In 2022, luxury buys don’t have to be brand new. Over half of UK millionaires have bought or intend to buy pre-owned fashion pieces.
In total, 23% have bought pre-owned luxury fashion items before, while a further 28% haven’t yet but are considering it for the future.
This data, from Savanta’s most recent quarterly MillionaireVue results, captures a growing trend of HNWIs’ openness to the resale or second-hand luxury market.
Abstaining from the resale market may mean missing out on highly lucrative opportunities.
Pre-owned fashion in particular is disrupting the status quo. A $96bn global market last year, it’s set to more than double by 2025, reaching $196bn (£177bn).
What’s behind the resale revolution?
Some will point to a sign of the times – from a global pandemic to a looming recession – but reselling doesn’t necessarily mean lower sale prices for some high-end items. Rolex shortages have led to record UK auction prices, for example.
Luxury e-commerce sites are a key driver. For example, Farfetch now has a pre-owned section, plus its Second Life service for reselling designer bags, while Poshmark is principally a luxury resale platform.
In the UK, younger millionaires are among the most open to making pre-owned luxury purchases. The 18-34s are significantly more likely to have already bought pre-owned items (37%) than the 35-54s (24%) and 55+s (17%). They’re also the most likely to be interested in doing so in the future, but not just yet (42%).
However, just because younger millionaires are a vital segment, doesn’t mean that resale interest is primarily determined by relative wealth. Those with £5-10m investable assets are significantly more likely to consider buying pre-owned luxury items in the future (42%) than those with £2-5m (29%) or up to £2m (26%).
Aside from potential lower prices, plus appeal among young millionaires, why buy pre-owned? Many argue it’s the sustainable choice – saving materials and resources by repurchasing existing items, rather than increasing the demand for more and more products.
Strong interest in pre-owned clothes and jewellery
Three in four UK millionaires are either quite or very interested in buying pre-owned jewellery and watches (76%) or clothes and shoes (74%). Two-thirds are similarly interested in pre-owned handbags and briefcases (66%) or fashion accessories, such as sunglasses or scarves (65%).
In these fashion categories, the appeal of pre-owned purchases is strong across all age groups. For example, 81% of 18-34s are interested in pre-owned jewellery and watches, but so are 74% of 35-54s and 73% of over 55s.
Previously, some luxury brands had reservations about encouraging resales due to fears of revenue cannibalisation, declining prestige, or increased counterfeiting risks.
Benefits of engaging with this growing market
- Endorsing reselling under brands’ control and on their terms – otherwise, it will just happen anyway, but without their involvement
- Creating new service and revenue streams by reselling (or repairing, then reselling) pre-owned fashion in-house, following the examples of Gucci and Farfetch
- Partnering with established third-party resale marketplaces for a share of the profits, as Vestiaire and Alexander McQueen, or The RealReal and Burberry, are doing
- Attracting new customers – for example, younger HNWIs, luxury bargain hunters, or those seeing sustainability considerations as key purchase criteria
- Increasing the product lifecycle by embracing the circular economy – Gen Z is willing to pay more for sustainable goods and brands perceived to be sustainable
With so many UK millionaires open to making pre-owned purchases, abstaining from the resale market may mean missing out on highly lucrative opportunities.
Savanta’s MillionaireVue is a quarterly omnibus with c.500 HNWIs in the UK, US, and China. For more information, please click here.
To find out more about our wealth and luxury team’s work, or to speak to one of our specialists, please click here.