Buying Luxury Without Breaking The Bank
Millennials are the future of luxury – from fashion and accessories to homes and cars – they are the target of every relevant brand. Millennials are free-thinking, they are an individualistic generation that are over 80 million strong.
According to WWD’s Think Tank segment published on April 25, 2016, “By 2035, Millennials will have the potential to become the largest spending generation in history, according to the white paper, “Five Luxe Trends for 2015” by marketing expert Pam Danziger. Millennials’ influence will be felt by 2020 as the oldest Millennials (let’s call them “Millennial+”) are beginning to enter their peak earning years and will have disposable income for luxury experiences. We can expect this shift to continue as more Millennials become Millennial+.”
Today, Kendall Jenner, Cara Delevingne, and Gigi Hadid are on top of the pop culture world; they are influential fashion icons and are featured in all the hottest runway shows and campaigns. These young women have influence over Millennials, and they are drawing them into luxury brands. So which brands are winning them over? How can they afford to splurge on such high end items?
Although luxury brands may not be so transparent when it comes to what is actually selling, thanks to the online resale market, shoppers can easily track what’s hot and what’s not. No longer looked at with disdain, the pre-owned market is growing in both dollars and prevalence. According to the mid-year “State of Luxury Resale” report for The Real Real, one of the most popular resale sites, consumers have an insider glimpse into what people have been buying during the first half of the year.
Surprise, surprise! Gucci is the fourth best-selling brand on The Real Real (just behind Chanel, Hermès, and Louis Vuitton), riding its wave of success thanks to Alessandro Michele’s eclectic charm and the return of the logo mania trend. Gucci now has a 10 percent better sell-through rate than Céline; used loafers from the brand manage to sell for 80 percent of the original retail price. Footwear favorite Christian Louboutin ranks as the sixth best-selling brand on The Real Real, which makes sense because the site now says high-end shoes at the $500 range are selling faster than bags at the same price.
According to the resale site, the accessory of the year has been the backpack; selling 40 percent better than other handbag categories and have seen the largest growth resale value.
Thanks to street-style darlings and Instagram stars, shoppers are splurging on Vetements, Saint Laurent, Self-Portrait, Rosie Assoulin, J.W. Anderson and Zimmerman, all of which saw triple-digit growth, because these young designers have such a strong and individual point of view. The Real Real’s buzziest new brands are Supreme and Off-White — their search rates surged a whopping 1,500 percent and 730 percent, respectively, over the last six months.
Today’s millennials really understand value in a unique way from previous generations. According to Alexis Clarbour, director of pioneer luxury accessory consignment website Portero.com, her customers are now seeing beyond the original purchase and considering how the value of the item will hold up if they decide to resell it. They’re true luxury seekers — the average sale price on Portero, for example is $2,200, and its most popular brand is Hermès.
“For the same reason a consumer chooses to buy a certified pre-owned car, they also desire to purchase a certified pre-owned watch since it’s a smarter, more financially beneficial way of buying luxury,” said Hamilton Powell, founder of luxury vintage and pre-owned watch consignment site Crown & Caliber.
Consumers today are educated and thanks to the internet, research is at everyone’s fingertips; which may be one of the major factors for the growing resale business model. Customers can easily inform themselves about luxury products such as handbags, watches, shoes and clothes. Millennials search for a greater value for their dollar in the luxury marketplace.
While every brand from high end luxury to street brands are courting millennials, The Real Real states that in 2017, Gen Z — that is, ages 22 and younger — is the site’s fastest growing demographic, once again proving that when it comes to shopping, cool teens really know how to do it. Why buy luxury retail when you can buy it used for less?
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