Are you interested in vintage Chanel wallets that you can buy online? Or used Louis Vuitton items on Instagram? How about a Nike Air Jordan on eBay and a Tiffany necklace that bored the former owner?
Some used buyers are no longer looking for a bargain. They are interested in second-hand luxury goods because vintage is something cool and exclusive. Now the number of such people is growing, especially among young people.
For a long time, high-end brands have been skeptical of the digital world and online sales, let alone the aftermarket. Although Cartier offers second-hand items in some of its boutiques, and fashion houses Valentino and Gucci have recently started selling vintage items, this was just an added bonus for shoppers, not a separate line of business.
But today’s world of luxury extends far beyond luxury boutiques, out of the control of their owners. They do not play a leading role in the secondary market for luxury goods, giving up the initiative to other players.
Luxury goods – and their counterfeits
Consulting firm Bain & Company estimates that the market for used luxury goods, which includes bags, clothing, jewelry and watches, was € 33 billion ($ 37.2 billion) in 2021. This is 65% more than in 2017. During the same period, the market for first-hand luxury goods grew by only 12%.
However, there is one big problem for those who “hunt” for vintage luxury goods – after all, where there is an opportunity to make good money, there is a high probability of encountering unfair or even illegal activities.
Earlier, after returning home from a trip, people talked about replicas of expensive brands that could be purchased by the piece on the beaches of Italy or in the back streets of New York. However, this is nothing compared to today’s huge market for clever knockoffs. Reports of customs officials confiscating entire consignments of counterfeit goods regularly appear in the media around the world.
Authenticity as the main value
For luxury consumers, the confidence that the product they are buying is genuine is more important than the price. That is why many legal second-hand shops began to give their customers guarantees of the authenticity of the purchased items. Some stores even come up with “self-explanatory names” so that everything is clear. For example, one of these second-hand shops is called RealReal.
Founded in 2011, this company sells high quality clothing, jewelry, art and home decor. Initially, the company worked in the format of an online store, but in 2017 RealReal also opened its first retail boutique. Now there are 15 of them and they are all located in the United States.
Legal second-hand shops give their customers guarantees of the authenticity of the luxury items they buy.
In mid-2019, the company listed its shares on the stock exchange and raised $ 300 million, which indicates the interest of investors in this sector. The firm now calls itself “the world’s largest online retailer for authenticated luxury goods” with 24 million users. RealReal’s average order last November was $ 514, a 17% increase over November of the previous year.
Brands discover the second hand market
Leading luxury brands, however, are slowly coming to terms with what the used market is. Recently, Kering, which owns the Gucci brand, invested in Vestiaire Collective platform for aftermarket sales. And in 2018, the Watchfinder online watch resale platform was bought by Richemont, which owns Cartier.
Other companies are catching up on the used luxury trend as well. In the US and UK, the eBay online auction has begun to guarantee the authenticity of certain goods: sellers show expensive items to an independent expert before sending them to the buyer. American users can take advantage of this verification when purchasing items from retailers in the United States, Japan, United Kingdom, Canada, Australia, Germany, South Korea, and Italy.
Currently, expertise is possible in three product categories: watches starting at $ 2,000, designer bags starting at $ 500, and new sneakers starting at $ 100 or used ones starting at $ 150. This practice does not apply to all brands, but among those it covers, there are many popular ones: Chanel, Gucci, Hermes, Saint Laurent, Dior, Prada, Goyard, Rolex and Omega.
Used luxury shoppers are often young, demanding and tech-savvy
The demand for luxury goods is driven by youth
The current growth in the used luxury goods market is driven by two factors: affluent young shoppers on the Internet and an overall strong demand for luxury goods.
According to the latest research published in November by Bain & Company, by 2025, affluent millennials and especially the youth of Gen Z – heavy users of TikTok, Twitter and Instagram – will make up 70% of consumers in the global luxury retail market. Unsurprisingly, many of these digitally accustomed young people do not see the need for offline shopping and are not afraid to make expensive online purchases.
In terms of geography of demand, the leaders are the United States, which now accounts for 31% of the global luxury goods market, and China, which has doubled its share over the past two years – to 21%. Overall, Bain has high hopes for the industry and believes that first-hand luxury goods sales could grow 6-8% annually, reaching € 360-380 billion by 2025. Such figures indicate that soon a lot of luxury goods will appear on the secondary market, which can be bought without leaving home and without fear of their authenticity.
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