By the end of 2023, the worldwide secondhand luxury market is predicted to produce $31.1 billion in revenue. The global reselling luxury market is expected to reach $51 billion by 2028, with an 8.6% CAGR.

Around 60% of luxury buyers begin their shopping journey from the secondhand channel. Two out of five pieces are pre-owned items in the closets of Gen-Z whereas over three out of five Gen-Z and Millennials agree that they search for thrift items prior to purchasing new ones.

Apart from other items such as electronics and household appliances, clothing is the first option for consumers to buy second-hand, followed by shoes, accessories, and leather goods. The secondhand apparel market (185%) is estimated to overtake the performance of the fast-fashion market (20%) from 2019 to 2029.

Factors Influencing This Surge

Sustainable Standards

It has been forecasted that the Millennials and Gen Z will have the upper hand in purchasing power than the Boomers by 2030 with over $68 trillion of wealth changed from Boomers to the young generations.

These generations, especially Gen Z, were seen on a mission of treasure thrifting to find products as they are conscious about the environment and climate. With the unknown climate and environmental changes, they are looking for every existing idea to decrease their carbon footprints. Therefore, Gen X, Millennials, and Gen Z have shown more interest in sustainability than the brand name/logo to buy a product from that brand. By purchasing pre-owned goods, the demand for new items will decline and the life of the now-available apparel will expand. There is a high chance for the pre-owned vintage products to hold or be valued even more than the present in the future.

As consumers are demanding sustainable exposure to all the things that they use daily, companies and brands are prioritising sustainability. The category has seen a 292% increase in a business’s priority from 2021 to 2023. The brands are interested in educating and interacting with their customers about conscious consumption with sustainability as the main keyword.

Rather than going for a real-life program, Bottega Veneta has recently developed a training app to be used internally to teach its staff the best practices to establish sustainability. Arc'teryx is in plans to expand its space for repair and resale program, ReBird, by three times the current size to enhance its circular economy by extending the on-site educational and care services.

Accessible Luxury

The secondhand market enables a wider audience to purchase luxury goods at an affordable price. It offers a variety of products at an accessible price and a profitable income for the sellers. Even the consumers who can buy high-end products prefer pre-loved items in order to balance the prices.

Currently, the sales of apparel and footwear segments are increasing and will grow further in the coming years. With that, the price range of the products is getting higher too. This sales and demand growth for clothing and footwear has resulted in many consumers opting for secondhand items.

Another interesting factor is to look at the financial incomes of Gen Z (who are the main and largest part of the customers of the secondhand market). Even though they expect more income, their savings show otherwise. Many Gen Zers are yet to earn their first income while most of their incomes are less than that of other generations. 42,6% of them are spending more than they earn.

In a recent survey by Rocket Mortgage, it was found that 69,1% of Gen Zers are saving money. According to CNBC, Gen Zers are buying luxury goods from the age of 15, 3-5 years prior to that of millennials, with their parents' money. Since they are not using earned money, they are also trying to cut costs by purchasing secondhand luxury items rather than brand-new ones.

The number of people buying pre-owned products is growing at a constant rate in the UK and the USA, whereas France and Germany follow them at a rapid rate.

Digital Growth

According to BCG and Altagamma, 80% of secondhand-buying consumers are using online channels to know more and buy. The digital reselling luxury channels are transferring the market to a seamless one by offering a valid experience with certified pre-owned products and assortments. By using their data research insights, the platforms are enhancing their customer experience by providing premium services like authentication, curation, and personalization. The pre-owned luxury retail platform The RealReal has launched a consignor concierge group to ease the selling process and to support sellers.

The brands are also educating their customers by making them actively participate in the space to attain a long-term relationship. By focusing on customer bonding, the brands, and the reselling platforms are making the re-commerce sites more accessible and convenient for the customers to trust and easily buy products.

However, now, 81% of Gen Z are turning to physical outlets rather than online channels. When every third person is more convenient in online shopping, 28% of the population is interested in the experience gained in real-time retail shops.

As a result, online platforms are making their presence in the real world in a strong way. The vintage wrestling platform WGACA has changed its physical store to a concept store with platform-driven interiors. It has organised exhibitions such as Karl Lagerfeld Retrospective at the time of Met Gala 2023.

Authenticity

As the demand for pre-owned luxury items, there is also a major fear in consumers that the products are authentic. Therefore, many resale platforms are providing them with enough information and certification for the products.

Moreover, many brands are getting their hands in this market to launch their own pre-loved items selling initiatives to touch new and refreshing target customers. They reach fashion lovers who cannot afford the primary products.

Coach’s sub-label Coachtopia has opened a pop-up store in New York that supports circularity with its interactive environment. The brand has unveiled a concept store in London for its (RE)Loved program. The space was utilised to offer services like repair, customisation, leather care, and upcycling.

In 2022, Balenciaga started a Resell Program in partnership with the resale channel Reflaunt in which the customers can resell their Balenciaga for exclusive store credits. They were given access to return the goods in selected stores that will be sent to Reflaunt for testing and authentication. Then, the products were available to buy on the Reflaunt platform and other secondary channels such as Tradesy, and Vestiaire Collective.

Luxury watchmakers like Audemars Piguet and Rolex have introduced their certified pre-loved initiatives in their current store networks. They have also achieved combining the brand narrative and luxury with their interest in the secondhand market.

Valentino has its Vintage store in Seoul with educational attributes and branded publications such as the 65 Years of Valentino Rosso book. The brand initiated the Vintage Project program in October 2021. People are encouraged to hand over its vintage products to selected secondhand stores in return for store credit in cities including Tokyo, Milan, Seoul, London, New York, Paris, and Los Angeles.

Timberland had a Timberloop program in January 2022 that allows its customers to drop or mail in their pre-owned boots in exchange for a 10% discount on their purchases in the future.

Cover Image: A Thrift Store in New York, courtesy The New Yorker.