Welcome to the new world of Pre-Owned luxury

“The best things in life are free, the second best are very very expensive.”

- Coco Chanel

What picture does your mind paints when you hear the word “Luxury”? Let us take a moment here to think. Out of all the heavy words, expensive is a recurrent one that keeps popping up, isn’t it? After all, luxury always resonates with something exorbitant or extravagant. Fast forward to 2020, luxury is far more achievable, reasonable & affordable. Don’t believe me? Well, let us have a look at the phenomenal world of - Pre-Owned Luxury.

Pre-loved or Pre-owned luxury which was once perceived as a disruptor of the ego goods market, is now gaining momentum. Being used as a synonym for low status or feared as a taboo, the luxury resale market is growing four times faster than the primary market, at 12 per cent per year versus 3 per cent respectively. The total resale luxury market accounts to 24 million USD as of 2020.

According to a BCG report, most of the growth in resale comes from the online platforms, which currently generate around 25% of global second-hand luxury market sales. Further catapulting growth, generalist online platforms are expanding to include luxury goods as well.

And it is not only for the aspirational buyers but also affluent sellers who are taking part in this resale market. Especially in the US, where 50% of the luxury buyers are participating in the circular economy, as per the BCG-Altagamma survey. Europe and China are transpiring steadily, however, they are still quite unstructured in that matter. A total of 54% participation comes from Gen Z whereas 48% of Milennials or Gen Y are buying pre-loved luxury goods. These two category of customers are adopting 2.5 times faster than the other age groups.

Some of the major factors contributing to the growth of this thriving resale luxury market are sustainability aspect, awareness of the circular economy system and affordability. Due to the rising environmental consciousness the consumer choices are inclining towards more responsible purchases. The backlash that once was faced by the resale market is now been accepted whole-heartedly by the new generation of accountable consumers. Although there is still the looming question about how luxury and sustainability can be synchronized, more and more brands are now considering it solemnly.

Post the G7 Summit where the main topic was climate change, 32 major fashion brands along with the French President Emmanuel Macron revealed the Fashion Pact. Grabbing headlines for all the right reasons, the pact is an industry wide movement to align the fashion industry with the UN sustainable development goals. Names like the Kering Group, Inditex, Chanel, Stella McCartney, and many more, are more than enough to understand the gravity of the subject.  Furthermore, as per the BCG- Vestiaire Collective survey suggests that 96% of the buyers purchase second-hand luxury goods, as they are looking for good deals/value for money. Initiative like Make Fashion Circular, that brought together leading players like GAP Inc, Burberry, Nike Inc, etc is gaining popularity.

Celebrities too have openly started supporting the pre-loved luxury goods sector. The famous Kardashian-Jenner family have even launched their own designer resale business Kardashian Kloset, featuring their fabulous clothing treasure. Terms like recommerce, nownership are thrown around frequently amongst the new age buyers, who wants to gain the experience of luxury but not own it as their taste keeps changing.

Hence along with the experience, heritage and craftsmanship of luxury products features like timelessness, durability and retail at high price are been evaluated. Most of the sellers usually participate in resale market to purchase another premium product from the primary market. Ambitious buyers usually get introduced to a brand via the secondary market, post which they carry on the brand loyalty when they make their first new purchase from the prime market.

The preowned market also provides accessibility to a greater range of products which is helping further to its growth. Out of all the other luxury products available at lesser prices, rare pieces and limited editions are most sought after. Sometimes so much that the value of the limited-edition second-hand item becomes more than the actual former first-hand price.

Of the buyers surveyed, 62% say that they find the preowned market attractive today because they are looking for sold-out items or limited editions.

With all the influencers and celebrity bandwagon along with the heavy weights of the fashion industry gunning for the resale market, it would be safe to say that the pre-owned Luxury market is definitely an opportunity to look forward to. Supporting the resale market will give benefits to the brands as well, one especially of paramount importance is eventually converting these second-hand clienteles into primary market patrons. Estimated to be USD 36 billion market, it is unequivocally a booming business prospect to invest into and capitalise.

Happy Shopping!