There was a time when buying second-hand or what is now called pre-loved fashion, was frowned upon. Today, it is the talk of the luxury-burg town. Revered watch and couture brands are realising the allure of pre-loved glamour and adopting this trend to not only meet their sustainability goals but also as a new way of revenue generation.
Coveted watch brand Rolex, seen as a traditionalist luxury label, kicked off a certified pre-owned programme in Europe in December 2022. With it, Rolex offers pre-loved watches, certified by the brand with a two-year international guarantee, valid from date of resale in the Rolex network. In its announcement, the company stated that the watches will benefit from the exacting quality criteria inherent to all its products, adding: “Because they are built to last, Rolex watches often live several lives.”
According to a recent Deloitte report, the pre-owned watch market is likely to grow to CHF 35 billion (Swiss francs) and make up more than half of the primary market by 2030. The growth will be supported by brands launching their very own new pre-owned offerings, the expansion of existing channels and consumers looking for discontinued timepieces. This market will be driven by younger consumers who prefer to shop online and have a penchant for pre-owned luxury due to price sensitivity and sustainability.
A model wears a creation part of the Bottega Veneta Spring/Summer 2009 fashion collection presented in Milan, Italy, Tuesday, Sept. 23, 2008. (AP Photo/Alberto Pellaschiar)
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ALBERTO PELLASCHIAR
The rapidly growing pre-loved luxury market is attracting renowned luxury fashion brands too. Coach has launched a (Re)Loved programme wherein owners can bring in their bags for refurbishing, reimagining and recycling. The luxury bag maker also offers store credit in select stores for those who do not wish to sell or restyle their pre-loved bags. According to the brand, buying a Coach (Re)Loved product can reduce an item’s carbon footprint by 76%, as compared to buying a new one.
Second hand for the win
As per a Bain and Co. report, the second-hand luxury market grew to €33 billion in 2021, up 65% from 2017. Extending the lifetime of luxury products is a powerful way for brands and fashion platforms to show their commitment to sustainability, the report says.
Second-hand luxury retail also gives brands a richer, data-led understanding of young consumers’ behaviour. “There’s both, a commercial and an environment argument to get involved. For retailers the value proposition is to increase customer retention and generate a new source of cash flow,” says Felix Winkler, CCO, Refluant, a re-commerce platform used by Balenciaga and Harvey Nicolas for their resell programmes.
Balenciaga, which is set to launch its first store in India in 2023, has been expanding its re-sell programme across Europe, the US and Singapore. Through this programme, owners can drop off their pre-loved Balenciaga products at select stores or via scheduled pick-ups. Sellers are given the option to accept cash or redeem store credit that is of a higher value than the offered cash.
A bag by Chanel
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Special Arrangement
“The main challenges for a brand to start the re-sell journey is building the tech infrastructure, like the user interface of the customer journey, the implementation of the reverse logistics, etc. We take care of everything from end to end. We provide the technology tools as well as the operational support, including customer support,” explains Felix.
As luxury brands enter the pre-loved fashion market with their direct-to-consumer programmes, how will it affect multi-brand re-commerce aggregators such as The Luxury Closet, Farfetch or Poshmark, who have been self-authenticating and selling pre-loved fashion long before the direct foray of luxury brands into the second hand market? “We are excited that pre-loved fashion is becoming more popular – it’s an indicator that consumers are shifting their perspectives and recognizing the social, environmental, and financial benefits of shopping pre-loved”, says Anuradha Balasubramanian, general manager of India market for Poshmark, a US based re-commerce aggregator.
“When the resale programme is brand specific, it is only going to cater to the customers of that particular brand. For aggregators like us, we offer a treasure hunt. You may just find that bag that you were looking for five years ago but couldn’t get your hands on,‘‘ says Maya Azzi, chief brand officer, The Luxury Closet, a Dubai-based luxury re-commerce company that also caters to the India market. She adds, “For authentication, we do not work directly with the brands, but we have an expert team that is always keeping an eye on the latest launches by various brands and factors that help us to authenticate. We don’t compromise on authenticity as that is our biggest pillar.”
White studded Louboutins
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Special Arrangement
Future proofing
A forecast of the second-hand sector indicates that it will be worth over $60 billion by 2025. Directly or indirectly, luxury brands are rapidly investing in the re-sale market. Last year, Kering, the parent company of Gucci, Bottega Veneta and Balenciaga invested €178 million along with another investor, in pre-loved multi-brand e-tailer, Vestiaire Collective that saw transaction volume grow over 100%, year-on-year.
India, too, is seeing a rush of homegrown online stores selling and buying second-hand luxury fashion. Confidential Couture is one such aggregator, launched in 2014 by Anvita Mehra, to make popular luxury brands like Gucci, YSL and Christian Dior more accessible. “The resale market in India is dynamic and a tough one to be in as compared to international markets. The US and European markets are particularly strong with the presence of well-established e-commerce websites,” she explains. But the market in India is gradually overcoming the stigma of flaunting a second-hand product. Like most online businesses, second-hand luxury aggregators too benefited during the pandemic lockdown as travel opportunities were limited for luxury consumers. “The growth has continued post lockdown. We expanded our reach to tier 2, tier 3 cities and opened an offline store,” Anvita affirms.
Pre-loved fashion by popular Indian designers is also gaining interest on re-commerce stores. “Some of the most listed Indian designers on Poshmark include Ritu Kumar, Sabyasachi, and Manish Malhotra,” informs Anuradha. While an increasing number of international luxury brands are creating a new revenue stream with the re-sale trend, we are yet to see Indian designers make remarkable moves to follow suit.
