The market for second-hand luxury goods is estimated to be worth some $24 billion and is growing at four times the rate of the primary luxury market. Where once upon a time second-hand goods may have been considered substandard or even frowned upon, today they are not only seen as acceptable but mainstream. With second-hand goods often referred to as ‘vintage’ or ‘pre-loved’ their appeal has grown exponentially in the last two decades as consumers seek items that are not only better value, but unique and highly sought-after.
Indeed, it’s not uncommon for entire business models to be based upon selling pre-owned luxury goods. In the UAE, several such business models exist. And since the UAE is one of the foremost consumers of luxury goods globally, there’s no shortage of supply in designer pieces looking for new homes. Many of those trading in pre-owned goods, however, have a global customer base, a trend not ignored by larger, global fashion retailers, such as Nordstrom and Macy’s, who have also entered the luxury resale market.
Used-luxury goods, which come at a fraction of their original price, make luxury instantly more accessible. A recent report published by online luxury retailer Farfetch, which surveyed 3,000 consumers across the US, UK, and China, demonstrated that cost-savings are the number one reason for purchasing pre-owned goods. But it’s not pricing alone that’s driving the market. Sustainability concerns are increasingly driving consumer purchases.
The Fashion Industry’s Environmental Footprint
With the fashion industry accounting for 10% of global carbon emissions, there is considerable concern over the sector’s highly damaging environmental impact. Water consumption is a significant issue, with a year’s worth of drinking water required to produce one kilogram of cotton (the amount needed to make a single pair of jeans). Fast fashion brands are the primary culprit, producing multiple lines per season, with new collections appearing as often as every week.
Waste is also a considerable concern, with 85% of our old clothes ending up in landfills. As consumers become more environmentally conscious, they are driving the industry to do the same. It has become increasingly common for major retailers to have specific lines that adopt more sustainable practices. H&M’s sustainable and organic range Conscious, Levis Water<Less jeans and Topshop’s Considered line are just a few examples.
In support of its pre-owned luxury goods section, Farfetch recently launched a sustainability calculator. The tool enables consumers to check how their second-hand purchases have reduced their environmental impact in comparison to buying new goods. But luxury goods have always stood out in this regard. Made to stand the test of time, a single purchase will last a lifetime, even generations, in terms of both quality and style.
With Generation Z growing ever-more environmentally conscious, 62% preferring to shop from sustainable brands, we can only expect the trend towards pre-owned luxury to snowball. With increasing smartphone and internet penetration rates, we can also expect more consumers to sell their pre-owned goods on various social media platforms, including Facebook’s Marketplace.
While brands may have previously resisted the trend, believing it to be damaging to their sales, many are now embracing it as they become increasingly responsive to environmental concerns. Many now offer to exchange pre-owned goods for store vouchers. Examples include Stella McCartney’s partnership with TheRealReal, and Retold, which provides a similar service in Dubai. By supporting the circular economy, fashion brands further reduce industry waste.
Embracing the Circular Economy
As the industry becomes smarter on all fronts, we can expect greater efficiency and less waste across all sectors. Technology has enabled many of these changes, combined with growing environmental awareness, and as governments around the world work to decouple economic growth from environmental degradation, the fashion industry’s embrace of the circular economy is a step in the right direction.
The market in pre-owned and repurposed luxury goods offers one such avenue that we hope to see more of in the future.