Selling it again
The future of resale may be going in-house.
While browsing the Ulla Johnson site recently, I noticed something new: a “Preloved” link in the header menu. I was so excited to see a reference to used clothing directly on a favorite designer’s website! Reselling used clothing is massively more sustainable than creating new clothing, as the majority of environmental pollution happens at the production stage. This is just the most recent example I’ve noticed in a trend of brands selling their own used (or vintage) product, so I decided to do a deep dive. Let’s look at why luxury brands are starting to take reselling back in-house, and why your brand may want to consider it in the future as well.
Third-party resellers, online e-comm growth + the opportunity to go in-house
The luxury resale market is growing at a rate four times faster than the overall luxury market (source), with online resellers driving the shift. This was already happening pre-COVID - The RealReal went public in 2019 - but the pandemic sped things up, as it did with e-commerce more generally. Almost immediately, brands started to take notice of this growth, and the potential negative impacts of third parties reselling their product: Chanel filed a lawsuit against The RealReal for damaging their brand reputation by selling counterfeits, for example (source).
Although it’s standard for third-party retail sites to employ teams of authenticators, it seems logical that the people best equipped to authenticate their own products are the brands themselves. It makes sense for Chanel to claim - even if it isn’t true! - that only they know what exactly qualifies one of their handbags as “real”. After all, they have a brand image and legacy to protect. A huge part of the perceived worth of luxury product lies in these type of intangibles. Rolex also broke into the second-hand market in 2022 with a “Certified Pre-Owned Program,” offering used watches with the brand’s insignia and two-year warranties as a way to try and combat decreasing demand for new luxury timepieces (source).
Brands with rich heritage have an opportunity to resell both newer pre-owned pieces as well as vintage or archival products, like Oscar de la Renta is doing with their Encore site. Sellers through Encore can opt to donate their proceeds to one of the brand’s charity partners, creating a huge win/win for the brand’s image. Valentino has also launched a project called Valentino Vintage which includes four physical vintage stores, plus collaborations with other boutiques worldwide.
This goes for brands outside of luxury price-point, as well: take The North Face Renewed, a buy-back program which refurbishes older pieces and sells them again at a steep discount, or recycles them if they aren’t salvageable and preserves the parts for future repairs. Their website breaks out like-new product versus those pieces that have been visibly “reconditioned,” a category that may actually be desirable to customers (like myself!) who like their clothing to have a discernible story.
Generational shifts driving the move towards luxury resale
This shift is especially relevant as Gen Z grows into the ability to make big-ticket purchases of their own. Younger consumers tend to care about sustainability as a core value more than older shoppers, and they likely can’t afford to purchase new luxury product as frequently as they’d like. For better or worse (and I’d argue it’s way, way for worse), younger shoppers also want access to more frequent product turnover because of the pressures of social media. This creates a unique demand situation where it’s more important to have access to luxury product than to own it forever. (See also: the popularity of Rent the Runway.)
This generational vibe shift is going to become increasingly important for brands to consider, especially for luxury brands who may historically have been concerned about cannibalizing their own sales by reselling used product. Gen Z likely doesn’t see reselling this way: they’re more open to it as a concept, and they aren’t in the market to purchase new luxury product at this point, or at least not very often.
This open attitude combined with an interest in sustainability leads to some exciting marketing opportunities: take, for example, the launch of Chloé Vertical, which will allow customers to trace the supply chain of their garment from ‘field to the finished piece’, plus provide digital ownership certificates allowing the purchaser to resell their piece in the future. Chloé is also making their software for this initiative open-source, which may help the idea to become more broadly adopted as a way to promote the circular fashion economy.
Of course, there are both good and evil ways to capitalize on Gen Z’s predilection for sustainability and social media success - take, for example, Kardashian Closet, the Kardashian family’s resale website, which encourages you to “Shop till you Drop!”, with products broken into collections based on the family member who wore them (including a kid’s section, and products such as “new” Balenciaga socks that apparently belonged to Kim).
What to consider when taking control of reselling
Luxury products tend to be valuable in large part because of their perceived brand heritage and exclusivity. Reselling offers a unique opportunity to preserve this exclusivity - that’s part of why Chanel has had so much beef with The RealReal. Brands who take reselling in-house can provide original photography to help preserve their brand image, like Encore by Oscar de la Renta has done so beautifully. They can also maintain total control over their pricing structure, as Rolex is attempting in response to dwindling (new) product demand. Brands who handle their own resales are also able to emphasize their product’s inherent durability, timelessness and collectibility. Who better than the brand themselves to authenticate and celebrate rare vintage pieces or one-off collaborations from their archive?
All of these upsides are of great benefit to established brands whose products have an existing perceived value and recognition. I can see a risk of brand dilution here for newer brands trying to enter the resale space, but I also see a potential sea change going forward that may change this calculus. Whether your brand is ready to go the reselling route or not, it’s going to be important to consider in the years to come.
If your brand is eyeballing an entry into the reselling space, ask yourself: how can you incentivize existing customers to sell their product back? Could you offer store credit, or charitable donations for some of the proceeds? Can you further promote the circular fashion economy by offering repairs or visibly refurbished product à la The North Face? How will you manage authentication - and is it something you can involve your customers in, like Chloé Vertical is attempting? And the biggest consideration of all:
How can your brand build a better sourcing and heritage story so that younger consumers perceive the inherent value and timelessness of your used products?
Want to learn more? Interested in working together? Get in touch with me here.