Why Luxury Brands Should Take Notice of the Success of the Second-Hand Market
The second-hand market is thriving, and luxury brands should pay attention to this growing trend. A recent study conducted by Vestiaire Collective and the Boston Consulting Group sheds light on the key takeaways and why luxury brands need to take the second-hand market seriously.
First and foremost, the study reveals that the second-hand market is not a passing fad; it is here to stay. In fact, it is projected to grow at a rate of 12% annually, outpacing the overall luxury market’s growth rate of 3%. By 2021, the second-hand market could be worth a staggering $36 billion. This presents a significant opportunity for luxury brands to tap into a lucrative market.
One of the key findings of the study is that sellers in the second-hand market are often buyers of new products as well. It’s not a binary model where second-hand sellers exclusively buy second-hand items. In fact, 32% of the sellers surveyed stated that they primarily sell in order to buy new items. This creates a virtuous economic circle, where buying new luxury products becomes an investment that can be resold in the second-hand market and eventually repurchased as new. This significantly increases the purchasing power of sellers and creates an opportunity to boost sales for luxury brands.
There are several drivers behind the growth of the second-hand market. First, many consumers buy second-hand items from brands they don’t normally have access to. This serves as a way to introduce new buyers to a brand and potentially convert them into first-hand purchasers in the future. Second, sustainable engagement plays a significant role. Millennials and Generation Z represent the majority of second-hand consumers, and purchasing second-hand aligns with their ethical values. Luxury items hold their value in the second-hand market, creating a win-win situation where brands committed to resale and eco-responsibility can enhance their brand image. Lastly, the abundance of options available in the second-hand market is a strong driver of purchases. Consumers appreciate the wide choices of products and brands in this market, allowing them to stand out and create a unique personal style.
While the second-hand market presents a significant opportunity for luxury brands, they must explore strategies that align with their prestige and vision. Some luxury brands choose to partner with third-party platforms, such as Stella McCartney and Burberry with The RealReal. Others are seeking to incorporate the second-hand market into their business plans by developing their own tools to combat counterfeiting, like LVMH’s blockchain tool.
In conclusion, luxury brands should pay close attention to the success of the second-hand market. It is a booming sector that is projected to grow substantially in the coming years. Luxury brands that understand the motivations and expectations of second-hand buyers can tap into this market and benefit from the enhanced brand image and increased sales opportunities.
Useful Links:
1. Vogue Business – Luxury brands look to second-hand clothing
2. BoF – How Luxury Brands Are Cracking the Resale Market
