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Re-Commerce: The Future Of Luxury Fashion?

06/24/2021 | 02:11am EDT

With Gen Z successfully catapulting fashion resale platforms like Depop, StockX and Vinted into the limelight over the last decade, has the time come for the luxury market to enter the world of re-commerce?

In a bid to retain brand exclusivity and prestige, the luxury fashion market has traditionally been largely hesitant to enter the resale market. However, since 2018, the luxury fashion second-hand market has grown by around 27% worldwide1 and is expected to be worth over 60 billion US dollars by 2025.2

So why are luxury fashion brands now turning to re-commerce? Put simply, it's a way to reach younger, environmentally conscious consumers who are keen to fuel the circular economy and extend the lifestyle of products to reduce their carbon footprint. Plus the timeless, long-lasting nature of luxury goods means they are well-placed in the resale market. Alive to this, various luxury fashion brands have recently sought a slice of the resale market.

Examples include eight luxury brands, such as Stella McCartney and Balenciaga, who paired with a prominent online luxury marketplace, TheRealReal. TheRealReal launched its first upcycling programme, "ReCollection" this April. The collection will see verified but damaged designer pieces upcycled into one-off luxury pieces in a zero-waste process and resold via TheRealReal's website.

There is also Vestiaire Collective, a global marketplace for pre-loved luxury fashion, who is partnering with a range of fashion houses, including Alexander McQueen and Mulberry. As part of Vestiaire's "Brand Approved" service, the fashion houses will verify pre-owned pieces for resale on the Brand Approved section of Vestiaire's website.

But it's not all luxury brands and resale partnerships. Nike recently announced its "Nike Refurbished" line. The footwear giant will keep its resale scheme in-house by fixing shoes that are "like-new, gently worn and slightly imperfect" and reselling them in Nike stores at a discount.

Navigating re-commerce risks

Whilst the second-hand market for luxury goods is not new, the channels in which they can be sold are increasing and there is a greater reach for potential customers. These channels are providing opportunities for retailers and brands to better engage in re-commerce. Such direct engagement can be beneficial for reaching new categories of customers and for building on the brands reputation by responding to the public demand for sustainability. It is also prudent for maintaining the status of a brand, as it can help ensure authenticity and minimise the risk of counterfeiting and damage to brand reputation rather than simply relying on trade mark rights, which in some circumstances will have been exhausted and not available to help.

It is worth noting that there is often a debate over whether brands should look to keep re-sale in-house. Building an e-commerce platform for resale is not for the faint-hearted (especially if you do not already have an established in-house e-commerce platform) with many aspects to navigate but it does give a level of reassurance to customers, and there are benefits for the brand as they can re-engage directly when it comes to re-selling.

Generally, however, partnering with developed platforms, such as the "Brand Approved" or "ReCollection" as in the examples above, is an easier and quicker route to engagement which can reach new audiences and help spread the risk but brands do need to accept this will mean there is less scope for control.

As mentioned, re-commerce is not a new idea, and certain luxury brands and product-markets have already been capitalising on this secondary market - as can be seen in relation to luxury watches and jewellery where a robust secondary value can drive a decision to make the original purchase. This should provide comfort for luxury fashion brands that the perceived risks have been navigated in other luxury categories and can provide a blueprint for how best to manage it.


1. https://www.statista.com/statistics/960606/value-of-the-personal-luxury-goods-second-hand-market-worldwide/

2. https://www.cnbc.com/2020/06/23/thredup-resale-market-expected-to-be-valued-at-64-billion-in-5-years.html

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mr Paul Joukador
Reynolds Porter Chamberlain
Tower Bridge House
St Katharine's Way

© Mondaq Ltd, 2021 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com, source Business Briefing

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