Research Outline

Luxury Resale Market Research

Goals

To provide insights on the second-hand luxury goods market (aka luxury cosignment, luxury resale, etc). Specifically the following:
  • Market size (value in dollars, CAGR, and TAM of second-hand luxury goods shoppers globally).
  • Market trends (trends contributing to market growth or contraction).
  • Website insights (number of second-hand luxury goods/luxury consignment websites on the web, number of second-hand/cosignment luxury good/item listing on the web, whether there are any meta-search engines in existence that catalog all existing second-hand/cosignment luxury item sites and listing on the web, which second-hand/luxury cosignment brand on the market is the highest valued?)
  • Consumer demographics (total number of shoppers, average shopper spend per second, income level, education level, age, gender, marital status).
  • Consumer geographic locations (which geographic locations have the largest pool of second-hand luxury goods shoppers by number of transactions and dollars spent, which geographic locations is the second-hand/consignment of luxury goods market growing the fastest, how fast is it growing and by how much in $ spent)
  • Consumer behavior: (number of websites shoppers search when searching for second-hand cosignment items, how many internet searches for second-hand luxury goods are there per hour, how many times will a second-hand luxury good shopper visit a site before making a purchase, how many purchases does a second-hand luxury goods shopper make per year? - Volume of transactions and also $ spent).

Early Findings

Data Availability:

Based on the research conducted during the Early Findings, the following data points were found to be available: market size, growth rate, market trends, consumer demographics (limited) and geography insights, total number of shoppers (estimated in the Early Findings below). The following data points are unavailable: TAM, average shopper spend per second, number of luxury consignment websites and listings, meta-search engines that catalog all existing luxury consignment items and websites, which second-hand/luxury cosignment brand on the market is the highest valued, number of websites shoppers search when searching for second-hand cosignment items, how many internet searches for second-hand luxury goods are there per hour, how many times will a second-hand luxury good shopper visit a site before making a purchase, how many purchases does a second-hand luxury goods shopper make per year. Below we have provided an overview of some data we have found already, much of which addresses many of the questions asked. Further below, we have presented ideas on how to pivot this research moving forward, given the information that has been determined to be publicly unavailable.

Market Size

  • Value: According to McKinsey, the luxury resale market is estimated to be $25-30 billion as of 2020. "The luxury resale market is expected to reach $68.5 billion by 2026."
  • CAGR: According to McKinsey, the luxury resale market has a projected growth rate of 10-15% over the next 10 years.

Market Trends

  • The market is growing in part due to do specialized digital trading platforms and changing consumer behaviors.
  • About 50% of luxury resale consists of jewelry and watches; handbags and shoes represent over 33%, and most of the market is focused on women's fashion.

Website Insights

  • The number of online platforms for luxury resale is growing really fast. Online platforms account for a 25-30% market share, however, most of the business is still being done offline. The market share of these online platforms is expected to grow 20-30% per year.
  • Online platforms represent a 25% share of global secondhand luxury-market sales, according to research published by BCG in 2019.
  • There do not appear to be any existing meta-search engines that catalog all existing second-hand/cosignment luxury item sites and listing on the web. No evidence of such a search engine was found to be publicly available.
  • The key players of the global luxury resale market include The RealReal, Vestiaire Collective, Poshmark, and ThredUp. In 2021, the RealReal generated a revenue of $145 million across 861,000 orders.

Consumer Demographics

  • Demographics: "Women aged 25–34 are the most frequent visitors to online luxury stores."
  • Demographics: According to BCG, "younger luxury consumers are the largest participants in the secondhand market, with 54% of Generation Z and 48% of millennial luxury customers buying preowned goods. In contrast, just 38% of Generation X luxury customers and 35% of Baby Boomer luxury customers buy secondhand."
  • Total Number of Shoppers: Luxury resale consumers will account for more than 33% of the luxury goods market by 2025. They currently account for 20-25% (as 75-80% are strictly new-product buyers). In 2025, there will be around 450 million luxury consumers worldwide. This means the total number of luxury resale consumers will be around 148.5 million (or, 33% of 450 million).

Consumer Geographic Locations

  • According to McKinsey, the EU has the largest share of the luxury resale market. The U.S. has the second largest share, and China comes in third with a 10% share.
  • Among luxury consumers in the U.S., 50% engage in the resale market.

Consumer Behavior

  • "48% of luxury shoppers are very or extremely likely to purchase luxury resale over the next two years (+6 pts since 2019)"
  • There is a lack of existing data surrounding consumer purchase behavior relevant to luxury resale items.

Summary of Early Findings

  • We were able to find data that answers many of the questions posited in the goals section, and have included that data in the Early Findings above.
  • However, much of the requested data has been determined to be unavailable: TAM, average shopper spend per second, number of luxury consignment websites and listings, meta-search engines that catalog all existing luxury consignment items and websites, which second-hand/luxury cosignment brand on the market is the highest valued, number of websites shoppers search when searching for second-hand cosignment items, how many internet searches for second-hand luxury goods are there per hour, how many times will a second-hand luxury good shopper visit a site before making a purchase, how many purchases does a second-hand luxury goods shopper make per year.
  • To proceed, we recommend pivoting the research to help address the data that could not be found. Specifically, we recommend the following: 1) conduct research to provide an estimate of the TAM and average shopper spend per second, 2) build a list of existing luxury cosignment websites and record the total number of listings each website, 3) conduct a competitive landscape of the luxury resale market key players to determine which can be considered the most valuable, 4) provide other insights regarding online consumer shopping behaviors surrounding luxury resale and expand the scope as needed to focus in luxury shoppers in general.

Prepared By
Ashley N.
Consumer Goods & Products Specialist
1383 assignments | 5.0