost all of these saying they would consider buying that brand again. Some 57% of those questioned said they would either definitely buy or would consider buying the item firsthand.
Typicaly, secondhand sellers use resale to get back some of their money on firsthand purchases, often with the aim of then buying new, full-priced luxury products. Indeed, 32% said they were primarily selling because they wanted to purchase new firsthand goods. And most pre-owned sellers do not tend to make many secondhand purchases. For example, of total pre-owned sales on Vestiaire Collective, 70% are generated by sellers who rarely purchase secondhand.
And when it comes to sustainability, the pre-owned market not only extends the lifetime of luxury products, but responds to a growing awareness over environmental concerns linked to fashion.
Millenials and Gen Z in particular are placing greater importance on the social and environmental impact of their purchases than previous generations.
The Vestiaire Collective and BCG survey found that over 70% are trying to shop ethically and 13% said that sustainability is extremely important to them. Of those that shop ethically, 57% say cite environmental impact as their primary concern.
Global sales in the secondhand luxury market are predicted to grow at an average of 12% year-on-year, compared to a 3% average for the core luxury market. Turnover in the resale industry is forecasted to increase from $25bn in 2018 to $36bn in 2021, representing around 9% of the luxury market.