Episode 81: What can businesses learn from the luxury resale market?
TOPICS:
- Impact of the secondhand trend on fashion businesses
- Overview of Belinda's insights from her fortnightly newsletter and upcoming content.
- The importance of sustainable design for fashion resale and the circular economy.
- Deep dive into the 2023 luxury resale trends from The RealReal Report.
- Embracing the "Fair Condition" trend in luxury fashion.
- The evolving landscape for fashion brands amidst the rise of resale and rental platforms.
RESOURCES:
Hello and welcome to episode 81 of the Fashion Unearthed Podcast. With this month being secondhand September, which was started by Oxfam urging shoppers to say no to new clothes for 30 days, I thought I would talk about a new report that has come out of the secondhand market that is showing a growing movement of buying secondhand. And it demonstrates that businesses will need to address this and respond to it. But before I get to that, I did wanna mention I send out a fortnightly newsletter with a bunch of resources and focuses that can help businesses and other inspiration I come across. If you're interested in that, you can sign up by heading to belindahumphrey.com. And in the coming weeks and months, I'll also be including some bonus content for the email community. And I'm so excited for this because I'm still planning it out, but behind the scenes, I've really been working on some new stuff, and I think it's gonna bring maybe a little dose of joy and hopefully inspiration to everyone.
The secondhand market, What has been happening in this space? I talk a lot about the importance of designing a product that is actually fit for resale and able to live many lives. And how to do that in the coaching that I do, because extending the lifespan of a piece is really the only way to amortize the initial cost of resources. When the RealReal report came out, I was interested to see their findings. Now, obviously, this is their own research. We don't really get an insight into the behind-the-scenes, so employ some critical thinking here. But they say that 2023 luxury resale report is powered by more than 12 years of data drawing on information from 3 million members. It specifically looks at industry and the real, real marketplace trends. And I wanted to talk about it because if you've been listening for a while, you would know that keeping products in use for longer is a key part of a circular economy.
And their findings highlight two things. That product needs to be built at a certain level of quality at the outset because this product in the report is in the luxury end, and it points to some shifts in consumer thinking. Oh, and also if you didn't know, the RealReal is a luxury resale site, so you might be familiar with it if you're not. It's a site where brands like Gucci and Chanel, brands that are typically seen as more of the higher-end luxury market can be onsold or resold. In this year's edition, they had six key findings, but I thought the two that were particularly interesting for businesses were, well, the first one being that every demographic increased investment shopping despite macroeconomic climate instability. They said across demographics, the customers were making fewer yet more expensive purchases. Their average order values are up for every generation this year, including baby boomers, which are up 14% year on year, and Gen Z up 18% year on year.
And the practice of scoring an item on the RealReal and then eventually selling it back on the same site is up 24% this year. I guess you can see that they're really capturing that customer and earning their trust and the customer's seeing it as an easy way to then get that product back into circulation again and change it up for something else. And it also points to the shift in people spending more for quality, but also a willingness to make investment purchases despite those recession fears.
Now, the second insight I wanted to talk about was that fair condition was becoming a badge of honour. Demand for bags in fair condition was up 130% this year, and the category itself was up 265%. I you don't know, the fair category is the lowest on their condition scale. It starts at pristine, then goes down to excellent, then very good, then good. And then finally, fair.
In response to this Samantha McCandless, the RealReal Chief Merchandising Officer said that within certain fashion circles, the worn look has become a badge of honor. We've seen so much growth and demand in fair condition that we've decided to expand the condition into other categories like ready-to-wear. She goes on to say, that historically, fashion has been about a desire to look a certain way, polished, pristine, and remaining on-trend. But with the recent rise in fair condition, shoppers have embraced imperfection. They're willing to buy older, worn items that are made well and still remain beautiful, and they wear them with pride. They also say that after expanding to include fair condition in clothing, they've already seen strong interest among young shoppers seeking access to brands they might be priced out of otherwise. And millennials have shown the most interest followed by Gen Z.
Within the report. They also touch on other interesting insights, such as across all of the demographics, the most searched-for brand was Gucci. And across America, the Chanel classic flap is the number one most searched-for bag. And they have lots of other insights on jewellery and accessories and even wealth personas that they've identified, including the quiet luxury trend that I did a podcast episode on a while back, Episode 72, I think. But I'll include a link to the report in the show notes if you're interested in digging a little bit further on that.
What does this mean for fashion brands? Well, you could say that because people are starting to spend more at sites like The RealReal, this could mean less money going towards brands that are constantly relying on new products and add to this the growing rental platforms. And you're really going to have to start thinking about how much newness customers are actually going to buy in 2, 3, 5 years' time, especially if people are seeking items with a little bit of patina or evidence of a previous life, which really goes against the aesthetic of new products. Definitely a food for thought and points to businesses needing to diversify and cater to more of a product's lifespan or capture or own more of that product's lifespan.
Which brings us to the end of today's episode. I hope you found today's topic interesting, and if you need help with your product development process and wondering what shifts you need to make, I offer an option to consult with businesses and provide some tailored recommendations based on current research. If you are confused about where to start or what to do next, send me an email at info@belindahumphrey.com. And as always, you'll find the show notes and any links for today's episode on the website, belindahumphrey.com in the podcast section. Thanks so much for listening. See you next time.
Thanks for listening to the Fashion Unearthed podcast. If you want to get in touch head over to belindahumphrey.com or you can find me on Instagram @belindahumphrey
Disclaimer: Whilst every effort is made to ensure that information is accurate at the time of recording, much like the fashion industry itself, this information may change.