Imagine a world where the past meets the future, where the classic elegance of the Hermès Kelly bag or the timekeeping of the Audemars Piguet watch, after decades with their first owners, still win the hearts of new luxury lovers. This is the reality. Have you ever wondered why these refined, pre-owned luxury items are sometimes even more attractive and cost-effective than their new counterparts? The market of second-hand luxury products, rich in designer clothes, accessories, bags, watches and jewelry, surprises the public with its growth every year. This segment of the market, which celebrates tradition and quality, not only attracts a sophisticated clientele, but is on its way to surpassing the primary luxury market. This dynamic shows that luxury, indeed, has no expiration date, and that time can only increase the value and desirability of these exceptional pieces.
While luxury has always symbolized quality and value that only increases with time, only in recent years have we experienced a significant increase in demand for second-hand luxury goods. This change is not just a trend, but reflects deep changes in consumer attitudes and their increasing orientation towards sustainable and ethical consumption, as well as the principles of the circular economy. Awareness of the importance of protecting the environment and responsible consumption is growing. People are increasingly aware not only of the value and quality of used luxury products, but also of their role in promoting an environmentally sustainable alternative. Buying used luxury goods is becoming an affordable, environmentally friendly and, increasingly, preferred option over buying brand new luxury items.
For luxury brands, this represents not only a challenge, but also a great opportunity. There is a clear need for strategic positioning in this sector, in order to take advantage of the potential that is provided. Luxury brands now have an opportunity to shift some of their focus to the second-hand market, not only as a way to increase revenue, but also as a means to promote sustainability and ethical consumption. In an era where consumers increasingly value transparency, sustainability and ethical production, luxury brands that manage to align their values and practices with these changes will not only gain the respect and loyalty of customers, but also strengthen their position as leaders in innovative and responsible approaches to luxury consumption.
Brands have already found several ways to cash in on the secondary market. Oscar de la Renta has set up a special platform Encore Oscar de la Renta for the sale of used and refurbished items. Gucci has launched Vault, an experimental site within a site that combines vintage Gucci products, one-off collaborations and metaversal projects. Alexander McQueen offers to buy back items in exchange for store credit and then resell the items on Vestiaire Collective, where the brand is listed as a professional seller. But overall, reselling remains relatively unnoticeable within the overall brand experience. That’s partly because opinion remains divided on whether luxury pre-owned appeals to core luxury consumers, cannibalizes sales in the primary market or attracts new aspirants ripe for employment. For now, the fear that buying second-hand luxury items will drive buyers away from buying things first-hand seems unfounded. According to recent research, more than half of the buyers of used luxury goods bought products and brands that they could not afford new. This suggests that used products are expanding the market for premium brands and can serve as a potential gateway for first-time buyers. It is also known that the secondary market can actually stimulate the sale of new luxury products, as consumers often invest the money they recover from the sale of second-hand items in the purchase of new products. In addition to the commercial logic, resale also offers brands the opportunity to improve their sustainability credentials in a market that is increasingly more ecological. Famous bags such as Hermes Kelly or Louis Vuitton x Supreme often change hands on the second-hand market. The used luxury goods market grew by a whopping 65% between 2017 and 2021. In fact, it grew five times faster than new luxury sales over the same period. Indeed, the market for used luxury goods is booming.
Due to the effects of the global financial crisis, the rise of luxury resale has led to the emergence of second-hand luxury re-trade sites such as Vestiaire Collective and TheRealReal. Both offer authentication services. With authentication services and high-quality images, these sites were a far cry from the murky vintage stores that were once the main distributors of second-hand luxury items. And in recent years, both of these companies have established commercial relationships with luxury brands such as Alexander McQueen, Burberry and Stella McCartney.
Popular secondhand clothing apps are also widely available for anyone to shop from. Some of them are Poshmark, Depop, Grailed and Vinted. These apps allow users to create a profile where they can sell their own items. The items they sell must have details of size, condition and brand. They also allow users to decide on the price of the items. Interestingly, buyers and users are also allowed to negotiate the price.
Meanwhile, Gucci – under the Vault label – is venturing into a more experimental zone where they sell a variety of vintage Gucci products, collaborations and metaversal projects. Alexander McQueen offers to buy back items in exchange for store credits and then resell them on Vestiaire Collective. However, we’ll keep in mind that resale items are still covered under the umbrella of inconspicuous sales within the overall brand experience. This is partly because opinion is still divided on whether luxury pre-owned appeals to existing luxury consumers – the primary target market – or whether it attracts new aspiring buyers instead. Overall, there seems to be a fear that the second-hand luxury market could turn buyers away from buying things first-hand. However, this observation appears to be unfounded. Research conducted by the Boston Consulting Group (BCG) showed that 71% of second-hand buyers tend to buy products from brands they cannot afford new. So it actually widens the market for premium brands and opens the door for first-time buyers. Second-hand consumers are particularly interested in pre-loved items from brands such as Hermès, Louis Vuitton, Chanel and Gucci. Research has shown that discounted used goods actually expand the market for luxury goods and provide more affordable entry-level value.
As the market for second-hand luxury goods expands, we look forward to seeing with great interest how its impact on consumer habits, brand strategies, and broader socio-economic trends will play out. This sector not only provides affordable options for luxury lovers, but also promotes sustainability and ethical consumption, which is essential in today’s world.
