Why brands should embrace the second-hand luxury market

The traditional brick-and-mortar luxury resale industry has produced very few players of any significant size as they focused on a specific product category or geographic footprint. By contrast, online resale platforms have won over consumers by offering far greater brand and product assortment.

In addition, each platform has developed a series of unique services such as curation, authentication and personalized marketing strategies driven by data insights. The increased professionalization of the market has also attracted major venture capital investment.

Pre-owned luxury buyers are usually consumers who don’t have access to the primary luxury market, as 71 percent of the pre-owned buyers surveyed lean towards items and brands they could not afford firsthand.

The second-hand market is thus a powerful way for luxury brands to connect with and anchor their brand in the minds of potential future primary customers. As second-hand luxury customers mature, their purchasing power tends to increase, making them ready to shift to the primary market. Of those surveyed, 62 percent said that they bought a brand they like for the first time second-hand on Vestiaire Collective, and almost all of that 62 per cent said they would consider buying that brand again. Research also shows that 57 percent would either definitely buy or would consider buying the item first-hand – making them solid prospects for the first-hand market.

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. Of those sellers surveyed, 32 per cent said they were primarily selling because they wanted to purchase new firsthand goods. In addition, most pre-owned sellers do not tend to make many second-hand purchases.

For example, of total pre-owned sales on the Vestiaire Collective platform, 70 per cent are generated by sellers who rarely purchase second-hand. Forty-four percent of sellers stated that they purchase more expensive luxury items than they would have bought without a resale market.

Furthermore, customers purchase more frequently, investing around the same amount on individual items but buying again once they free up their budgets. Pre-owned sales clearly boost these sellers’ purchasing power for new items and therefore create an opportunity to increase primary market sales, benefiting luxury players.

The pre-owned market extends the lifetime of luxury products – most products sold o