Luxury Product Resale Market: Key Players

Goals

To identify and profile the top players in the luxury product resale market (luxury secondhand market) that offer the seller the opportunity for in-home evaluation of used luxury products for potential resale, provide a quote for purchasing these products, and offer to pick up the products once the quote is agreed upon. Ideally, these companies will focus on products in multiple categories. Once the top players are identified, company details should include the name of the company, market share (or another metric identifying them as a top player), types of products purchased, regions of operation, and a description of the core business model. Information will be used to develop a deep understanding of the luxury secondhand market.

Early Findings

Luxury Secondhand Market

  • According to a June 2020 market analysis by Research and Markets, the global luxury secondhand goods market grew at a 12% CAGR between 2014 and 2019 and is expected to experience strong growth through 2025. KD Market Insights offers a similarly positive estimate of growth, projecting the global market to reach $52.3 billion by the end of 2024, a 14.1% CAGR between 2019 and 2024.
  • Common product categories in the secondary luxury resale market include "antique furniture, artworks, jewelry, footwear, apparel, and fashion accessories, such as bags, watches" and more.
  • Distribution channels for these goods include online marketplaces, consignment shops, auctions, fundraisers, and charity events. According to BCG, the online channel accounted for 25% of luxury resale sales in 2019 and is expected to drive the majority of industry growth.
  • Market drivers include increasing disposable income, growing demand for luxury goods at lower prices among millennials and urban consumers, a diminished stigma associated with used luxury products, strategic partnerships among luxury resale companies with luxury brands, and "limited-time offerings" for used luxury products creating a perception of scarcity. A BCG survey of Vestaire Collective customers found that quality products at an affordable price are the key driver of purchase, with product range and hard-to-find items also contributing to purchase.
  • Industry challenges include ensuring the authenticity of products and minimizing counterfeit luxury items, as well as continuing to engage sellers to continue to support rising demand for luxury resale items.
  • COVID has further impacted the process of engaging sellers of luxury resale items and acquiring luxury products for resale. Luxury reseller Fashionphile moved all their in-person appointments online in the wake of the pandemic, with customers now able to conduct a video chat with a sales associate, receive a quote for their items, and schedule a UPS pickup for these items.

Key Luxury Resale Market Players

  • Key players are identified by Research and Markets as Fashionphile Group, LLC, Garderobe, Inseller, Luxepolis, So Chic Boutique, The Closet, The RealReal, Inc., Timepiece360, Vestiaire Collective, and Yoogi's Closet, Inc.
  • The RealReal and Vestiaire Collective are noted by BCG as offering "consignment, at-home pickup, photos, and storage" as key elements of their business model. They further note The RealReal was the first luxury reseller to go public, raising $350 million since its founding and revenues of $207.4 million in 2018 (+55% over 2017).
  • Luxe Digital, an online publication focused on luxury business and lifestyle stories by "luxury and digital insiders and on-the-ground trend and innovation hunters" noted the most popular luxury resale sites as Fashionphile, Vestiaire Collective, Rebag, Luxury Garage Sale, Collector Square, Bob's Watches, StockX, The RealReal, The Outnet, and The Luxury Closet.
  • Luxeva highlights the top luxury consignment sites to shop and sell vintage, including the RealReal, What Goes Around Comes Around, Vestiaire Collective, thredUP, LePrix, the Luxury Closet, and Confidential Couture.
  • Retail TouchPoints cites The RealReal, Vestiaire Collective, and Rebag as industry leaders. The retail news and trend publication also noted that Nieman Marcus recently acquired a minority share of Fashionphile.
  • The luxury reseller market also includes such companies as Sotheby's Home, 1stDibs, and smaller players including Rewind Vintage and Edit Secondhand.
  • There is no precompiled list of "top" companies by market share as it appears the market is large and fragmented, and many of the companies in this space may be private (with The RealReal highlighted as the first luxury reseller to go public). Looking across industry publications, "top" lists, and market analyses, three companies consistently rose to the top in terms of "top" or "most popular" luxury resellers: The RealReal, Vestiaire Collective, and Fashionphile.

