Boston Consulting Group and Vestiaire Collective have released a new study focusing on the second-hand fashion and luxury market. The study predicts that by 2023, the second-hand market will make up 27% of consumers’ wardrobes, creating a strategic opportunity for brands.
The report, titled “What the Acceleration of the Second-Hand Market Means for Fashion Brands and Retailers”, is based on surveys conducted in 2020 and 2022, with 6,000 and 2,000 consumers respectively. It explores the major trends in the resale industry and the motivations of second-hand buyers.
The pandemic has played a significant role in driving the growth of the second-hand market, as luxury brands like Balenciaga, Jimmy Choo, and Hugo Boss incorporate sustainability into their strategies. Sarah Willersdorf, BCG’s Global Head of Luxury, states that consumers have fully embraced the second-hand market, resulting in a great opportunity for brands to attract new customers while appealing to existing buyers who value sustainability, affordability, and exclusivity.
According to the study, luxury brands are advised to either establish their own resale operations or collaborate with specialized platforms to handle logistics and payments. This will allow brands to tap into the expanding second-hand market and establish a presence through test and learn approaches or long-term strategies. Notably, nearly 60% of consumers have either discovered or made their first purchase from a brand through the second-hand market.
The research also reveals the preferences of buyers and sellers in the second-hand market. Since 2020, the market has tripled in size and is now valued at $100 to $120 billion globally, representing a significant portion of the apparel, footwear, and accessories sector. Consumers are drawn to the second-hand market due to their preference for slow consumption, affordability, and a wider variety of products from both current and past seasons. It is projected that by 2023, second-hand items will make up 27% of consumers’ wardrobes.
Gen Z consumers of luxury products especially show a strong interest in second-hand fashion. The study reports that 31% of Gen Z consumers have purchased second-hand items in the past year, while 44% have sold second-hand products. This highlights the importance for luxury brands to engage with this market and target this future customer base.
Motivations for selling second-hand items include decluttering and making space in closets, with 60% of consumers indicating this as their primary reason. While some sellers aim to recover the residual value of their products, 39% plan to use the money to purchase second-hand items, and 20% intend to buy new pieces.
The study emphasizes the immense growth potential of the second-hand market and stresses the need for fashion brands and retailers to adapt and embrace this trend. By understanding and catering to the motivations of second-hand buyers and sellers, brands can tap into a thriving market and win the loyalty of new and existing customers.
Useful links:
1. Boston Consulting Group
2. Vestiaire Collective
