(Bloomberg) Covid-19 has made most shoppers cost-conscious this holiday season, but those with cash to burn are still finding ways to splurge. As retail sales in general suffer, luxury fashion—the previously owned kind—is flying off the shelves.
Peer-to-peer online luxury consignment shop Tradesy reported a jump in sales over the past few weeks. Customers are stocking up on used high-end shoes, jewelry and handbags. The Santa Monica, California-based company usually doesn’t see a spike in purchases this time of year, said Tradesy Chief Executive Officer Tracy DiNunzio. But 2020 is different.
Sales of rings this month soared 92% compared with last year, DiNunzio said, Cartier being a customer favorite. Sales of Saint Laurent boots, meanwhile, climbed 36%. She attributes her increased sales to a sense among consumers of doing their part—leaning toward sustainability in a time of crisis.
The total secondhand market includes online resale and traditional thrift stores such as Goodwill and Salvation Army, which are primarily (but not exclusively) offline. Collectively, the market is poised to reach $80 billion by 2029, according to online reseller ThredUp.
When the pandemic shuttered brick-and-mortar stores, consumers found more options and better deals on resale marketplaces. Even as stores slowly reopened over the summer, DiNunzio said new customers continued to flock to her site and demand for secondhand luxury remained strong.
“The adoption of resale by those traditional luxury retail customers has really accelerated,” she said. “They continue to be extremely active, equal to or more than our typical buyer profile.”
Founded in 2009, Tradesy launched at the height of the financial crisis, when shoppers who initially snubbed pre-owned fashion began to see they could save money without sacrificing style. “A new attitude emerged, and it was really the birth of the resale category,” DiNunzio said.
This time around, wealthy consumers with disposable income are joining in. The economic uncertainty of the pandemic and the deep recession that came with it has heightened their focus on value, too.
“It’s a shift toward high quality, designer pieces that will hold its value over time,” DiNunzio said. “Customers have gotten savvy and are thinking about luxury purchases as an investment.”
Fueled by enduring brand recognition, meticulous craftsmanship and the hype of a limited-edition drop, designer items can be timeless status symbols with resale values shoppers can bank on.
Consignors of high-end sneakers and handbags have reaped big returns. The perennially sold-out Louis Vuitton Pochette purse goes for an average of $1,300 on Tradesy, more than double its retail price tag. The resale value of Kanye West’s Yeezy Boost 350 surged 157% on online luxury consignment store RealReal Inc.
“With everything being more casual, luxury pieces not only make shoppers feel more put together; it’s a way to treat yourself and know it’s something you can make money on down the line,” said Sasha Skoda, head of women’s at RealReal.
Apart from shoppers looking for a luxury item, younger secondhand hunters are doubling down on the resale market.
According to ThredUp, Generation Z shoppers are bargain hunting more than any other age group. “They see no stigma in used clothing, and care about shopping sustainably,” said Karen Clark, ThredUp’s vice president of marketing communications. “It’s a way to signal their values.”
While a critique of fast-fashion existed prior to the pandemic, Covid-19 accelerated adoption of secondhand shopping—bringing the role of circular business models to the forefront of consumers’ consciousness.
At RealReal, about one-third of customers said they shop on the platform as a replacement for fast-fashion, Skoda said.
“Fashion is one of the least sustainable industries on the planet,” said Michael Stanley-Jones, a program management officer with the United Nations Environment Program. “We’ve all become our own waste managers, hoarding fashion waste in our closets.”
Efforts to increase the life cycle of clothing through resale—and ultimately mitigate its environmental impact—is noble, Jones said, but reaching sustainability goals will take more than just thrifting.
“Certainly, consumer behavior will help, but that’s not going to tip the scale,” he explained. “Companies, manufacturers, consumers, and investors all need to be in sync.”