The RealReal

  • With $318 million in reported 2019 revenue, The RealReal is the "#1 largest online marketplace for authenticated, consigned luxury goods."
  • Their category mix is 66% women's items, 25% jewelry and watches, 7% men's items, and 2% home furnishings.
  • The company offers "free white glove pickup" to over 40 cities in the United States, with 4 physical stores (LA, NYC, San Francisco) and 3 Ecommerce centers (California, New Jersey). While consignments are only accepted from US addresses, the company ships purchased products to the United States and over 60 countries outside the US.
  • With an extensive focus on product authenticity, the company has 150+ experts offering services in brand authentication, gemologists, and horologists.
  • The company messaging focuses on the end to end service, brand authenticity, product diversity, and sustainability benefits associated with their business model: "We are revolutionizing luxury resale by providing an end-to-end service that unlocks supply from consignors and creates a trusted, curated marketplace for buyers globally. We aggregate and curate unique, pre-owned luxury supply that is exclusive to The RealReal across multiple categories, including women’s, men’s, kids’, jewelry and watches, and home and art. We have built a vibrant marketplace that we believe expands the overall luxury market, promotes the recirculation of luxury goods and contributes to a more sustainable world."
  • The company business model involves engaging sellers through a multi-step process including selecting products to consign (with specific in-demand designer brands highlighted), setting up a virtual appointment to discuss the items to be sold with a Luxury Manager or category expert, receiving pricing based on expert input, and shipping items directly to The RealReal to be photographed, priced, and sold through their online marketplace. The company offers sellers a commission-based pay structure, with incentives based on quantity sold, and claims the process is easy and fast, with competitive pay.
  • Due to the COVID pandemic, the company pivoted from in-home consultations to virtual consultations in April 2020, conducting 25,000 virtual consultations in Q2 2020.
  • The company is "optimistic about their long-term opportunity" and cites four key elements to their operational strategy moving forward: "...continue to lean into the digital experience, remove friction from the consignment process, invest in advertising and optimize our operations."
  • The RealReal has received numerous positive reviews from the press and buyers/sellers, generating a 4.5 overall rating across 4,815 Trustpilot reviews. Luxe Digital notes that "scrolling through the consigned goods on The RealReal feels like shopping on a premium e-commerce site, but with the thrill of spontaneous discovery — from archival finds to unworn styles on discount."

Summary of Early Findings

  • In this early research, we were able to establish that a significant amount of information surrounding the luxury resale market exists, the market is large and growing, online marketplaces are a key distribution channel for these items, and companies are making a significant effort to engage sellers with a process that is easy, fast, and potentially lucrative. While some companies are more targeted in their product offering (e.g., watches or art), many companies operate across multiple categories.
  • We reviewed numerous resources, including industry publications, recommended and "top" luxury reseller listings, and industry analyses by various market research companies and consultancies (such as BCG), in an effort to identify the top 5 players in the luxury secondhand market. We did not find one predefined list of companies by market share or revenue and were not able to build a list based on revenue as not all companies have publicly-reported revenue; however, we were able to identify companies that were consistently noted as "key players" in the luxury resale market or "top", "recommended", or "best" luxury resale or secondhand companies.
  • The top 3 companies cited across most of the resources and appearing to meet the criteria outlined in the goals (come to the home or offer virtual consultations in the era of the pandemic, assess multiple items, provide price quotes, and either offer to ship products or take to a warehouse) include The RealReal, Vestaire Collective, and Fashionphile. Given the diversity and size of the market, many other companies were also highlighted in early research as potentially relevant in this industry.
  • Please note COVID appears to have had some impact on industry operations, at least in the short-term, as some companies that may have previously offered in-home consultations have now pivoted to virtual consultations.
  • We were able to provide a detailed profile of The RealReal in early research. Given that this company is public, significant information was available about their financial position and operations. We expect that some of the key players may not have this level of financial detail available (especially those that are privately-held and are not required to report revenue).
  • We should note that while selling items associated with estate sales (or cleaning out items prior to death) was highlighted as a potential use case, we did not find estate-focused luxury resellers in early research. There are a number of sites (such as estatesales.net) that operate as intermediaries in which sellers post photographs of items for sale in an online marketplace as a means of advertising a specific estate sale. Still, it appears there are a good number of online luxury resellers who would be actively seeking sellers of a range of items (such as those that would be found at estate sales) with no restrictions on quantity and would therefore meet the need described by this use case.
  • Our recommendations are based on information uncovered in early research.

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