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17 September 2018

Why Secondary Markets Are So Popular With Fashion Consumers

In recent years there has been a cultural shift in the way consumers and brands view secondary markets. Before the massive reach of the internet was the norm, resale markets were more widely referred to as “secondhand” and viewed with the stigma that it was only for those who couldn’t afford to buy new, let alone luxury. This view wasn’t necessarily a misconception: at the time, resale was dominated by local establishments serving consumers who looked for lower prices or items that could be reused for sustainability reasons.

The massive growth of technology in our everyday lives spurred a transformation in the way we conduct our personal and professional business, including the way consumers shop and the way advertisers reach their audience. Initially, it was resale sites like eBay that harnessed the promise of new digital search capabilities and made consumer-to-consumer sales accessible and appealing for new audiences, and especially for collectors. Eventually the eco-fashion world tuned in to the potential and embraced digital resale as the next generation of the movement to reuse and recycle wherever possible.

For years recycled clothing and eco-fashion was equated to a ragamuffin aesthetic or anything made from hemp. The promotion of vintage luxury as part of the sustainable fashion movement gave rise to new set of green fashionistas and a credibility to their style efforts. For younger generations – the mindful Millennials and Gen Z – environmental and social consciousness is important, which is what powers the secondary market. Buy, sell, repeat. This is the way to eliminate waste in the fashion industry and to reduce fashion’s environmental impact.

The luxury market wasn’t as quick to adopt the resale trend, but there was too much evidence of its possibilities to ignore for long. Manish Chandra, CEO of Poshmark, saw the fortuity to mobilize––literally––and launched the Poshmark iPhone app in 2011. He offered the anecdote,  “I saw that my wife had shopping bags full of stuff that she didn’t wear, that were never even used. And when you look at fashion as an industry, it’s so huge — we spend in the U.S. $250 billion on fashion, 80 percent of that on women’s fashion. So women are putting roughly a trillion dollars of clothes into their closets every three years. But it doesn’t all get worn — a third of it gets worn regularly, a third of it gets worn once or twice, and a third of it is worn not at all.”

The availability of items that can be found on buy-sell-trade platforms––especially those that are new or like new––are a treasure trove for fashion lovers around the world. It has become a mainstay in building a personal, curated wardrobe to add rare one-offs, vintage, and elusive pieces to their closets. Treasure hunting on the secondary market has proven to be a successful way to score unique and hard-to-get items. Peer-to-peer selling and gently used luxury resale have exceeded many expectations luxury brands once held about them. The consumers are leading this movement, and their interest in buying authentic items is spurring the success of new platforms like TheRealReal, Vestiaire Collective and StockX, where collections are curated by staff buyers and vetted by in-house authentication experts before being placed on sale.

It’s evident there are pros and cons to each market, as peer-to-peer selling offers more choices and more negotiation, all while risking the purchase of a fake. Curated platforms guarantee authenticity… but at a higher price.

Shopping for gems found in secondary markets comes with the risks that consumers are less and less willing to take. It’s evident that with access to secondary markets, the cost of buying fashion changes. A piece that holds its value and can be resold becomes less expensive in the long run, and can even in some cases be viewed as an investment.

The question now is how to ensure that consumers get the best of secondary markets, while avoiding the increased risk of buying a counterfeit by mistake. Curated platforms offer a degree of security, but real change will happen with a guarantee of authenticity travels with the product itself, regardless of where it is sold. Consumers are delighted to buy luxury fashion in secondary markets if the pieces they get are authentic. The items they buy will only hold their resale value and brand value if they're authentic.  It stands to reason that the brands poised to benefit the most from secondary resale markets are the ones that respond to consumer demands and ensure buyers can be unequivocally confident that they’ve made a worthwhile purchase.

Certilogo recently recorded an exclusive webinar on secondary markets - view it on-demand below!

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