Second-hand used to be a taboo. No self-respecting fashion fan would admit to buying someone’s cast-offs, especially just a few seasons old. Fashion was all about new, new, new. Times have changed. Now it’s about the nearly new; pre-owned pieces bought for a thrifty price, just a few seasons after their catwalk debut.
At the same time, avid shoppers have become shrewd sellers, turning to booming consignment websites to shift unwanted goods quickly and conveniently. Previously, their options were donating or going through the inconvenient, time-consuming process of selling-on through bricks and mortar stores. Online, the vast eBay marketplace was their only obvious option.
Julie Wainwright, chief executive and founder of The RealReal, noticed a gap in the market. “As a shopper, you run out of space in your closet. After a while it just piles up. Before us your options for reselling were limited and clunky,” she explains. In five years of business (predominantly in the US), The RealReal has sold on 2.5m items. Chanel, Hermès, Prada, Rolex and Louis Vuitton are some of the biggest sellers. Consignors earn 60 to 70 per cent of the sale.
“Second-hand used to have a stigma. Today it has none: worldwide last year $200bn dollars of personal luxury products went into the market, in the US $60bn were sold,” says Wainwright. “There are multiple reasons — one is a generational shift, one is a green thing — when you buy something previously owned, you’re recycling, it’s a circular economy — the other is the internet and access to information.” To her, the biggest shift that laid the foundations of the consignment boom occurred in 2008. “It was such a devastating time for almost everyone and the financial crisis brought a sense of guilt to shopping. That said, no one is going to stop buying luxury but post-2008 the idea of buying luxury on value became important.”
While the US market is dominated by The RealReal, France’s Vestiaire Collective has monopolised the European market. It started in 2009 with just 3,000 items from friends and networks, discloses Fanny Moizant, one of the site’s original six. Now, they have more than 400,000 items online and took €78m in 2015. Its bestsellers are Louis Vuitton, Chanel and Louboutin, though mid-priced labels such as Isabel Marant and Maje also do well. Moizant also cites the financial crisis as a catalyst. “I saw the marketing phenomenon that was the fashion bloggers. In France they were called the Recessionistas, because they appeared at the height of the crisis and were finding a smart way of reselling their own pieces on blogs and making money, even though there was no real system.” She agrees that the taboo around “second-hand” has disappeared.
“Fashion consumption has changed. Your mother or grandmother would buy a coat for a lifetime, we buy two or three coats a season. People need our service — they need a place to let go and get rid of this excess.”
Their success comes from their ability to mimic the luxury shopping experience. “We have a deep appreciation of the brands, the products, the quality and the craftsmanship,” says Wainwright. “Ebay was sad. The romance was broken. It lacked integrity. So our goal was to maintain the brands’ integrity.” Moizant agrees: “Before us, there was a second-hand market but it lacked this — we brought in two big pillars. The first was trust, which eBay lacked. The second was curation — the internet is so vast, so we do the job of selecting the best pieces. We have a team of stylists, who each day go through about 4,000 pieces and vet them digitally and pick the best. We also authenticate with a whole other team of experts.” Often this involves working with brands and anti-counterfeit organisations.
Neither platform sees itself as a vintage site. “We want people to feel like the pieces are in stores now, or could be — that it’s modern,” says Wainwright, explaining that most products are two to three years old (though some handbags or watches go back 10 to 20 years). The platforms offer the same service as luxury retailers — slick delivery, broad choice, informed advice, a social shopping experience, as exemplified by Vestiaire’s user profiles. “We go beyond e-commerce into being a social network for fashion. It’s so rare to find that in a second-hand website — and that’s what women and girls love; sharing their love of fashion with other fashionistas.”
It’s all about celebrating the joy of shopping. “Our average customer shops six times a year, so every other month — they browse,” says Wainwright.
Moizant’s Vestiaire shoppers spend on average €400 each time. She’s identified two main behaviours: “One is looking for a piece you missed — sold out, or something you regretted not buying. The second is price-driven — you want a Chanel bag but can’t afford full price.
