The resale of luxury items is reshaping the industry by transforming them into long-term investments rather than fleeting purchases. This article explores the main reasons behind the surge in demand for pre-owned luxury and the unique opportunity it offers brands to engage with a new generation of discerning consumers, all while preserving the timeless quality and heritage of these exceptional creations.
The polar opposite of the throwaway mentality perpetuated by fast fashion, luxury has a golden opportunity to lead by example. And nowhere more than in the watch and jewelry markets.
A favorite maxim of former Hermès chairman Robert Dumas was that “a luxury product is one that can be repaired.” Luxury is timeless by essence: A finely crafted watch is passed from generation to generation; an item of precious jewelry or a painting become heirlooms; a bag that has earned aunique patina is lovingly maintained, as is a collectible car.
The list is long of these rare and precious objects that we preserve, protect, repair, pass on or resell. Which is why the business model of reselling luxury goods is here to stay. It transforms the notion of immediate consumption into a long-term investment, through products whose value sometimes exceeds their initial purchase price.
Yearly sales of pre-owned watches and jewelry are estimated to be wortharound €22 billion, according to Boston Consulting Group, which predicts the segment will grow at an annual rate of around 8% between now and 2025, versus 2% to 3% for the luxury industry overall.
Turning specifically to the pre-owned watch market, it represents some €17 billion. Deloitte forecasts that it will reach €37 billion by 2030. To put this into perspective, the primary market is currently estimated at €53 billion.
In its recently published 2023 study, Deloitte confirms that, even though the pre-owned watch market has been volatile of late, confidence remains strong. More consumers (39% versus 32% in 2022) say they are likely to buy a pre-owned luxury watch in the next year.
Despite this, brands remain reluctant to enter this new market. Only a handful of major names, including Richard Mille, Longines, Zenith and Vacheron Constantin, have developed their own certified pre-owned programs.
Consequently, the pre-owned market is serviced mainly by intermediaries, including digital marketplaces such as WatchBox, Watchfinder & Co. and Chrono24; retailers such as Bucherer, Hodinkee and Watches of Switzerland and, of course, auction houses (Christie’s, Sotheby’s and Phillips among others).
The market for pre-owned watches presents enormous growth potential. By way of comparison, Porsche is already achieving strong performance with its pre-owned program, selling the same car as many as three times.
The market for pre-owned luxury goods gives brands an opportunity to better know and serve their customers, and to win their loyalty by strengthening the bond with them.
Repair, reuse, resell is an apposite response to köpskam, the “shame of buying” movement that originated in Sweden.
Indeed, pre-owned is a formidable weapon in combatting fast fashion waste. More important, it confirms the quality and longevity of the purchased item, preserves its story and history, reassures customers as to authenticity and, especially, meets new consumer expectations.
Why, then, are luxury brands so slow to give their products a second life? Are they afraid it will cannibalize their new collections?
Are they concerned about the image it will convey to customers? Are they worried about market resale prices? Or do they simply lack the structure to manage this new business? The answer to all these questions is probably yes – which is quite understandable.
But demand is there and customers have a way of finding what they want. In land planning, it’s known as a desire path: the unpaved route that pedestrians take across a neatly mowed lawn because it’s shorter or more convenient, and which becomes a new road as more and more people follow it.
Surely the time has come to officialize these “desire paths” and make them accessible to all.
