The choice of the product that has passed many previous lives at the expense of its new version is becoming more and more popular. In this race, Web 3.0 seems to benefit some…
As global warming increases, new products are no longer provided. Therefore, platforms for selling fashion items such as “Vinted” or “Vestiaire Collective” have not been very popular. In the face of these pure players, how will the luxury brands cope?
Second hand race winners
At the time when Europe reached 10% inflation, the second-hand market became more and more interesting. For everyone, it gives the privilege to give a new life to the unused, to save money on the purchase of important things, to favor quality over convenience, to revive the vintage… These many advantages naturally attract the new consumers such as the middle class. or, more specifically, generation Z who love the ecology of an interconnected world.
At the heart of this market, estimated at 86 billion euros in Europe, and expected to grow by 15% to 20% annually, the fashion sector is ahead of all. In fact, after the rise in popularity of dirtying “fast fashion”, producing modest clothes at full speed within it, it is rumored that it is sure to be found that it is sure to catch up with it second hand in next years.
An increase of 140% between 2019 and 2021second-hand e-commerce platforms are strongly responsible for this because “they hold 60% of the online fashion market”. Driven by the global crisis of Covid 19, the Lithuanian platform Vinted, one of the leaders in the second-hand fashion sector, now allows almost 50 million “vinties” to monetize their wardrobe. If it has already made 70% of purchases in 2020, Vinted now faces strong competition from several platforms such as Vestiaire Collective, whose business model clearly encourages more responsible fashion. With 550,000 new articles per week, the latter focuses on the luxury sector, whose values and clients may not be what is expected.
Luxury brands compete
If the “fast fashion” that promotes cheap fashion and the overproduction of new clothes does not match the uniqueness, rarity, authenticity and high prices of the luxury sector, it will be difficult for brands to interact with with always bargain prices on. the second hand. But in a world of climate emergency, they find more in common than one might think, because according to the Hermès Foundation, “Luxury is what is durable, what is fixed, what is in ahead”. Second-hand values are strongly echoed where most consumers go there to find a unique product, second-hand luxury is expected to experience an annual growth rate of 10 to 15% in the next ten years..
Thus, some luxury houses try to manage their own second-hand market in the image of the Gucci brand, offering a selection of vintage pieces that have been newly restored by in-house craftsmen. using its GucciVault online site. Unfortunately, these opportunities in the second-hand market are clearly limited by those offered by pure players, who multiply public advertisements. Understanding their strike force, some have formed partnerships such as the Kering group, which acquired 5% of Vestiaire Collective’s capital in 2021.
This market, led by the giants, puts the brands at a disadvantage, because they no longer have the power to sell the prices of goods that are usually 50% cheaper online, and without the knowledge of the actors who uses these “pre-owned” items on the most popular platforms. On the buyer’s side, although some are increasingly arming themselves, platforms increase reliability problems or payment scams, alienating the most timid consumers. After a study, “71% of French people say they buy second-hand luxury goods more often if the brands themselves manage their sales”. If adapting the popular and sustainable circular fashion to the real world is too difficult if you are a luxury brand, the technologies of tomorrow’s world will surely change the game.
New technology opportunities
With the advent of web 3.0, many luxury retailers are gradually settling into this new digital universe, commonly known as the “metaverse”. We found especially the Dolce & Gabbana brand offered in 2021 to virtually and / or physically get one of the 9 unique pieces of the “Collezione Genezi” collection on the UNXD platform. In 2022, it participated in the first Fashion week in the metaverse Decentraland with many others such as Etro, or Giuseppe Zanotti and launched an ephemeral store that allows users to dress their avatars in the most beautiful home pieces. According to a study, $25.66 million should have been reported by Dolce & Gabbana following the different projects of this new universe that contains a real potential for the latter because of its many manifestations.
In fact, the presence of luxury brands in Web 3.0 brings them closer to a modern generation that consumes a lot of these products called “Non Fungible Tokens” (NFTs). In a technical way, they are verified on the blockchain that guarantees their authenticity, rarity and exclusivity – concepts that cannot be forgotten when talking about luxury. To the delight of these users who seem to be similar to those found in the second hand, these NFTs can easily be exchanged in this market because all the important information of the life of the article will be kept in the blockchain. : history holders, price… Consequently, the act of resale is simplified
Besides all the attributes of NFT mentioned above, they have the possibility to give expensive brands sovereignty in the second-hand market. Equipped with “smart contract” technology that offers several possibilities such as the generation of “royalties” (brand payment for each sale of an NFT), luxury labels can thus benefit from a lifetime annuity of some articles. . In addition, this information can hardly be ignored if we know that a Gucci bag is sold for more in the metaverse. than its real-life counterpart. On top of that, they can even collect data on second-hand players, the future prospects of the first-hand market, which, in the form of an avatar in the metaverse, will offer brands a an unprecedented angle of knowledge.
To impose themselves on the ever-growing second-hand market, luxury brands must free themselves from the platforms, while getting closer to generation Z, their main target. Finally, all this emission behind this uncertain world where they have the possibility to issue digital items related to their articles that ensure not only complete consumer confidence, but also an additional economic value, so isn’t this a boon for luxury brands? With more than half located in the test/launch phase before 2025 in web 3.0, luxury brands are trying, without perhaps realizing that they have a lot to gain.