by Jesse Johnson, founder, and CEO of STORE 5a
Since the pandemic, the fashion industry has evolved tremendously and has forced companies to find new ways to serve their customers better. Modern shoppers, also known as conscious consumers, seek the delicate balance of trying to stay “on-trend” while spending their money responsibly and keeping sustainability top of mind. With vacant stores, brands were forced to meet customers where they were – online. The pandemic pushed traditional brick-and-mortar retail giants to begin investing in e-commerce more than ever before. The sudden change was the shakeup many needed to drop dying/underperforming areas and make the bold move of diving headfirst into key emerging trends such as diversification and sustainability.
While hot before the pandemic, the luxury re-commerce market has continued to catch fire. Today it has an estimated worth of $200 billion and is predicted to grow steadily by 30 percent each year. Brands such as Lululemon and Target have noticed. They have recently announced that they are expanding into the space, which is set to be worth upwards of $47 billion by 2025.
It has been long known that the new generation of shoppers not only wants but expects luxury brands to be sustainable, inclusive, and purpose-driven. Until now, change has been slow; however, this all could change soon. According to the latest True-Luxury Global Consumer Insights Report, Gen Z and Millennials are set to represent more than 60 percent of the luxury market by 2025. It is, of course, no wonder that the generation has flocked to secondhand as conscious consumers are growing increasingly concerned about the harmful environmental effects of fast fashion.
Yet despite all the changes seen throughout the last couple of years, more change is expected ahead. Coming out of a two-year pandemic, consumers and fashion brands, alike, feel the impact inflation is having on their wallets. It is no secret that the cost of goods is going up. Louis Vuitton, for instance, increased their prices between 7-20 percent in February. Similarly, Rolex raised the prices of many of its watches by roughly 10 percent, and last year jewelry prices rose 9 percent on average. It’s no surprise that customers have turned to resale as a more affordable alternative.
The true beauty of re-commerce is that it not only provides a solution for customers looking to save money and preserve the environment, but also for those who want to sell their luxury. Resellers such as STORE 5a help facilitate the selling and authentication of these goods, whereas before, customers’ only alternatives were auctions, pawn shops, or eBay.
With more brands trying every day to incorporate circular economic principles into their business, resale has become an obvious option. This and the fact that prices for new luxury items continue to increase has many in the resale world expecting 2022 to be a strong year for sales. Customers are aware of how hard it has become to buy these items new and are more than happy to acquire them second-hand. The shifting market perspective and increased worry about sustainability show that the resale market is here to stay.
Jesse Johnson is the founder and CEO of STORE 5a, a luxury re-seller with locations in Ohio and Tennessee. He launched the company in 2015. As a family member of the revered Diamond Cellar company, Jesse is a third-generation jeweler.