Luxury Fashion: Resale Boom in America

Even Luxury Joins the Second-Hand Wave. In the Future, New and Used Will Work Together in the U.S. Market

The Resale Economy in 2024 Will Reach $44 Billion Globally, Surpassing Fast Fashion

The second-hand clothing market grew even more during the pandemic and is now attracting luxury brands, which have realized that this is the perfect time to meet the demand for their clothes among vintage retailers. Not only that. - Many luxury brands are considering creating spaces in boutiques dedicated to used items, placed alongside brand-new collections- says Stephanie Crespin, CEO of Reflaunt (a company providing technology for resale services) - even though this operation is taking much longer than expected. These experiments are still in their infancy. For example, Balenciaga customers can bring used designer items back to the store, but they can't yet purchase clothing or accessories in-store - continues Crespin. - While it's true that first-hand items are in perfect condition, it's also true that every second-hand item is unique. And not knowing how it has been stored or cared for, the second-hand customer faces the uncertainty of the product's lifespan. The challenge for luxury brands will be how to define consumer expectations and offer them a consistent experience with the products they buy. - In an ideal world, you should receive an immediate quote and the brand should credit the money to your account instantly, thus ensuring the resale value. But this involves a client advisor with extensive experience in the market and fashion, as this operation cannot yet be automated. - The British brand Toast is testing some creative solutions. Depending on the condition of the product, used items returned by customers are recycled through reuse programs that either refurbish them for sale or recycle them in collaboration with emerging designers. But initiatives like these take a lot of time and effort, making it difficult to scale this project.

Arrive: The High-Tech Startup Also Tackling Reverse Logistics to Aid Circular Fashion in the U.S.

In the United States, Arrive is making the second-hand sector easier: a technology and reverse logistics company powering circular commerce for the world's most innovative brands and retailers – For Arrive, beyond stores and ecommerce, resale and circular commerce will be the third leg of the stool, - states co-founder and CEO Rachelle Snyder. In the United States, retailers expect that $761 billion worth of products purchased in 2021 will be returned by consumers, according to the National Retail Federation and Appriss Retail. - That enormous flow of goods needs to be managed, concludes Snyder.

Dick's Sporting Goods and Eddie Bauer are the first to test Arrive's return logistics service in the second-hand sector, although Snyder says new major brand partners will be announced soon. The ultimate goal is to reduce waste, and Snyder claims that Arrive can optimize the entire process, primarily to reduce the number of returns. - Our warehouse separates the returned goods between new and not new, - she explains. - Items in good condition are scanned, refurbished, and listed on a dedicated website, or they can be integrated into the same brand's ecommerce, allowing consumers to choose between new or used items directly from the brand's ecommerce. The entire process must be integrated into the existing flow. In an advanced market like America, no one wants to go to three different places for rental, resale, and new purchases.

Marketing Strategies in the U.S. Luxury Second-Hand Market to Boost the Value of Vintage

In February 2021, Vestiaire Collective launched a program called Brand Approved in collaboration with designer Alexander McQueen, co-founder of this pioneering project. The common goal is to find new methods to allow high fashion products to last over time. In practice, a representative of Alexander McQueen contacted a select group of brand customers to appraise the price of their second-hand clothing or accessories. If deemed suitable, a buyback price was assigned to the items. The items were authenticated directly by Alexander McQueen, and the customer would receive a credit note to purchase new items in certain Alexander McQueen boutiques. Vestiaire Collective, after processing the pieces, assigned each product an NFC tag, providing potential new buyers with access to information that could confirm its authenticity. Naturally, items were available for purchase on the Brand Approved initiative page on Vestiaire Collective's app and website. - We hope many fashion houses will follow this example, because to have a large-scale impact, we must act collectively, - said Alexander McQueen CEO, Emmanuel Gintzburger. A month later, Vestiaire Collective closed a €178 million funding round, backed by Kering, the brand owner of Alexander McQueen, and American investment firm Tiger Global Management, with Chairman and CEO François-Henri Pinault. Pinault then stated that - the primary recipients of the platform are Millennials and Gen Z in America. Rather than ignoring this trend, we want to seize this opportunity.

Luxury Brands, Retailers, and Nonprofits Collaborate to Solve the Endemic Counterfeiting Problem

Real-time authentication of products is also already on the agenda. The World Economic Forum is working with Vestiaire Collective, Evrythng (a digital identification company), and Ralph Lauren to develop a digital platform that connects different resale ecommerce, allowing the market price of a product to be determined and authenticated immediately, similar to how a single POS terminal can be connected to multiple bank accounts in a store. Since the WEF is a nonprofit organization, all its results will be open source, enabling other players in the American market to create a commercial version from its pilot project and thus intercept more partnerships. - We are trying to identify which competitive challenges should be addressed in the luxury resale market, but that no one can overcome alone, - explains Ian Cronin, community curator at the 'World Economic Forum'. Cronin also states that - the new system would save major resale players time, money, and transportation emissions, by limiting the number of times each item needs to be authenticated between owners. The only limitation for this gateway system may be the user's need to have some form of digital traceability in the supply chain. And Cronin insisted that - The more partners design their resale platforms to be interoperable, the greater the potential benefits for the entire resale economy in America.