FEATURE
The New Normal – Luxury Resale Ritesh Mohan is a passionate retail professional with over 22 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail and FMCG sector. He is also known as #retailritesh.
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Ritesh Mohan
Retail Expert www.retailritesh.com
ne of the aftermaths of any economic slowdown is the emergence of new brands that offer value for money proposition and it is even applicable to the luxury brands.
Traditionally, Luxury brands remain insulated from any kind of economic and recessionary pressures but the slowdown gives rise to a new kind of luxury retail called “Preloved Luxury” Goods, Second-Hand Luxury or Pre-owned Luxury Retailing. Let’s decode the market for Pre-loved luxury goods.
How big is the market of Pre-loved luxury goods? The global pre-owned luxury goods market accounted for USD 27,353.6 million in 2018 and is estimated to reach a notable in 2024, registering a compound annual growth rate (CAGR) of 12% between 2019 and 2024. (Source- kdmarketinsights.com)
Why this sector is in the limelight or what’s fueling growth into this sector? To answer the above, we need to understand the evolution of the target audience or target customers. Earlier the segmented customers for any luxury brands were affluent connoisseurs, industrialists, and businessmen, who appreciated the finer things in their life.
Trust and authenticity - The core of Pre-loved Luxury During the research for this article, I stumbled upon a concept called Rebag, a platform exclusively for selling and buying preowned designer handbags. The platform offers a resale experience with a seller-first mindset that is all about immediacy and transparency. Rebag purchases the bags outright at fair market value, which are calculated by their highly-trained buying personnel. Sellers simply upload a few pictures to get a free quote and receive a payment within 2-3 days of Rebag evaluating and approving the items. Buyers of pre-owned bags can feel safe knowing that they’re getting authentic designer goods at attractive prices. Creating an Ecosystem for pre-loved luxury
Customer who already owns a luxury product
Buys another luxury good
sells the product
First time Luxury Customer aspirant satisfies its craving The first customer gets confidence in the liquidity offered by luxury goods
With the rise in the disposal incomes and rise in the aspirations of tech-savvy, successful entrepreneurs who are not only striving to make their presence felt but also striving to fulfill their aspirations for luxury goods and brands.
The seller of luxury goods gets more conviction that their luxury goods are liquid and they end up purchasing more luxury goods.
According to the GCC statistical center, Saudi Arabia captured around 57.7% of the disposable income in the GCC and is followed by the United Arab Emirates with a percentage of 28.5.
As per the research done by ThredUp, Millennials and Gen Z are adopting second-hand fashion 2.5 times faster than other age groups.
Luxury fashion becoming more affordable and accessible
Hence pre-owned or pre-loved luxury goods are creating their own channel of customer acquisition by attracting first-time younger consumers.
Pre-owned luxury goods are the ideal choice for high-end fashion as they offer luxury goods at lesser prices. The world of pre-owned luxury goods is segmented by products into five categories: Clothing, footwear, bags, jewelry & watches, and accessories.
Diminishing fear of the fake and the rise of authenticity As technology diminishes the fear of fake luxury or counterfeit luxury goods & with the advent of stringent local laws on counterfeit goods; the segment is witnessing a growth in a number of new startups in the field of pre-owned luxury goods. Firms like Farfetch and our homegrown, The Luxury Closet, are making their mark on the pre-loved luxury goods. It is opening a gateway of opportunity for the market to grow in the upcoming years.
RETAIL PEOPLE . OCT-DEC 2020 .32
Shining star – Pre loved luxury segment
