In response to evolving global conditions – including supply chain issues, inflation and the climate crisis – consumers are increasingly turning to resale luxury items, reports The Real Real in its 2022 Luxury Resale Report.
Based on the data on 28 million shoppers for more than 26 million items sold to date, the report concludes that in a world of uncertainty, the secondhand market is appealing to consumers for emotional, economical and environmental reasons. This happened in a year when 27% more people are familiar with resale, with TRR’s member base growing by 23% and sales increasing 44%.
Resale attracts shoppers for its feel-good appeal – both for the thrill of the hunt and the sustainability. Gen Z and Millenials in particular emerged as massively growing markets. As a result, resale shopping is making shoppers savvier as brands such as Dior and Balenciaga increase in popularity.
Here’s a look at some of the top trends unearthed by the annual study.
TRR found that 43% of their shoppers consider sustainability a factor when purchasing an item. The call for recirculating retail items in the name of sustainability has increased the appreciation for luxury items, said James Rogers, TRR’s Director of Sustainability. This has led to more reselling, a welcome development if the industry is to reach benchmarks set by the Paris Climate Accord. To be exact, McKinsey specified that recirculating 1 in 5 garments by 2030 would be needed.
This circularity is already seen in TRR’s data, with the number of items purchased then resold on TRR doubling since the pandemic. Among watches, Rolex, Cartier and Hermès were resold the most. Chanel shoes, Gucci bags and Louis Vuitton bags topped the most resold accessories. The amount of resold goods tripled since 2018, with Gen Z being the fastest and Gen X reselling the most.
Additionally, TRR’s Sustainability Calculator reports that items sold on TRR amounted to 3.1 billion liters of water and 59+,374 metric tons of carbon saved. That’s the equivalent of 13.2 billion glasses of water and what 9.9 million trees would absorb in the air for the clothing, fine jewelry, watches, and bags resold on TRR.
The Sustainability Calculator, launched in 2018, allows shoppers to directly see the environmental impact of their purchases. Partnering with an environmental consultancy, TRR looked at the average water and carbon impact of new products in the market. Next, they applied that data across their own shopping categories. Finally, the calculator applies the Worldwide Responsible Accredited Production (WRAP) displacement rate of 33%.
In addition to sustainability, the thrill of the search is another aspect of resale shopping that TRR shoppers say they enjoy. With more than 20,000 merchandise items added daily, TRR shoppers endlessly scrolled in 2022 to escape headlines and social media.
Front and center of this trend is TRR’s Obsessions feature, where users can bookmark their finds and shop editors’ picks. Use of Obsessions grew 40%, including a 26% growth among shoppers.
For brands as a whole, incorporating escapism into the in-person and online shopping experience has emerged as a valid strategy. In fact, 43% of shoppers are more willing to spend on meaningful in-store experiences.
Gamification – a market valued at $30.7 billion by 2026 – is one of many ways retailers are elevating the shopping experience. Roblox in particular has capitalized on this development, partnering with Guccci and others for experiences that meld the physical with the virtual. The Metaverse offers its own breadth of possibilities, such as H&M’s collection inspired by the augmented reality platform.
Emotions & Luxury Goods
Traditionally, a prominent emotional factor behind purchasing luxury goods was the desire for status and social acceptance. Luxury goods often serve as a status symbol, and consumers may be motivated to purchase these items in order to gain social recognition and acceptance from their peers.
Another emotional factor has been the feeling of exclusivity and rarity. Many consumers enjoy the feeling of owning something that is unique and not easily accessible to others. This can drive demand for limited edition or hard-to-find luxury items.
Environmental factors that influence consumer behavior for resale luxury goods include the rise of sustainable and eco-conscious consumerism. As more consumers become aware of the negative impact of fast fashion on the environment, they may turn to purchasing second hand luxury items as a more sustainable and environmentally-friendly alternative.
Additionally, the rise of online marketplaces and social media platforms have made it easier for consumers to access and purchase second hand luxury goods. This increased accessibility and convenience may also be contributing to the trend of resale luxury goods.
Investing & Collecting
In recent years, there has been a significant increase in the consumer behavior of purchasing resale luxury items for collecting and investing purposes. According to TRR, collectibles sold increased 78% in the first half of 2022, with demand for vintage clothing increasing by 439%.
Aside from sustainability, another factor driving the trend is the increasing availability and accessibility of resale luxury items. With the rise of online platforms like eBay, TRR, and Poshmark, consumers can easily browse and purchase pre-owned luxury items from the comfort of their own homes. These platforms also provide the added benefit of authentication services, which gives consumers confidence in the authenticity and quality of the items they are purchasing.
In addition, the increasing value of certain luxury brands and their ability to hold or increase in value over time has attracted investors to the resale market. Brands like Chanel, Louis Vuitton, and Hermes have consistently been popular choices for collectors and investors due to their high demand and exclusivity.
According to McKinsey & Company, the 2022 purchasing behavior of luxury goods by generations is expected to be influenced by a number of factors, including the changing demographics of luxury consumers.
For Baby Boomers, sustainability is becoming a key factor in their purchasing decisions, with many seeking out brands that are transparent about their environmental and social impact. This is reflected in the growing popularity of “green luxury” products, such as eco-friendly fashion and accessories made from sustainable materials.
For Gen X, the rise of digital channels is expected to continue to shape their purchasing behavior, with many opting for the convenience and flexibility of online shopping. This is reflected in the growing popularity of luxury e-commerce platforms, such as Farfetch and Net-a-Porter.
For Millennials and Gen Z, the trend towards sustainability is also expected to continue, with many seeking out brands that align with their values and prioritize environmental and social responsibility. In addition, these younger generations are more likely to be influenced by social media and peer recommendations, with many seeking out exclusive, limited-edition products that offer a sense of exclusivity and rarity.
The resale market for luxury goods has grown significantly in recent years, driven by both emotional and environmental factors. It’s a trend that is fueled by a number of online marketplaces that allow individuals to buy and sell second hand luxury goods, offering a more diverse selection of items that are more accessible to a wider range of consumers.