Understanding the luxury resale market can sometimes feel like you’re crossing a minefield of convoluted statistics, confusing tips, and a series of perplexing buying and selling strategies. It’s fairly common knowledge by now that the market has grown tremendously in recent years and is continuing to do so. However, there’s an abundance of new revelations being uncovered about luxury resale. The RealReal’s 2021 Luxury Resale Report reveals some intriguing insights about the market, most specifically the rise of vintage and the role of younger consumers. The burgeoning luxury resale market is at the forefront of a seismic shift within the fashion industry. As we see shoppers’ priorities and the way they approach purchasing luxury fashion change, it is important now more than ever to understand what’s driving the secondary market and how it’s changing. So let’s take a look.
The RealReal has dubbed vintage bags “the new smart investment” of 2021. And it’s not just vintage styles that are no longer available new seeing a surge in popularity. Styles still available first-hand are very much in demand and rising in price on the secondary market. In fact, the average sale prices of vintage bags are growing at a rate well above modern versions of the same styles. The RealReal found this to be true of the Gucci Jackie, Chanel Flap Bag, Louis Vuitton Speedy 30 and Hermès Constance. A key takeaway from this is that it’s not simply vintage style designs that are growing in demand and popularity but more specifically bags that are actually vintage. In terms of luxury fashion, a bag has to be at least 10 years old before it is considered vintage.
Vintage fashion has changed tremendously in recent years. From its public perception and demand to availability and price, the vintage fashion scene has evolved at a shocking rate. Naturally, many luxury brands have begun diving into their archives for design inspiration and have re-released past popular bags to great success. Think the Dior Saddle, Fendi Baguette, Prada Re-Edition bags, Gucci Jackie 1961 – all re-releases. And vintage fashion’s grip on the handbag game of today doesn’t stop there. Many fashion houses have used their vintage bags as a springboard, incorporating key design elements of these styles into brand new bag releases. For example, Louis Vuitton recently released a new range of Papillon-style bags inspired by their Papillon bag designed in 1966.
But the difference in the price rise between vintage and modern versions of the same bags tells us something interesting. According to The RealReal, the average sale price of a vintage Gucci Jackie bag has grown by over 100% from the first half of 2019 to the first half of 2021, compared to over 40% for the modern version. This indicates that the appeal of vintage within luxury fashion is about more than just vintage-looking designs and aesthetics. Instead, it reveals that shoppers are increasingly drawn to bags that are actually vintage. And this presents a unique opportunity for the resale market because it offers something that first-hand retailers cannot.
The RealReal credits the rise in prices of vintage handbags to the rising interest in vintage from younger generations. Moreover, their report revealed that younger generations, particularly Gen Z, are increasingly viewing luxury products as investments. “Younger generations have embraced newer forms of investment such as crypto and NFTs, and they’re now looking to luxury goods, which can yield significant returns even after a piece has been worn,” says Sr. Director of Merchandising at The RealReal, Mayank Hajela. The RealReal found that the greatest growth in luxury investments is among younger buyers. High-value Gen Z buyers have risen 61% year-over-year, along with high-value millennial buyers rising 39% year-over-year.
Younger generations are interested in buying big and selling bigger. According to The RealReal’s findings, high-value Gen Z consignors have risen 110% year-over-year, along with high-value millennial consignors rising 50% year-over-year. Gen Z and millennials make up a huge amount of luxury resale’s consumer base so this significant rise in interest in high-value items, both buying, and selling, marks an important shift in the market. According to The RealReal, “Gen Z is flipping to earn big returns.” Vintage bags increasingly present a great opportunity for this owing to their rapid price increase in recent years.
Luxury resale is still in its early stages, particularly when compared to the long history of the luxury fashion industry. From the start, vintage has always been a key component of the second-hand luxury market as it’s grown from an afterthought for many shoppers to a well-respected method of buying luxury. Therefore, it’s no surprise that vintage bags are rapidly becoming one of the best investments in luxury resale.