On both sites, the selling experience is just as slick — aside from photographing garments and deciding what to sell, there is little to worry about. “We make it really easy — we pick up the pieces, we get rid of any inconvenience or friction. Most of our consignors work a lot — they don’t want to run around chasing their previously owned goods,” says Wainwright. “We pay and communicate regularly — it becomes an easy source of income.” The majority of our consignors are not whales — they’re making $8,000-$10,000 a year, though others have made enough to remodel their homes.”
Vestiaire offer a concierge service for the top 10 per cent of clients — they will photograph, sell and store items on their behalf. For those doing it themselves, there are simple instructions detailing how to shoot your stock in the best way.
Wainwright can see the potential for attracting those who shop at the highest end. “A key growth area of The RealReal is jewellery. We’ve set up valuation offices for fine jewels and watches in New York, Chicago, San Francisco and Los Angeles where you can meet with a gemologist and get a report about what they would sell for. It’s totally different to the pawnshop experience.” Onsite you’ll find special edition Rolexes selling for more than $40,000 and Cartier bracelets for more than $10,000.
Noting the success of these womenswear platforms, in 2014 Arun Gupta started menswear market place Grailed — a reference to “that specific piece you obsess over owning, but can’t ever find or afford”. The site began in his bedroom after he trained himself to code. In the week we speak, 50,000 items were on the site. The team has also just launched a content platform, Dry Clean Only, to profile and discuss the items on Grailed. “When we started out there were five to 10 women’s marketplaces, already fairly popular,” he explains.
A fashion obsessive, like Wainwright and Moizant he noticed that the second-hand gems came from personal connections, rather than surfing eBay. “Not having much money to spend, I spent hours on the internet looking for deals. I found the best prices — and best pieces — always came from friends or other enthusiasts on key menswear forums.”
On Grailed, bestsellers are very much what’s currently big in stores; Saint Laurent, Raf Simons and Rick Owens, and streetwear brands such as Supreme and Palace, though the site also has a reputation for playing host to rare gems, such as Simons pieces from the 2000s. Gupta takes a low commission; 6 per cent. He identifies the same two user patterns as Vestiaire’s Moizant. “Some people are specifically looking for rare items to add to their ever-growing collections — we’re one of the few places you can find rare Japanese brands like Undercover and Julius. At the same time many people are just looking for good deals.”
So what do the brands have to say? Legally they have no right to complain, thanks to the precedent set by pivotal case Tiffany Inc vs eBay Inc in 2010. “Ebay won. Brands were told that they can’t control the resale market. That case is so clear that there’s no obstacles for us to sell something that is previously owned,” says Wainwright. “We’re not going anywhere. The world has changed. And at some point brands are going to have to realise that.” Less than 5 per cent of The RealReal’s sales come from vendors, though Wainwright sees growing ways to collaborate with brands now their relationship has mellowed. “They are going through an evolution. Our first year, I heard they hated us. Now, they’re keen to find a way to work together. They’ve realised they can maybe learn something from our data.” In her mind, they should be grateful.
“This year, we’re going to put into our consignors’ hands, all of whom are in the US right now, $220m in payment. They’ll use the money they make from the site to go back into the store to buy new — they’ll go and buy more.”
What they buy will be increasingly shaped by the resale market. One of Wainwright’s proudest achievements is the way she’s slowly affecting the luxury market and changing how people shop — particularly by putting the spotlight on the true value of specific pieces and popular brands. The lack of lasting appeal for some key houses is evident in the sites’ pricing and sales and may surprise. Although changes within a brand can do a lot to create resale buzz.
“Two-and-a-half years ago, Gucci had really bad resale value,” offers Wainwright, citing the recent appointment of Alessandro Michele as a turning point. “Now it’s right up there — it’s big. They reinvigorated the brand and people got excited, so now we can even sell old Gucci, from pre-Michele, particularly the logo stuff — it has value again.”
She feels resale educates consumers, giving them power and knowledge. “Our shoppers look to check the resale value of things. They do notice if a brand has no resale value and move away from it. When I meet consignors they always say ‘You’ve changed the way I shop.’”
Photograph: Vianney Tisseau
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