Choosing the product that has gone through many past lives at the expense of its new version is becoming more and more popular. In this race, Web 3.0 seems to be gaining some…
As global warming increases, new produce is no longer a given. Thus, fashion resale platforms like Vinted or Vestiaire Collective have never been so popular. Against these pure players, how will luxury brands fare?
Second Hand Race Winners
At a time when Europe is reaching 10% inflation, the second-hand market is becoming more and more interesting. For everyone, it gives the privilege to give new life to what is no longer used, to save on the purchase of essential items, to favor quality over convenience, to revive vintage… These many advantages attract naturally new consumers like the middle class. or, more specifically, generation Z in love with ecology in an increasingly connected world.
At the heart of this market, already estimated at 86 billion euros in Europe and expected to grow by 15% to 20% per year., the fashion sector takes precedence over all others. In fact, following a rise in the popularity of polluting “fast fashion”, producing modest clothes at full speed within it, it is rumored that it will surely see it go second-hand for sure in the coming years.
Growing by 140% between 2019 and 2021second-hand e-commerce platforms are fully responsible for this as “they hold 60% of the online fashion market”. Driven by the global Covid 19 crisis, the Lithuanian platform Vinted, one of the leaders in the second-hand fashion sector, now allows nearly 50 million “vinties” to monetize their clothing. If he has already made 70% of purchases in 2020, Vinted today faces strong competition from many platforms such as Vestiaire Collective, whose business model clearly inspires more responsible fashion. With 550,000 new articles per week, the latter focuses on the luxury sector, whose values and clientele were perhaps not what was expected.
Luxury brands compete
If “fast fashion” that advocates low-cost fashion and overproduction of new clothes did not match the uniqueness, rarity, originality and high prices of the luxury sector, it is equally difficult for brands to relate to the often high prices. affordable second hand. But in a world of climate emergency, they have found much more in common than one might imagine, because according to the Hermès Foundation, “Luxury is what is sustainable, what is repairable, what is ahead.” Strongly echoing second-hand values, where most consumers go there to find a rare product, second-hand luxury is expected to experience annual growth of 10 to 15% over the next ten years..
Thus, some luxury houses try to manage their second-hand market in the image of the Gucci brand, offering a selection of vintage pieces newly refurbished by in-house artisans. using her website GucciVault. Unfortunately, these opportunities on the second-hand market are clearly drowned out by those offered by pure players, multiplying the advertising to the public. Realizing their striking power, some are creating partnerships such as the Kering group, which took 5% of Vestiaire Collective’s capital in 2021.
This market, led by the giants, puts brands at a disadvantage, as they no longer have any power over the resale prices of items that are often 50% cheaper online and have no knowledge of the actors who consume these items “of pre-used”. on the most famous platforms. On the buyer side, even if some are increasingly weaponizing themselves, platforms are adding to the problems of authenticity or payment fraud, which keeps more timid consumers away. After a study, “71% of French say they would buy second-hand luxury goods more often if brands managed their own resale”. If adapting to popular and sustainable circular fashion in the real world is too difficult when you are a luxury brand, tomorrow’s technologies will surely change the game.
The possibilities of new technologies
With the announcement of web 3.0, some luxury retailers are gradually settling into this new digital universe, commonly known as the “metaverse”. We find in particular the Dolce & Gabbana brand which offered in 2021 to buy virtually and/or physically one of the 9 unique pieces of the “Collezione Genezi” collection on the UNXD platform. In 2022, she participates in the first fashion week in the Decentraland metaverse along with many others such as Etro, or Giuseppe Zanotti and launches a pop-up store that allows users to dress their avatars with the most beautiful pieces of the house. According to a study, $25.66 million would have been reported to Dolce & Gabbana following the various projects on this new universe, which constitutes a real potential for the latter in view of its many appearances.
In reality, the presence of luxury brands in Web 3.0 brings them closer to a modern generation that is very consumer of these products called “Non Fungible Tokens” (NFT). In a technical way, they are certified by the blockchain which guarantees their authenticity, rarity and exclusivity – concepts that cannot be overlooked when talking about luxury. To the delight of these users who seem to be similar to those found second hand, these NFTs are very easily exchangeable in this market, because all the information important to the life of the item will be stored on the blockchain. : historical holders, price… Consequently, the act of resale is greatly facilitated as any issue of counterfeiting is ruled out.
In addition to all the virtues of NFTs mentioned above, they have the potential to give luxury brands sovereignty over the second-hand market. Equipped with “smart contract” technology which offers several possibilities such as the generation of “royalties” (rewarding the brand for each resale of an NFT), luxury labels can thus benefit from an annuity on their items. . Moreover, this information is almost negligible when we know that a Gucci bag has sold for more in the metaverse. than its real-life counterpart. More than that, they can even collect data on second-hand players, the future prospects of the first-hand market, which, in the form of an avatar in the metaverse, will offer brands an unprecedented angle of knowledge.
In order to impose themselves on the ever-growing second-hand market, luxury brands must break free from the platforms, approaching Generation Z, their main target. Finally, all this mess after this uncertain world where they have the option of issuing digital goods associated with their items providing not only perfect trust with the consumer but also an added economic value, isn’t that a help for luxury brands? With more than half placed in the testing/launch phase before 2025 in web 3.0, luxury brands are trying, perhaps not knowing that they have so much to gain.