During the COVID-19 pandemic, all retailers realized that there will be significantly less shopping in recent months. However, one type of goods will always be in high demand, especially in troubling times. Those are luxurious items.
The secondary market for premium and luxury goods is a place where sellers entrust their goods to a store or sell them themselves. This way buyers have a unique opportunity to acquire designer items at a reasonable price.
Before the pandemic, luxury resale was a booming market with expected growth of 12 percent each year and estimates to reach a staggering $36 billion by 2021. For comparison, the primary luxury market was growing 3 percent per year which makes it four times slower in growth. The crisis took a toll on the primary luxury sector, on the other hand, it speeded up the turnaround of stores like Vestiaire Collective and Fashionphile that resell high-end clothing.
There are a few reasons for this trend to rise in popularity. Firstly, people became more value-minded and aware of how investments in branded items can serve them well in the future. Secondly, buying an expensive and high-end item could be an asset, since it could be sold later for far more, especially if it’s a part of limited capsule collections.The circular economy is also driving resales growth since millennials are mindful of sustainability. The nature of luxury goods is to be timeless and durable, which makes them perfect for the resale market.
Big names in the luxury industry were not keen on encouraging resale marketers at first, afraid that their products will stop being exclusive. Some brands were even destroying goods that were not sold, just to keep their name and reputation intact. Now, they need to consider a different approach to the lifecycle of their products that will go far beyond the first sale. Also, luxury brands will now get the opportunity to promote sustainable goals and think about their reputation in the long run since it could open a whole new market.
Digital platforms currently sell 25 % of second-hand luxury items on a global scale, but since most shopping malls and stores are closed, all brands are turning to online stores and resellers, and they are the ones to get the most out of this trend.