Most luxury resellers also buy new: McKinsey
A new report on the luxury resale market by specialist consultancy firm McKinsey has suggested that the segment is on track to achieve an annual growth rate of between 10% and 15% over the course of the next decade.
Based on recent data gathered by the consultancy over a three-month period in Asia, North America and the European Union (EU), McKinsey stated that roughly half of the market is currently given over to pre-owned jewellery and watches, with shoes and handbags comprising just over a third. It estimated that resale is most popular in the EU, followed by the US. China is home to 10% of the market at present.
The firm said that the majority of buying and selling still takes place offline, but dedicated digital platforms (currently with a 25%-30% market share) are projected to grow between 20% and 30% per annum.
Most (41%) of respondents notably told McKinsey that they purchased pre-owned articles for reasons of rarity (ie, they are difficult to source or have been discontinued), closely followed by 40% of individuals who answered that they participated in the resale trade because they deemed it to be “more sustainable”, and 36% contributed that they bought pre-owned for reasons of affordability.
Meanwhile, 90% of participants in the resale trade are also primary market customers of new luxury goods and 75% of these individuals stated that they would actively resell their luxury articles at a later date.
The firm added that this particular data indicated a “circular trade”, whereby luxury goods are resold to free up some wardrobe space (41% of respondents), as a result of a change in taste (36%) or linked to a desire to rid one’s closet of unseasonal or no longer trendy items (29%). A consideration for sustainability followed (28%), as did various financial reasons after that.
Further, whereas customers are “mostly” unaware of official resale relationships between luxury brands and their partners, according to McKinsey’s data, cultural differences largely impact how these partnerships are perceived when consumers are made aware.
For example, Japanese luxury clients were significantly less likely to perceive a brand as desirable or be willing to purchase more of a luxury brand’s products if they discovered that the brand was actively involved in the resale trade itself. This was in marked contrast to buyers located in France and the US who were part of McKinsey’s sample.
