Consumers are cutting back on their purchases, including at secondhand shops, due to the rapid job losses, impending recession fears, and ongoing high pricing for products and services in 2023.
According to industry data, the market for used products is predicted to nearly double from $43 billion in 2022 to $82 billion in sales by 2026, reflecting the continued high level of consumer demand.
Consumers are searching for a better deal on the used market, just as they do with their weekly groceries and purchases of new goods like clothes and shoes.
Director of merchandising at online luxury retailer The RealReal, Sasha Skoda, stated, “We started noticing it in late summer, early fall of last year” (REAL). Prices for luxury labels like Chanel, Gucci, and Louis Vuitton are falling due to a decline in demand for higher-priced items at resale.
She also said there is an increase in demand for previously owned, more affordable premium brands like Miu Miu and Bottega Veneta.
“Consumers are cutting back on their spending because they are concerned about the economy. As a result, such labels as Hermes, Gucci, and Louis Vuitton, are no longer willing to pay the same selling price as last year, Skoda continued.
The RealReal’s Annual Luxury Consignment Report 2023, issued on Thursday, shows that over the past 90 days, handbag resale prices for Louis Vuitton, Gucci, Hermès, and Chanel all decreased by 20%, 17%, 10%, and 9%, respectively.
According to Skoda, prices have dropped 5% in the last six months, signalling that the resale value of higher-end luxury bags from these brands is starting to level out on average.
According to Rati Sahi Levesque, co-CEO and president of The RealReal, “consumers are making buying selections based on the value going into 2023 because of a projected recession, the climate issue, and worldwide turmoil.”
Resale customers are less fussy about the condition of the products they purchase as they accept lower pricing.
According to the survey, demand has almost doubled for items in “fair condition,” which includes those with noticeable scratches and worn edges from heavy use. The average cost of goods sold by The RealReal in fair condition is 33% less than those resold in excellent or exceptional condition.
According to Skoda, most secondhand clothing buyers, the Millennial and Gen Z generations, are flocking toward investment pieces from high-end luxury brands rather than less expensive contemporary labels like Miu Miu, Bottega Veneta, and Telfar.
But what’s vintage, or perhaps more appropriately, “ancient,” continues to catch the attention of younger customers, according to Skoda.
The most profitable fashion trends for 2023, according to data from searches on The RealReal’s website, include pearl jewellery, ultrafeminine dresses, low-heeled mules, fitted suits, loafers, and brooches. Y2K style is also popular.
“Pearls offer good value. They last a lifetime and are less expensive than diamonds, according to Skoda. Because consumers continue to prefer informal comfort, oversized clothing is popular in suits or dresses.
Clothing and other items from the 1990s and the first decade of the 2000s are in high demand, largely because Gen Z-targeted trends are so heavily marketed that “they are like walking advertising for brands,” according to Skoda.
They view purchasing antique apparel at resale as a chance to be unique, imaginative, and environmentally friendly.
The resale value of certain Italian brands increased significantly from 2021 to today. For example, values for Prada increased by 11%. Fendi, Bottega Veneta, and Gucci all saw 10% price increases. Return rates for two Prada Re-Edition bags, a vintage style now produced with recycled plastics, ranging from 99% to 112%.
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