Traditionally, luxury clothing and other fashion accessories were a preserve of a small group of affluent customers. Designers and sellers of posh items such as Louis Vuitton shoes relied on scarcity to sell their products at high prices that kept the average shopper off the luxury market. However, the growth of the global luxury resale market has opened up the luxury market.
Clients can resell luxury items they no longer need and get a commission in the process. The RealReal Company is one of the firms that have succeeded in the global luxury resale market, as it creates a platform for customers to consign the posh items they no longer wear.
A Growing Market
The global luxury resale market has been booming. More clients are appreciating the concept of buying and selling the luxury items. Interestingly, buyers are coming from all demographics, including the millennials and the Generation Z. The growing consumer appetite for used luxury fashion products explains why an increasing number of buyers is willing to purchase pre-owned luxury goods. At the same time, the consignors are beginning to appreciate the idea that their luxury possessions are a valuable investment. Market projections show that the luxury resale market would reach $6 billion in 2018. The market is poised to expand, as more companies venture in the market to facilitate the buying and reselling of the luxury goods.
Leveraging the Power of Information to Attract Consignors
The RealReal has been using the power of information to drive sales for its products. The company collects and analyzes real-time market data about what is trending up or down, and what the luxury clients should keep or consign. The firm furnishes the clients with this information. As a result, the consignors know when to sell or withhold their valuables. When the demand for the pre-owned fashion products is high, the RealReal shares the information with the resellers and encourages them to sell their luxury items to earn a commission. By educating the clients, the luxury resale company attracts consignors at the right time as they seek to take advantage of the favorable prices in the market.
Good for the Primary Market
The growth of the global luxury resale market is good for the primary market. When the luxury clients are willing to resell the fashion items such as watches and handbags that they no longer wear, they earn a commission. A vast majority of the clients use their commission to buy luxury goods in the primary market. The cycle continues, as the customers will eventually resell the luxury products from the primary market back to the resale market. For example, a client can buy a Louis Vuitton handbag when it is high in fashion and resell it when she no longer needs it. She can use the commission she earns from the sale to purchase a newer handbag that is trending.
Adjusting Prices as Demand and Supply Fluctuate
Prices in the luxury resale market change according to the demand and supply forces. When a particular product is trending, and more customers want it, the prices go up. When people are not purchasing a certain product, lowering the cost could lead to an increase in sales. The customers get a chance to possess high-end luxury products. The vibrant luxury resale market allows clients to buy fashionable luxury items because they can quickly resell the goods when they no longer need them.
Buying luxury products is now a form of investment. If the owner of a luxury item no longer needs the product, or want to purchase a trendier alternative, they can easily resell their gem and use the money to obtain the new item. Ultimately, as the global luxury resale market continues to grow, so does the primary market.