15 Oct The Pre-Owned Luxury Market Is Booming And Why You Should Care
Luxury brands that have previously ignored the pre-owned luxury market might want to reconsider based on data by Vestiaire Collective & the Boston Consulting Group. They just recently released results from a survey they took talking with pre-owned luxury goods buyers and sellers.
There is still a taboo within large luxury brands about the pre-owned luxury market, sometimes called the grey market, and I don’t think they can ignore its potential for too much longer. This pre-owned segment has shown growth at an incredible rate of an average 12% year-on-year.
This is all compared to a 3% average for the core luxury market which means some brands will certainly need to start looking at other avenues of revenue growth on top of everything else. That’s a no brainer to me.
There’s no sign of a slow down either. The resale of pre-owned luxury goods is forecasted to increase turnover from $25 billion we saw back in 2018 to $36 billion come 2021. This means that the resale of second-hand luxury goods will represent around 9% of the overall luxury market.
There are already dozens of successful platforms online, as well as several very large resale groups on Facebook and WeChat for pre-owned luxury goods. Luxury brand’s could certainly claim their share of this growing market with a bit of effort while in its infancy, because this segment will continue to grow larger in the next decade.
Pre-Owned Luxury Market Positives
Luxury companies often stuck their noses up at the thought of selling a secondhand item and that’s completely understandable. It definitely could be seen as something that ruins a brand image in the past, but as we see the times are a changing. The unpublished survey they conducted highlights a lot of great reasons why you should dip your toes in.
These bits of information are based on a survey of over 1005 Vestiaire Collective clients in October 2018, as well on the basis of 12,000 respondents to the BCG x Altagamma survey taken in 2019.
- Pre-owned luxury buyers are usually consumers who don’t have access to the primary luxury market, as 71% of the pre-owned buyers surveyed lean towards items and brands they could not afford firsthand.
- Second-hand sellers typically use resale to recoup some of their money back on firsthand purchases, often so they can reinvest in new, full-priced luxury products.
- The pre-owned market clearly extends the lifetime of luxury products. Most products sold on pre-owned luxury platforms are of high quality, with 62% unworn or scarcely worn.
- Extensive and unique product offering, changing consumer preferences, accessible pricing and increasing sophistication is driving rapid growth of the resale market.
- Millenials and Gen Z are disrupting the market and placing greater importance on the social and environmental impact of their purchases than previous generations.
- Most second-hand luxury clients are attracted by the affordable prices of luxury items: 96% of Vestiaire Collective members surveyed said that they buy second-hand luxury pieces partly because they are looking for value for money.
That’s just a few of the highlights the survey found and I think these bits should start setting off alarm bells in the heads of luxury brand marketing departments. I personally would look for a fantastic condition pre-owned luxury item over buying something brand new, especially when it comes to watches.
