Following The RealReal’s $300 million IPO in June and its subsequent partnership with Burberry, it seems luxury brands are now waking up to the possibilities the resale boom presents.
On Wednesday, the Boston Consulting Group (BCG) and luxury resale player Vestiaire Collective released a survey that makes another compelling economic case for the secondhand luxury market.
The survey, which including polling from more than 1,000 Vestiaire Collective clients in October 2018 along with the answers from another 12,000 respondents collected by BCG in 2019, points to the many benefits of a healthy relationship between luxury brands and resale, especially when it comes to courting customers.
On Vestiaire Collective’s platform, 62 percent of those surveyed said they would buy a brand again after purchasing a resale item and another 62 percent said they had purchased a brand for the first time on the platform, making the case that resale can be a valuable entry point for shoppers who otherwise lack access to the first-hand, full-price luxury market. Another 71 percent said they lean toward resale items they could not afford at standard retail prices.
Of that group, 57 percent said they would “definitely buy” or at least consider a firsthand purchase in the future. In fact, many secondhand sellers offload their wares in order to buy brand-new luxury products. Nearly one-third (32 percent) of the sellers surveyed admitted to reselling on the luxury platform primarily as a way to raise funds to acquire firsthand goods.
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Even beyond pure revenue, resale can be another way for luxury brands to showcase their commitment to sustainability.
“The second-hand market prolongs the life of luxury products,” Olivier Abtan, managing director, partner and leader of global luxury at BCG, said in a statement. “Most of what is sold on luxury second-hand platforms is of high quality, with 62 percent of the clothes either unworn or hardly worn. Brands wishing to be more eco-friendly benefit from this circular luxury economy.”
This will obviously play well with millennial and Gen Z shoppers, a large portion of whom rate sustainability very high on their list of luxury shopping priorities. The survey found that 70 percent of those young shoppers are “trying to shop ethically” and, of those, 57 percent cited the environmental impact of their purchases as a primary concern.
Despite that, only 13 percent said that sustainability was “extremely important.”
In either case, 96 percent of those polled by Vestiaire Collective and BCG responded that the primary function of resale was to get the products they wanted at a price that it might never be available at firsthand.
However, another 62 percent described resale purchases as a way to find items that were out of stock on the primary market, and for 83 percent, recommerce sites afford to goods unavailable for whatever reason through firsthand channels.
This desire for unavailable product presents a potentially profitable touchpoint for both resale and firsthand luxury purveyors. According to the survey, a cohesive retail partnership between premiums brands and secondhand markets could end up benefiting both sides and elevating the relationship.
“The traditional brick-and-mortar luxury resale industry produced very few players of any significant size as they focused on a specific product category or geographic footprint,” the survey concluded. “In contrast, online resale platforms have won over consumers by offering far greater brand and product assortment.”
The luxury resale market is predicted to see 12 percent year-over-year growth, compared to just 3 percent annual expansion in the primary luxury market, BCG and Vestiaire Collective said. Luxury resale is pegged to rise from a value of $25 billion in 2018 to reach $36 billion in 2021, equaling about 9 percent of all revenue in the luxury sector.