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Transforming the Resale Market: Insights from BCG and Vestiaire Collective

A recent collaboration between Boston Consulting Group (BCG) and Vestiaire Collective has unveiled new trends that are reshaping the global resale market for luxury fashion. The report, titled "Resale's Next Chapter - How Fashion and Luxury Brands Can Win in the Secondhand Market," suggests that the secondhand luxury sector is set to soar, expected to reach a staggering $360 billion by 2030. This indicates an impressive annual growth rate of approximately 10%, making it three times faster than the primary market for luxury goods.

The Rise of Secondhand Luxury

Fanny Moizant, co-founder and president of Vestiaire Collective, emphasizes that resale has evolved into a significant facet of consumers’ wardrobes, now making up 28% of participants' closets according to a survey of 7,800 Vestiaire Collective users. This percentage jumps to 30% for clothing and 40% for bags. Moizant asserts, "The resale market is not just a trend; it has become an essential part of the shopping experience, driven by the quest for unique fashion pieces at affordable prices."

Echoing this sentiment, Felix Krueger, the CEO and partner at BCG, notes that many brands are recognizing resale as a pivotal channel to engage new customers, particularly as Generation Z and resale-native consumers push the trends forward, fostering unprecedented growth in this sector.

Why Do Consumers Engage with Resale?

After analyzing the data, BCG and Vestiaire Collective found that affordability remains the top motivator for consumers participating in the secondhand market, cited by nearly 80% of respondents. However, other reasons contributing to this growth include:

• - Variety: About 55% of buyers appreciate the unique and varied selections available in secondhand fashion.
• - Thrill of the Hunt: Nearly 50% enjoy the experience of searching for rare items and interacting with sellers.
• - Sustainability: Around 40% of those surveyed view purchasing secondhand as a more sustainable choice.

When it comes to selling, respondents indicated the primary reasons were to declutter (66%) and to earn extra income (41%), with many sellers planning to reinvest earnings into future secondhand purchases or fund new items in the main retail market.

Generational Insights on Resale

The report highlights the significant role of Generation Z in the growth of the resale market, where these fashion-forward consumers report that secondhand items comprise as much as 32% of their wardrobes, illustrating a growing acceptance of pre-loved luxury items. This number climbs to 45% when looking specifically at handbag ownership. Moreover, 80% of Gen Z respondents recognize resale as an avenue for discovering new brands, which is notably higher than the overall average of 66%.

The United States showcases unique adoption patterns of resale, focusing more heavily on value and transactions. Remarkably, 87% of American respondents cited affordability as a prime motivator for secondhand purchases, significantly higher than their European counterparts. Additionally, Americans are nearly four times more likely to consider resale as a side or full-time occupation.

The Future: Digital Product Passports

Looking ahead, digital product passports (DPPs) are emerging as a crucial tool for enhancing resale transactions by fostering trust and authenticity. Approximately 70% of buyers and 67% of sellers expressed interest in DPPs related to product authentication, while additional tracking and transparency offered by DPPs could significantly enhance the consumer experience. Despite this potential, awareness remains low, with 65% of surveyed individuals unfamiliar with DPPs.

Fanny Moizant envisions a circular future for fashion, in which every item enjoys multiple lives. At Vestiaire Collective, initiatives are underway to facilitate brands in adopting circularity more effectively.

In conclusion, the report from BCG and Vestiaire Collective paints a promising picture for the future of resale in luxury fashion, driven by shifting consumer mindsets towards sustainability, variety, and affordability. As the sector continues to grow and evolve, brands will need to adapt to remain competitive in this rapidly changing landscape.

For additional insights, you can download the full publication here.