Prelovv and Converteo: The second-hand market is a strategic opportunity to seize for luxury brands

The second-hand market, estimated at $194 billion in 2023, is experiencing impressive growth with an annual increase of over 12%, illustrating a significant shift in consumption habits toward a more circular and sustainable economy, driven by economic and environmental considerations.

The luxury segment stands out particularly, with a value expected to double by 2032. This dynamic is notably supported by specialized marketplaces such as Vestiaire Collective and The RealReal, which have seen their user base grow significantly in just a few years. Major second-hand players like Vinted are now offering new item verification services for high-value products.

In light of these developments, luxury brands are increasingly recognizing second-hand not only as an ecological imperative but also as a strategic opportunity. Marie-Caroline Randon, CEO and co-founder of the market intelligence and pricing solution Prelovv, and Mehdi Fenjiro, senior manager at Converteo and lead in the Luxury sector, share their insights on the levers of second-hand for luxury brands.

1/ To begin with, what is Prelovv’s value proposition?

Marie-Caroline Randon: Prelovv offers a market intelligence and dynamic pricing solution, specialized in the luxury and fashion second-hand market. Specifically, it enables luxury brands to monitor their second-hand market, analyze the desirability of their products in the secondary market, as well as their residual value. It also helps fashion brands looking to launch or that have already launched a second-hand offering to maximize their margins by recommending the right buyback and resale prices.

Mehdi Fenjiro: Prelovv addresses a rapidly growing trend in the luxury sector, where second-hand is becoming strategic. This growth is indeed fueled by consumers who are aware of environmental issues and/or eager to own luxury products at reduced prices. Therefore, it is an essential opportunity to attract a younger audience and to strengthen their commitment to sustainability—and thus their brand image—over the long term. 

2/ Specifically, how does the second-hand market allow for measuring a brand’s desirability?

Marie-Caroline Randon: We have observed that the second-hand market provides significant insights into a brand’s strength and the post-sale usage of its products. By studying the volumes of products in circulation, sales volumes, and the number of products added, a brand can understand its dynamics in the secondary market. By analyzing prices, it can assess the residual value of its products and thus track its reputation in the second-hand market.

Mehdi Fenjiro: The second-hand market indeed reflects the desirability of luxury brands, which is driven by the heritage that their products embody and the quality they represent over the long term. We even see that certain products appreciate in value in the secondary market, particularly for rare items that are in high demand. The Hermès Birkin bag, already famous for its exclusivity and high demand, can sometimes see its value increase dramatically in the secondary market, such as a 2001 edition in Dalmatian grain leather that sold at auction for €44,900, well beyond its original price. This also applies to items with a well-established reputation for timelessness and durability, like certain classic Chanel bags, such as the Boy Bag, which appreciate over time (which the brand takes into account by regularly increasing its new prices). These items are not just goods; they embody the history and values of the brand, creating deep connections with consumers seeking authenticity and prestige, even when they have been “previously loved.”

3/ How can the second-hand market coexist with the primary market?

Marie-Caroline Randon: The second-hand and primary markets are two very different markets, with varied buyers and uses. Second-hand buyers are often a younger target audience, although we are seeing this market appeal to an increasingly broad demographic, particularly due to its prices and extensive selection. It is therefore important for brands to understand the behaviors of these buyers in order to continue offering a differentiated primary market product and to regain control over the secondary market.

The second-hand market is also a valuable trend observation pool for brands. We see fashion phenomena emerge for certain types of products or models several years after their initial release!

Mehdi Fenjiro: Indeed, we recall the case of the famous Gucci monogram belt, where sustained demand on second-hand platforms inspired the brand to relaunch and modernize this classic during the 2015 runway show by Alessandro Michele, thus reviving its status as a fashion icon among a new generation, supported by the subsequent explosion in popularity, driven by celebrities and influencers. The second-hand market is generally a strategic extension of the primary market, allowing brands to reach younger, less affluent, or eco-conscious consumers. Gucci, for example, collaborated with The RealReal and encouraged the resale of its products, not only sending a strong message to an audience it sought to conquer but also gaining insights into these consumers to enrich its product and communication strategies.

4/ How does price analysis help secure brand profitability in their second-hand operations?

Marie-Caroline Randon: The second-hand market involves lower margins for brands, as they need to buy back their own products and resell them. Second-hand buyers quickly educate themselves about the uses and prices on various resale platforms. Therefore, it is essential for a brand operating in the second-hand market to know the value of its products in order to position its resale prices intelligently, maintain its margin, and offer attractive buyback prices to customers.

Mehdi Fenjiro: Just like in the primary market, the pricing of second-hand luxury products is closely tied to the desirability of the product, which is influenced by rarity and brand image. To secure profitability, a rigorous analysis must encompass not only resale prices but also key elements such as brand perception and consumer trends. The use of social listening (what volume of buzz is surrounding my brand/product and what sentiment is associated with it?), brand lift surveys (how does my audience perceive the value of my products compared to their price?), and web analytics (what is the volume of organic traffic to my site/my product pages? what is the trend in stock levels displayed?) allows for a deeper understanding, thereby informing price adjustments to maximize margins while capturing consumer interest.

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At Converteo, we master the nuances of pricing in the luxury sector, combining our strong sector expertise with data-driven pricing strategies. To optimize your brand’s performance and pricing strategy—particularly around the second-hand market—our team supports you from strategic framing to operational management. Contact us, and let’s discuss your project.

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