The Resale Momentum Continues
The Resale Momentum Continues
7 MINS READ
Key Takeaways
Resale momentum continues. Brands need to take action to stay relevant and the sooner the better.
Growth of resale will affect overall commerce as customers consider the future resale value as part of the initial purchase decision. This further cements the importance for brands to take control of their resale markets as part of their brand and pricing strategies.
The hot news this week was FARFETCH’s option to acquire YOOX NET-A-PORTER from Brand House, Richemont. Richemont had to exit this business but Farfetch is the real winner. This is a game changer for Farfetch, already a leader in digital luxury, now folding in their largest competitor, Yoox/Net-a-Porter. The additional customer data and influence this gives Farfetch over luxury brands in both their direct-to-consumer and Farfetch Platform Services (FPS) should be concerning for luxury brands. From a resale perspective, FPS already includes some capabilities for brands to accept trade-ins and resell, although these capabilities have been fairly nascent to date. I expect Farfetch will be a resale player to watch in the future.
Reflaunt, the B2B resale player that allows customers to list items in their account profiles on third-party marketplaces, closed an $11M funding round. Closing the fundraising in a difficult economic market illustrates interest in branded resale and maintains Reflaunt’s relevance in the growing branded resale space.
Mercari and The Real Real each published resale reports. The Mercari report rechecked the box that resale is big and growing in this case with parents, however, The Real Real (TRR) report included new data on emergent behavior in resale. Specifically “Since the beginning of the pandemic, we’ve seen two times as many people purchase something on The RealReal, then go back and re-consign it on The RealReal.” While purchasing an item new or used is an existing behavior, trade-in or consignment is a relatively new behavior. TRR data point illustrates this behavior will become more mainstream as resale grows–customers will increasingly consider the resale value as a factor in the decision-making process when purchasing.
This week had several stories about luxury bags as an asset class, including the way Gen Zs are fighting inflation–hmmm. Luxury bags continue to be an asset class just like art, wine, and more recently sneakers. Most Gen Zs can barely afford high-end art or handbags and very few are sitting around figuring out how to hedge inflation or invest for the future via handbags. Instead, this goes back again to customers considering the future resale value in their initial purchase. This is a significant change in purchase drivers, especially as luxury players are raising prices. Brands need a plan for how they manage their resale market.
Finally, Vanessa Friedman, The Wall Street Journal fashion editor, answered a question on the most sustainable options for back to work. She was right on point, “the truth is that there are no simple answers and definitely no perfect ones. Well, other than not buying anything at all.” If we are going to keep shopping we need a better model where shopping doesn’t require commensurate growth in production- resale. All brands have the opportunity to lead the way and profit.
Sources:
‘I’m not worried about the recession: What inflation means for luxury resale
The sale of luxury goods has historically remained stable during economic downturns. However, shoppers have never been faced with the inflation we see today, leading them to find alternative ways to shop for designer brands in resale. Although resale companies create a fantastic solution for consumers, they still have to face the uphill battle of turning a profit.
In 2022, More People Bought Vintage Clothes, ‘Flipped’ Resale Purchases, and Shopped Indie Designers on The RealReal
In its annual Luxury Resale Report, the platform looks at its customer data to identify upcoming trends, purchasing behaviors, growing categories, and popular brands in the resale market. As the resale market has continued to grow, more and more shoppers are turning to reselling (aka. flipping) than ever before. Specifically, Gen Z sees flipping as an investment or source of revenue, making it a business for themselves.
Primark enters resale vintage market with WornWell
Primark is partnering with The Vintage Wholesale Company to create a new resale concession at its flagship Birmingham and Manchester stores- naming it WornWell. The store will allow customers to shop branded and non-branded vintage items from 70s, 80s, and 90s trends.
Resale tech solution Reflaunt secures 11 million US dollars in funding
Reflaunt has secured its Series A Funding of 11 million US dollars to accelerate its circular growth in the fashion industry. The resale tech solution used by Balenciaga and Net-A-Porter, will also be joining forces with Global Blue, offering tax-free shopping and omnichannel tech solution to deepen relationships with luxury brands.
Is Renting My Clothes Really the Most Sustainable Shopping Option?
Venessa Freidman answers the question, “What is the most sustainable way to build a wardrobe?” in her column Ask Veness. Spoiler… there are only trade-offs, other than buying less or buying used (so long as it keeps items in use)
Can Luxury Bags Be Smart Investments?
As top luxury labels raise prices and tighten distribution, designer bags are garnering higher prices at resale, with some styles from coveted brands retaining a significant portion of their retail value long after purchase.
Sustainable Fashion Comes to US Open With Rothy’s x Evian Collection
Ahead of this year’s US Open, Rothy’s Inc. is launching a tennis-inspired collection made from approximately 72,000 Evian water bottles collected at last year’s tournament. The collection will consist of two types of sneakers, a cap, a visor, and three bags. It takes 11 to 19 bottles to make a shoe and up to 56 bottles to make a bag.
Is Renting My Clothes Really the Most Sustainable Shopping Option
There is no best way to be a sustainable shopper or renter of apparel. With so many moving parts in the supply chain and the making of products at the end of the day it comes down to what you value most. The Executive Director of the New Standard Institute said, “anything can qualify as fast fashion if you go through it fast enough, including rentals and secondhand” clothing.”
Can Luxury Bags Be Smart Investments
Disrupted by the pandemic, the luxury handbag supply chain has caused an increase in demand on the resale market for the most coveted labels. These designer pieces are fetching a pretty penny in second-hand markets gaining more value after purchase. Compared to 2019, the average price for designer bags has increased 26%.
Richemont, FarFetch Shares Climb on YNAP Deal
Richemont Strikes a deal with Farfetch! This partnership with the luxury recommerce sight will allow YNAP and Richemont to adopt Farfetch’s technology platform and aid in the development of its Luxury New Retail program.
Gen Z is “Shopping to Sell” Luxury Brands as in Inflation Hack
The trend of shopping to sell rose with inflation and Gen-Z’s are the stars of the show. These young consumers buy used designer goods with the intent of selling them at higher price points later. The RealReal saw a 50 percent jump in the first half of this year in the reselling of items bought by Gen-Z customers.
Mercari’s Second Annual Reuse Report Reveals: American Parents Projected to Spend $12.8 Billion on Secondhand Products for Kids and Babies by 2030
Mercari released its Reuse Report: Family Edition which focuses on the resale environment of American families and parents. With a whopping 59% of secondhand shoppers surveyed say they buy secondhand to save money.
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