Recommerce of Luxury Fashion

We’ve often heard about pre-owned cars however, pre-owned luxury was not something that many have imagined a few years back, and now it’s the mainstream. With the rise in disposable income, the population is shifting towards pre-owned luxury goods. The luxury second-hand market is growing 4 times faster than the primary luxury market, at 12 percent per year versus 3 percent. It is the Millennials and Gen Z who are adopting secondhand fashion 2.5 times faster than other age groups.

The notion that “Luxury fashion is a commodity only purchased and owned by the rich” is now beginning to fade away. These pre-owned luxury websites are giving fashion lovers the opportunity to fulfill their dream of owning their first Louis Vuitton bag or that Chanel or Gucci bag or shoe they’ve been eyeing for so long. The lifecycle of luxury commodities is way more than mass products or even premium products, making them an excellent choice for investments as well.

The RealReal (TRR), founded by e-commerce entrepreneur Julie Wainwright in 2011, was the first luxury reseller to go public in June 2019. Even before going public, the company raised more than $350 million in funding. As of now, the share price of The RealReal is $15.90. Other Luxury resale brands that took the digital platform were Vestiaire Collective, Fashionphile, Chrono24, Watchfinder & Co., Confidential Couture, The LuxuryCloset, to name a few.

Factors that fueled the Recommerce of Luxury Fashion:

1. Digital Platform

The global luxury resale market has always been available in small local boutiques at various places which restricted their reach to people other than the ones that lived nearby or visited the place. After the availability of the digital platform, the audience reach has increased to an unimaginable number, playing a major role in the rise of the secondhand luxury market.

2. Affordability

The digital luxury resale market has brought luxury items to a wider audience with their accessible prices. The items are also segregated on the basis of ‘never been used’, ‘gently used’ to ‘fairly used’ with ranking out of 10 as well for the convenience of the customers as well. People who are new to the brands and are willing to try the products are now moving towards the Pre-Owned Luxury companies for the first experience. Affordability is not just limited to discounts, but the companies also provide EMI options for payment for items which only makes it even more convenient.

3. Unearth Sold Out or Limited Editions

Before the digital platform was made available to the people, it was the local luxury reselling shops where people found certain gems that had been lost but had the worth of a dime and if you are lucky, even at thrift stores you could find items that were luxury but too old to be found in the store or were of a limited collection. However, with online resellers, the chances of finding something that has been sold out or was extremely rare has risen, making this one of the biggest advantages for the buyers.

4. Sustainability

The customers have now shifted from shopping frivolously to now shopping with a purpose, with a commitment to sustainability. The RealReal developed a proprietary consumer-facing Sustainability Calculator which estimates how much is saved in water, energy and greenhouse gas (GHG) by buying the item used rather than new. This is something that all Pre-Owned Companies should use in order to encourage customers to buy pre-owned goods by making them see what difference this decision of theirs could make.

5. Experiential Luxury

Millennials and Gen Z, who are the two major audience section and consumers of the Pre-Owned Luxury goods are in constant search for newness where they tend to value access to luxury more than owning luxury goods forever. They prefer investing in secondhand goods with deep discounts rather than paying double or even more for the same item at the brand’s store.

With all the benefits that Pre-Owned Luxury companies have provided to the customers, the main concern is the authenticity of the luxury items. With the rising number of Sophisticated Counterfeits, the question on the authenticity of items has risen inexplicably.

Luxury Companies have joined hands with Blockchain technology for keeping track of the product throughout its lifecycle. Blockchain acts as a gatekeeper by enabling unfailing traceability and recording throughout the entire product’s journey. Louis Vuitton’s parent company LVMH partnered with Microsoft and New York-based blockchain software technology ConsenSys to announce the launch of AURA, a blockchain based-based platform for authenticating luxury goods.

Richemont-owned Swiss Luxury watchmaker Vacheron Constantin, another world-renowned brand also uses blockchain for authentication and anonymous traceability.

Secondhand luxury platforms are now increasingly investing in quality check and authentication experts to provide a safe and trustable platform for affluent consumers to buy and sell luxury items. As the luxury resale market continues to grow and counterfeit culture persists, the ability to verify quickly and easily that a product is authentic is becoming a necessity for any premium or luxury brand. This is where blockchain will soon be entering the commercial space for Pre-Owned Luxury companies.

I thoroughly enjoyed writing this post and really hope that everyone whos reads it has the same experience. Share your thoughts and views in the comment section below or on the facebook page @theuralway or on my Instagram @theuralway. Also, make sure to subscribe to my blog so that you get notified every time I post something new!

Until next time,

Love & Hugs.