Pre-Owned Luxury Goods on Rise
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“Luxury goods are only for the uber-rich population” is myth now. Generation Z and Millennials, also known as Generation Y, are the world’s most powerful consumers of the luxury industry. These millennials with strong brand awareness are emerging as a new generation of luxury consumers. However, purchasing every luxury love is still a quite arduous fantasy, even for the affluent population as spending all their hard-earned money on high-end luxury goods is not something they would love to. It is indisputable that the lower- and middle-class population’s household income in developed regions has been plummeting in recent years. As a result, luxury brands which are dedicated to middle-class populations are witnessing their stocks languishing in warehouses. People these days are opting for pre-loved or pre-owned luxury goods rather than buying new luxury goods. A few benefits allied with purchasing pre-loved luxury goods, including cost, environment, and others have inspired the affluent population to pick second-hand luxury items over new ones.
The pre-owned luxury market initially enjoyed only in developed countries like the United States, Canada, and others, but now the world has seen many pre-owned luxury resellers in recent years and these number is growing sharply. Companies have witnessed the potential of pre-loved luxury goods market and seen its growth in recent years. Pre-owned luxury goods market has grown gloriously in recent years, and this clarifies that there are millions of people present who love luxury goods but can’t afford them. Even in countries like UAE, Saudi Arabia, India, and others, the market for pre-loved luxury goods is thriving outstandingly. Pre-owned luxury start-ups in these countries are doing great and have witnessed a large pool of affluent consumers who want to sell their luxury goods in return for money.
“Product Authenticity and Convince in Selling Process is a Major Concern”
There is around USD 500 Billion worth of luxury goods locked in closets globally and with the rise of reselling luxury goods trend, it is expected that the pre-owned luxury goods market will witness positive years in the future. Reselling luxury goods is a complicated work which requires an extreme level of expertise, transparency between seller & buyer and product Genuity. These pre-owned luxury goods reselling companies are offering every possible service to their luxury goods sellers and buyers in order to make pre-loved goods selling process transparent and reliable. Despite all efforts put in by reselling companies, the pre-owned luxury selling industry has several loopholes, the pre-owned luxury goods market still needs to resolve the problems of counterfeit goods and the acquisition of the merchandise. Product authenticity is a serious concern among pre-owned luxury goods buyers, which should be essential to make a purchase. There are few incidents where product authenticity failure took place and caused a real problem for the company. For instance, Chanel recently sued The RealReal Inc. stating that the Brand was selling fakes on its platform. Over the years, reselling luxury goods have become convenient with seller’s minimum participation requirement, unlike earlier days where the seller had to do all initial works such as taking photographs, pricing decision, and others. Luxury goods resellers are offering different services to minimize the seller’s participation, which further encourages potential sellers to sell their luxury goods. However, using these services can lose a significant amount of money to the sellers, as these reselling companies offer services in return of significant part of the commission and sometimes these commissions can be up to 50-60%.
“E-Commerce is Playing a Growing Role in Pre-Owned Luxury Goods Sales”
Online marketplace for new and used luxury goods could be the future of pre-owned luxury goods market. Many pre-owned luxury goods resellers are already benefitting from flash sales websites and e-commerce. The e-commerce industry has been on an upward growth trajectory and is expected to become the prior choice of consumers in the coming years. E-commerce platforms dedicated to the business of selling pre-owned luxury goods have made such exchanges easier and more numerous. Strong penetration of internet and smartphones have made necessary for pre-owned luxury goods resellers to use e-commerce as a distribution channel. Also, with the improvement in authentication procedure, these online resellers have built a strong customer base and are trusted by their consumer.
Social media platforms have also been a crucial platform for reselling luxury goods. Recently, social media has been used for marketing & selling pre-loved luxury goods, there are also several resellers present, who have a presence on social media platforms. ‘The Lux’, pre-owned and brand-new luxury items reseller, is based on Instagram with 17,000 followers and has developed a reputation via word-of-mouth among the circles of its clients. E-commerce has enormous potential and can offer immense growth opportunity for pre-loved luxury goods market. There is also the customer to customer online platforms such as eBay and others, which have been used for selling & purchasing used luxury goods. Regardless of the strongly growing online pre-owned luxury goods market, the flea market is a real enemy of organized pre-owned luxury goods. There are so many people here with designer brands that they no longer want to wear or use, and flea market is a place where they could sell them on to others for a reasonable price. However, these flea markets are not as trustworthy as they should be, and this further affects the overall pre-owned distribution channel.
Environmental concern is another factor which has encouraged the affluent population to opt for pre-owned luxury goods. Second-hand goods are, of course, inherently sustainable in that they give new life to resources that are already made.
Investments, Funding, Expansion and Start-ups are in Trend
The RealReal, Inc., Vestiaire Collective, EditSecondhand, Didier Ludot, Confidential Couture, James Edition, Collector square, LabelCentric, Tradesy, Crown & Caliber, Yoogis Closet, The Luxury Closet, Fashion Phile, Style Tribute, Couture USA, The Chic selection, LXRandCo, 1661 Inc (GOAT), Grailed, Inc., Flight Club, StockX LLC, Stadium Goods, Trendly, Inc., SnobSwap LLC, Zappos, mytheresa.com GmbH, Farfetch UK Limited, Reebonz, Sou Inc., LuxePolis, Vide Dressing, Hewi London, Bagista, Rewind Vintage, Designer Exchange, High Society, are some of the recognized names in pre-owned luxury goods market, Still the number of resellers across the globe is growing at enormous rates as the world is recognizing the potential of second-hand luxury goods market. Companies such as Rebag, Fashionphile and Luxury closet are being funded by different investors, and these findings are being used in expanding their footprints in domestic and international markets. The requirement of low investment in establishing this business has motivated lots of investors to invest in the industry.
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