A Thread about state of secondhand fashion
Discussing all things resale with expert Costanza Lombardi
Last Friday, some of you might have got a notification about baby’s first Substack Live! I was joined by Costanza Lombardi (aka. Cos Versation) to discuss the state of secondhand fashion.
We cover where the market is currently at, the concerns and opportunities for both brands and resale platforms, and the shifting power dynamic between the two. Below a summary of some of the key takeaways.
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Understanding the resale economy
The secondhand market is growing roughly three times faster than the primary market, with 60% of consumers saying resale value is a key factor when buying new apparel.
There are three main segments of resale economy pie:
Authenticated luxury platforms like Vestiaire Collective and The RealReal. These curate and verify inventory, with the platform mediating between buyer and seller.
‘Infrastructure’ platforms like Vinted, eBay, Depop. These provide less curation and a broader price range, with a higher gross merchandise value.
Brand-owned resale, when brands take ownership of their own circular ecosystem.
Still, a lot of brands are still feeling nervous about resale. The secondary market lets the market price items independently, potentially contradicting a brand’s own value proposition. Resale prices also act as an indicator of a brand’s overall health, meaning it’s more difficult for brands to control their image.
Speaking of control, luxury houses carefully curate the customer experience - everything from the brand narrative, stores, right down to the tissue paper the product arrives in. Resale strips the product of all these layers of world-building.
One thing I’d point out here is the role of the underground in making a brand cool. Desirability is usually born from subcultures of creative people who take brands, remix them and build lore around them - not a brand’s regular customer. With new designer clothing becoming so expensive these days, secondhand also provides a fun, affordable way for fashion fans to buy into the luxury brands they love.
In my opinion, the appetite for secondhand amongst younger customers and enthusiasts is actually building more heat around these names. Don’t forget that history and legacy are key to the luxury playbook - having people obsess over your archives is actually really good for reinforcing that narrative and building brand equity.
The supply bottleneck
The hidden power in the resale market sits with sellers, not buyers - specifically, the small number of people who have wardrobes full of incredible, unworn pieces and are willing to part with them. Platforms compete for these people the way primary luxury competes for VIC clients. Whoever makes the seller’s experience easiest wins.
For platforms who hold inventory, the operational challenge of photographing, pricing, and describing individual items is one of the main things holding the more curated platforms back from profitability. The solution probably lies in AI tools. Already, Depop uses AI to suggest descriptions and tags based on your photos. Imagine if you could also use your camera to scan a garment and have AI generate a beautiful e-commerce image of it, similar to virtual try-on apps like Doji.
Reaching profitability
Despite their popularity, resale platforms are still having a hard time reaching profitability, due to these operational challenges. Platforms like The RealReal are pushing towards selling more high ticket items, to ensure they’re not wasting money selling cheaper products where the return is not worth the operational cost to sell them.
For luxury resale, authentication is a very expensive (but important) part of the process. And with counterfeit goods becoming ever more uncanny, it’s often almost impossible to spot a fake. Another reason why Vinted is able to grow so fast - it puts the onus on the buyer/ seller to negotiate the authentication process, so they don’t have to do any of the legwork.
What could brand-owned resale look like?
Obviously brands have to be very careful to avoid cannibalising their primary sales by offering cheaper secondhand alternatives. However, the customer for these two segments might actually be different. Owning the full operational ecosystem (including authentication and logistics) allows the brand to control the customer journey, and mediate between the primary and secondary experience, whilst maintaining their overarching brand principles. It’s the same way that brands are able to sell different tiers of products to different customer segments. Ultimately, brands should seek to capture all customers: and that means the resale customer, too.
Finally, the sustainability conversation.
When luxury resale first entered the mainstream, it was positioned amongst the sustainability conversation, which has since been (sadly) deprioritised (another symptom of today’s conservative mood). Now we’re seeing the marketing of secondhand mirroring that of traditional luxury - focusing on storytelling around craftsmanship, rarity and exclusivity.
What happens now?
Long term, Cos is betting on the infrastructure model. Products have innate value - what wins loyalty isn’t curation, it’s service. If you can show the customer what they want and get it to their door tomorrow, you win. The authenticated platforms have the taste and the narrative, but they need to catch up operationally - and fast. When that infrastructure problem is solved, the market will fragment in interesting ways: platforms for outerwear, for kids, for specific decades or houses. And adjacent to all of this, there’s an entire repair economy beginning to unlock. The secondhand market is still young.
Let me know if you enjoyed this format and which topics you’d like to see a deep dive on next?
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