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Unveiling the Future of the Resale Market

In a significant collaboration, the Boston Consulting Group (BCG) and Vestiaire Collective—renowned for its leading position in pre-loved luxury fashion—recently announced the release of their comprehensive report, "Resale's Next Chapter - How Fashion and Luxury Brands Can Win in the Secondhand Market." The report draws findings from a survey conducted among 7,800 users of Vestiaire Collective, shedding light on pivotal trends that are transforming the landscape of secondhand shopping.

Resale Market Growth

The global resale market, particularly for secondhand fashion and luxury items, is projected to expand dramatically, reaching an estimated $360 billion by 2030. This growth rate is impressive, at 10% annually, making it three times faster than the traditional retail market.

Fanny Moizant, co-founder and president of Vestiaire Collective, remarked on the changing dynamics in consumer behavior, stating, "Resale is no longer just an option; it has become a deliberate choice for shoppers. Affordable pre-loved fashion and the excitement of hunting for unique items are now integral to building personal wardrobes."

Felix Krueger, a managing director and partner at BCG, echoed this sentiment, emphasizing that many luxury brands view resale as a critical channel to attract new customers, especially with Gen Z leading the charge in this shift.

Consumer Motivations

According to the report, approximately 80% of consumers cite affordability as their prime reason for choosing secondhand items. Beyond the price appeal, consumers are motivated by several other factors:

• - Variety and Uniqueness: More than 55% of buyers appreciate the vast assortment and unique offerings in the resale market.
• - The Thrill of the Hunt: Nearly 50% of individuals enjoy the interactive experience of engaging with other buyers and sellers during their purchase process.
• - Sustainability: About 40% of respondents favor secondhand shopping for its environmental benefits.

On the selling end, motivations for participants include a desire to declutter (66%) and the potential for generating additional income, with 41% selling for profit, 44% to fund future secondhand purchases, and 18% to acquire new items.

The Role of Gen Z and US Consumers

Gen Z is notably at the forefront of this resale revolution. For this demographic, secondhand items comprise up to 32% of their wardrobes, significantly higher for handbags, with figures reaching 45% globally, 66% in the US, and 39% in Europe. The preference for resale among younger generations is clear, with eight out of ten respondents identifying it as a valuable discovery tool for new brands.

The report highlights a distinctive approach among American consumers, who have a more pragmatic view towards resale buying, leaning towards value and transactions—87% stated affordability as a chief factor, surpassing their European counterparts by a notable margin. Furthermore, Americans are much more inclined to consider resale as a full- or part-time job compared to other regions.

The Future with Digital Product Passports

As the secondhand market evolves, the introduction of Digital Product Passports (DPPs) emerges as a transformative feature that could propel brands forward. DPPs can provide important information regarding authenticity and product specifications, addressing consumer concerns about the safety and provenance of their purchases. Although awareness remains limited—with 65% of respondents unfamiliar with DPPs—this gap presents brands with a prime opportunity to build trust and streamline the shopping experience.

Catharina Martinez-Pardo, another managing director and co-author of the report, highlighted that digital product passports are more than just compliance tools; they are crucial for fostering customer confidence and promoting product longevity.

Embracing Circular Fashion

Moizant concluded by sharing her vision for a circular fashion economy, noting, "Every item should live many lives, and at Vestiaire Collective, we empower brands to adopt this circular model. Our goal is to provide customers an effortless resale experience, transparency throughout the lifecycle of a product, and to help transform wardrobes into valuable assets."

As the resale market continues to grow, these insights from BCG and Vestiaire Collective may serve as a crucial roadmap for brands to navigate their strategies, develop loyalty, and harness the sustainability trend that is fast becoming central to consumer choices.