How To Start A Luxury Consignment Business – This article is part of a series on the future of luxury retail. Find out more from the series:
The used luxury market is growing and shows no signs of slowing down. Resale offenders – especially luxury goods websites – are positioning themselves as an alternative to fast fashion, capitalizing on the changing trends of affluent consumers in terms of performance, luxury and the sense of ownership.
How To Start A Luxury Consignment Business
In this report, we look at the key factors behind the booming luxury retail sector and consider how luxury brands can extract value from this secondary market. From joint ventures with retailers to furniture retailing, learn what retailing means and how leading retailers can participate in this rapidly changing and growing market. urgent.
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The second-hand luxury market is not new, but it is now in the spotlight as it is becoming one of the fastest growing luxury trends.
Even celebrities openly endorse second-hand luxury items. For example, the Kardashian-Jenners are moving into the retail market with the release of Kardashian Kloset. The online store sells items such as clothes, shoes and bags that were once owned by famous family members.
The Kardashian-Jenners are tapping into the burgeoning luxury market by launching a boutique that lists vintage items from their closets.
Luxury Resale – Buying and selling second hand luxury goods is a growing business fueled by digital platforms such as The RealReal, Vestiaire Collective, Fashionphile, Chrono24, Watchfinder & Co. and more. RealReal’s first successful IPO in June 2019 confirms the growing interest in the resale market and is a clear indication that the second-hand market is one to watch carefully.
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In 2018, the used luxury goods market is estimated at 24 billion dollars, which is about 7 percent of the 365 billion luxury market. But it is even more interesting , the second-hand market is growing four times faster than the primary market and is predicted to double in importance in the next five years. This presents opportunities but also challenges for high-end brands.
34% of true luxury consumers (consumers with an average spend of $44,000) sell their own, while 26% buy originals (BCG x Altagamma)
Sales of second-hand or second-hand accessories – from Burberry to Gucci and Louis Vuitton – are booming on luxury goods websites, which appeal to aspiring affluent youth.
Although luxury retail seems to be gaining more and more acceptance, many luxury brands have not been able to get behind it.
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Luxury brands, which tend to tightly control production and distribution, have difficult relationships with retail businesses. Some luxury brands are entering the second-hand luxury market to attract new affluent customers, increasing their sales and sustainability.
Fashion house Chanel has filed a lawsuit against The RealReal and antiques dealer What Goes Around Comes Around for allegedly defaming the appeal and selling counterfeit goods.
Four major drivers are driving the growth of the luxury retail market: digital technology, affordability, portability, and changing consumer preferences for convenience and experience.
1. The Growing Complexity and Integration of the Luxury Retail Market: Digital Platforms Improve the Second-hand Retail Experience.
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The global luxury retail market has historically been fragmented into small local restaurants and individual operations with limited consumer access. Now the market continues to consolidate. The increased specialization of trade channels has captured affluent consumers around the world, providing greater transparency and trust.
Online luxury retail platforms are revolutionizing the marketplace by providing a seamless end-to-end experience with a wide range of products and proven products. Resale sites are also competing to offer additional premium services such as curation, authentication and a personalized experience based on detailed information.
By focusing on the customer experience – improving the convenience of selling used clothing, improving inventory, providing an attractive online shopping platform and ensuring quality – retail has become easier and more accessible to customers than ever before.
2. Price: Upscale sales offer consumers access to luxury items at affordable prices.
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Luxury marketing brings luxury goods to the masses. The second-hand market offers a unique assortment at low prices for buyers and the opportunity to earn extra income for sellers.
Burberry is expanding the second-hand luxury market in partnership with luxury retailer The RealReal
While second-hand sellers tend to be existing buyers, old buyers tend to be new buyers and may need to be attracted by public or sale capital.
The main advantage of the second-hand market is the opportunity for affluent buyers to buy last season’s collections, classic gems, limited editions, streetwear on sale and drops that were not available the first time.
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The luxury and lack of their unique interactions mean they retain their retail value and are highly collectible. Luxury websites take advantage of this collection culture.
There are two key reasons for the changing purchasing behavior of high-end consumers that explain the rise of luxury goods:
TheRealReal has developed its own consumer-facing calculator that estimates how much water, energy and greenhouse gases (GHGs) you can save by buying used instead of new. It also allows marketers to understand the environmental impact of their actions in real time.
Young affluent consumers tend to value access to luxury more than having it forever. We call it the Experiential Transformation of Luxury.
In this new situation, shopping by hand is considered a responsible way for the new affluent generations to buy something for a while without contributing to the negative effects of the fast fashion shopping environment.
Along with the need to keep up with the latest trends on social media, luxury consumers are turning to vintage goods to satisfy their desire to change clothes frequently.
1. Sales and marketing support Finding new customers: Reselling can be a way to deliver high quality products for discerning customers.
The market, which acts as a “luxury rental system”, helps to increase interest in luxury products among the first luxury buyers.
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Retail websites can serve as an engagement tool for luxury brands to connect with high-end consumers who have yet to reach the mainstream luxury market and build trust among these luxury consumers of the future.
Antique dealers often buy luxury antiques first. By selling their used luxury items, they have the opportunity to reinvest in new luxury items at full price, trade in more expensive items, or buy more frequently.
Many retailers reinvest their profits into new products from their favorite brands. The more consumers are convinced that these luxury items are water, the more they will buy new products,” Charles Horra, co-founder of Rebag.
Read our in-depth article on how lifetime value drives premium first-time purchases for affluent buyers to see this important buying trend in action.
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As millennial and Gen Z consumers become more aware of the social and environmental impact of their purchases, selling luxury goods appears to be a way to build their sustainability profile among generations. media and run a high-level economy.
For example, in June 2018, Burberry sparked outrage on social media by burning more than $37 million worth of unsold inventory to manage supply and protect the brand’s exclusivity. Burberry has noticed and started to support sustainability projects, which we will talk about later in this report.
Apple has been using the retail market for its flagship phones for years now. This encourages consumers to use their old phones and buy new models while they are available.
Access to up-to-date data is another reason why high-end brands can benefit from sales. By partnering with or managing the luxury retail market, luxury brands can benefit from access to more data on purchasing patterns and key trends that will aid in the transformation of old customers to the main market.
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By attracting a community of consumers who are engaged in selling high-end goods, it can offer high-quality products with significant product and brand awareness.
Interestingly, the search and purchase patterns, as well as consumer behavior and preferences, observed on the luxury retail platform can also serve as indicators of the presence of luxury products in the market. core and how important things are. Whether new or pre-owned, Gucci dominates the luxury retail market as the most sought-after luxury brand, as shown in our latest online fashion rankings. . This rise in popularity among young affluent consumers has been witnessed by The RealReal in real time.
Integrity is the foundation of any successful and sustainable retail business. Since the entire reputation of luxury retailers (at least for the biggest players) and consumers is based on trust and transparency, the ability of online retailers to verify luxury items and ensure The value of their property is important.
For luxury companies, luxury marketing can help them manage their products throughout their lifetime. In their seemingly never-ending battle against counterfeiters, luxury brands are turning to technology, including blockchain.
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Upscale sales can also support luxury brands in their efforts to curb counterfeiting by offering affordable, but still mainstream options to potential customers.
As the retail market grows, luxury brands are looking for ways to make money
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