Where will the fashion resale go in the next two years

To become a Vogue Business Member and receive the Sustainability Edit newsletter, click here.

Imagine walking into a luxury store with a bag you bought three years ago. The salesperson is able to authenticate it on the spot, just as easily as banks authenticate your account when you tap your credit card and receive a store credit that matches market value. You can spend it on new or used items, or you can resell the bag yourself knowing its true value. This is the future of reselling.

The $ 25-30 billion resale economy is booming, supported by a series of acquisitions and IPOs. McKinsey & Company estimates the resale market will experience 10-15% annual growth over the next decade. Offline stores account for the majority of second-hand sales, but specialized digital resale platforms and third-party markets such as The RealReal, Thredup, Ebay and Vinted hold 25-30% market share and are driving much of the growth of the sector. Multi-brand retailers, including Farfetch and Net-a-Porter, are also adapting resale, leveraging their extensive consumer data and brand lists to mimic first-hand sales experiences with second-hand products. And now, there is also a growing interest on the part of brands themselves to own the customer journey and their resale offering internally.

This means a new look market for consumers and great potential for brands. Oscar de la Renta curates archive items for resale through his Encore initiative; Isabel Marant Vintage launched in June 2021; Gucci focused on resale with curated vintage items as part of Gucci Vault in September; and owner Kering acquired a 5% stake in the Vestiaire Collective second-hand luxury market, signaling interest in the industry. (Kering’s other luxury brands such as Balenciaga and Alexander McQueen also tested collaborations with the white-label retail platform Reflaunt and Vestiaire Collective, respectively.)

However, there are major hurdles to tackle if reselling is to maintain the sustainability credentials that made it attractive in the first place. And, even with efforts to increase efficiency, few third-party markets are profitable. Scaling them down will be essential along with streamlining the authentication process to build consumer efficiency and trust. As more and more brands launch their internal offerings – many digital, but also in-store – store reconfigurations, staff training and reverse logistics will be required.

The future of resale will be a diversified offering, depending on the price, positioning and audience of each brand. “There is no one resale model that fits all brands,” says Stephanie Crespin, founder of Reflaunt, who uses a modular system so that brand partners can create a personalized resale offer. Partners Balenciaga and Net-a-Porter both allow customers to have items collected from their homes listed and sold through 27 external markets such as Hardly Ever Worn It and Farfetch by Reflaunt. Fast fashion retailer H&M uses a peer-to-peer online model, where consumers can buy and sell items of any brand.

Integration of new and second-hand products

A mixed model of resale, rental and outlet is how Danish affordable luxury brand Ganni is experimenting with circular fashion shoots. At its Postmodern Store in Copenhagen, shoppers can exchange used goods for in-store credit and colleagues’ cloakroom, as well as try to rent and buy old-season stock. Other stores across Copenhagen offer pickup services. Online, the brand has installed a “smart button”, which allows customers to resell Ganni items through a network on marketplaces, with payment by bank transfer or store credit. The brand just announced an online resale marketplace, powered by Reflaunt, where customers can buy and sell their pre-loved Ganni products, with sellers setting their price. Once sold, sellers can choose between a bank transfer or a purchase credit with an additional 20% value to spend on Ganni.com.

Leave a Comment