DROP 17 | THE FUTURE OF SECOND HAND

DROP 17 | THE FUTURE OF SECOND HAND

Second-Hand clothing is nothing new when it comes to (high) society. It doesn’t matter if we talk about the lower economic classes who used to depend on it to be dressed or the royal courts. Court dresses used to be handed down, altered for others and even used as currencies. Only with easier access to off-the-shelf fabrics and clothes did second-hand fashion get a negative image. Back when clothes were worn for long periods of time the stigma of being cheap looking and worn, as well as being outdated or damaged often were true.

However, in recent years, flea markets and musty little shops have given way to online C2C platforms. There are typical C2C platforms like Ebay or Vestiaire, concierge services offered on websites like Rebelle and specialized resellers for a brand or product. A continuously growing number of fast fashion players such as H&M with their own website Sellpy, online retailers like Zalando with an integrated second-hand range, and luxury brands collaborating with established platforms allow the market to continue its growth. In the luxury segment, the big names are also giving the segment more and more credibility. Taking a look at their approaches three are standing out the most. Firstly Isabel Marant, who is offering a buyback service to then re-sell their own designs. Secondly, Gucci who takes the route of collaboration, working with The RealReal. And lastly, there is MiuMiu which bought pieces unrelated to their brand and gave them a makeover.

But this growth wasn’t just driven by big influencers and celebrities who increasingly choose rare archival pieces for their red carpet looks and vintage bags for everyday wear. The first element that made the strong growth possible was the pandemic. Everyone stayed at home and had time to sort out their closets and saw the potential to make some money. In addition, money could be saved and a cheaper version could be found online with a little time investment. In the wake of the pandemic, the next crisis began, this time presenting less of a risk to one's health than to the bank accounts: a recession and cost of living crisis. Here, too, the unused potential in the consumers’ own closets takes effect. Finally, of course, sustainability must also be taken into account - a topic that is becoming increasingly present in consumers’ mindsets. Buying used clothing reduces the buyer’s carbon footprint and waste. In addition, it can inspire consumers to buy less if their own closet is regularly sorted out and they know exactly what is actually there. When it comes to sustainability, many see the second-hand market as an adequate alternative, especially in the fast fashion segment.

An increasing number of voices are being raised online that the quality of fast fashion is declining more and more - which makes perfect sense. Since established companies such as H&M or C&A have to assert themselves against more, faster and cheaper competitors like Shein. With price increases in this segment rarely to be seen and hardly met with customer loyalty, the only way to continue growing the bottom line is to reduce production costs and, inevitably, quality. But here again the second-hand market might lead to fast-fashion companies pushing into the market increasing their quality as re-sold products should last longer and actually be able to be sold a second time around. It's not just about customer loyalty, but also brand image, which mostly is advertised with some form of good and cheap. As long as customers increasingly consider the resale value of an item when purchasing it, the demand for higher-quality items will also rise.

Although the market has had massive growth in recent years, there is still a lot of potential, as it only is accounting for 3-5% of the fashion industry by now (even though it has tripled since 2020). For comparison, a look into the past: between 2016 and 2021 the general second-hand market grew by 109.4%, while the premium products recorded growth of around 65% from 2017 to 2021. In 2023 an average consumer will have 27% of second-hand items in his closet. Looking into the future, by 2029 the second-hand market will have grown to around $80 billion, twice the size of fast fashion. Other, more conservative estimates say it will reach just $44 billion, outperforming the fast fashion market by $1 billion. Therefore, an increase by about 52% between 2023 and 2026 is needed. In order for that to happen, unused potential needs to be activated. As currently, about 30% of non-sellers have items, they could sell but haven't found the time to do so, there still are a lot of products to tap into. If you see yourself here, feel free to contact us and we can take this time-consuming process off your hands.

Let's take a closer look at the two biggest consumers of second-hand items: Gen Z and Millennials. These generations don’t have any prejudices against the market and are happy to spend their disposable income in it. For example, 31% of Gen Z luxury shoppers have shopped pre-loved compared to just 27% of Millennials. On the sell side, Gen Z is even stronger, as 44% are selling items, while only 37% of Millennials do so. As a prediction Generation Alpha, following Gen Z, might be even more willing to participate in the second-hand market.

But – what are the reasons that shoppers will continue to shift their consuming behaviors? Firstly, the product shortage that customers are often confronted with today - be it a limited edition or simply to have missed out on a collection or size. Second, there are more and more reissues of products like the Gucci Jackie. Dupes or similar products are directly based on this. For example, YSL's Mombasa handbag is an adequate alternative to Bottega Veneta's Sardine. Of course, there is as well the opportunity to save some money. Third, there are more and more celebrities shopping in the second-hand market, either because they appreciate the design or, like Kim Kardashian, who is always looking for controversy, even destroying or altering iconic vintage pieces. Fourth, customers will not only find a wider range of products but also unique pieces that no one else can have. Finally, and perhaps of particular interest to millennials, they can now buy the products they didn't have money for or were too young to buy when they hit the market early in the millennium.

Therefore, take a look into our latest drop, where some rare vintage gems are mixed with contemporary brands and items you might have missed out on over the last couple of years.