Luxury shoppers have a completely new attitude, and it's killing traditional retail
As evidence that high-end retail has lost its footing continues to mount — from companies pivoting out of luxury to a crisis in the Swiss watch market — there is at least one bright spot to be found: pre-owned.
No longer looked at with disdain, the pre-owned market is growing in both dollars and prevalence.
"There's been a major shift here over the last four to five years where people really understand value in a different way," Alexis Clarbour, director of pioneer luxury accessory consignment website Portero.com, told Business Insider.
Clarbour says that her customers are now seeing beyond the original purchase and considering how the value of the item will hold up if they decide to resell it. These customers aren't seeking thrift-store bargains, either. They're true luxury seekers — the average sale price on Portero, for example is $2,200, and its most popular brand is Hermès.
Watches are also seeing a major shift to vintage and pre-owned.
"For the same reason a consumer chooses to buy a certified pre-owned car, they also desire to purchase a certified pre-owned watch since it's a smarter, more financially beneficial way of buying luxury," said Hamilton Powell, founder of luxury vintage and pre-owned watch consignment site Crown & Caliber.
The information available on the internet is perhaps the biggest factor for resale websites. As it becomes easier for customers to educate themselves about items like handbags, watches, and sneakers, they seek a greater value for their dollar in the luxury space. And they'd rather not be bothered by pushy salespeople in boutiques, as these savvy customers already know what they want and what it's worth.
"Today's consumers are smarter than ever due to the vast amount of information at their fingertips provided through the Internet," Powell said.
Powell says education is "the reason for the rise in pre-owned," but adds that the "result is an iconic, classic suave look" akin to the days of Cary Grant and Don Draper.
This education means it's easier than ever for customers to become enthusiasts.
Another category — sneakers — has also seen more attention. Venture capital firm Forerunner Ventures, which invested in Birchbox, Bonobos, and Dollar Shave Club, recently made an investment in sneaker consignment store Stadium Goods. It was the firm's first investment in a consignment company. Sneakers are not considered a luxury category traditionally, but they can have luxury-level prices at resale to fanatical consumers.
"The whole ecosystem is going through a lot of change," Kirsten Green, Forerunner's founder, told Business Insider. "A lot of sneaker-buying was happening in malls. And people's shopping patterns are changing away from malls."
It's also removing the barrier that traditionally separates customers from shopping pre-owned luxury: fear of fakes. Websites like Portero and Crown & Caliber both offer 100% authenticity guarantees, and they sell products in as good condition as possible while preserving that.
"Given the growth of the online jewelry/watch segment, we believe consumers are getting more comfortable with buying online rather than from a brick-and-mortar establishment," Powell said, noting that sales for 2016 increased by 70% when compared year over year.
Clarbour said she's seeing a similar phenomenon, adding that it's her website's reputation that makes customers feel safe.
"If we were known to sell inauthentic goods, we would've been put out of business by now," Clarbour said of Portero, which was founded in 2004.
Choice is another benefit of pre-owned luxury items, Clarbour says. If you walk into a boutique, they will only have the brand's latest offerings, but online there's the entire history of the company to choose from, including hard-to-find items like the Hermès Birkin bag.
"It's not like when you go into a boutique and you have a salesperson bossing you around, putting pressure on you," Clarbour said.
Most of the luxury items sold on eBay are new, but the auction site is also implicated in this attitude shift. It's releasing an expanded authentication program called eBay Authenticate later this year, in an effort to court these luxury pre-owned customers.
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