In this period of staying at home, we finally have time to get those tasks done on our lists. One of those might be to sort out our wardrobes and the amount of luxury goods we own.
The trend towards minimalism and sustainability make us think about how to consume more responsibly. Therefore, we all experience these days when the urge for a clear-out of pre-loved items overcomes us – but where will they end up? Re-sale platforms for luxury goods are growing and developing into competition for established luxury brands since market trends towards a circular economy are evolving.
There are three main reasons for this change: affordability, digitalization and sustainability.
Growing up as a generation who experiences a world full of opportunities, luxury goods receive more attention and may portray a symbol of reward. However, with the growing willingness to pay for these goods, prices in the luxury fashion sector have increased by 56% over the last decade. Young people start looking for alternatives, since they still want to be able to own these goods but by paying less. One of these opportunities are represented by purchasing their first luxury item via a re-sale platform that promises high quality goods, a customer-centric experience and certified luxury products.
Due to recent events, digitalization accelerates tremendously. Remote working, new restrictions in many countries all over Europe force luxury shops to close their doors to customers. Since re-sale platforms are mainly present online, they are able to take over a higher share of customers than previously. Sitting at home, browsing through the internet, those platforms take the opportunity to convince people to take a look at their dream bag, shoes or more.
Lastly, Gen-Z and millennials emphasize the importance of sustainable consumption in their everyday life to protect the environment. Circular consumption of goods and a movement away from fast-fashion brands, give luxury re-sale websites another driver of growth. Rather than purchasing a newly produced piece of clothing, the opportunity to buy a pre-loved item is favored. The stigma of owning pre-owned items decreases and turns into the opposite – a sign of care and responsible consumption.
However, when one industry gains market share, it has to come from another. The luxury brands are presented with a revolution of the luxury marketplace. Rather than continuing their traditional approach of sale, they need to re-think. Burberry has stressed sustainability in their upcoming campaigns and collaborate with re-sale platform “TheRealReal”.
On the other hand, the trend represents an opportunity to recruit new potential customers in the future. Thus, luxury brands may benefit by taking over those young customers in the future.
By Antonia Kuffler
