The luxury fashion industry is witnessing a significant shift in consumer behavior and market trends, as highlighted in the latest report by The RealReal. This comprehensive analysis sheds light on changing preferences in the luxury bag market, the impact of leadership changes in major brands, and the evolving motivations behind consumer purchases in the context of a potential recession and global challenges.
The Bag Trade: A Downward Trend in Ultra-Luxury
Over the past three years, the luxury bag market, dominated by iconic brands like Hermès, Chanel, Gucci, and Louis Vuitton, has seen a remarkable price surge, with bags selling for over 70% of their MSRP. However, the tide is turning in 2023. The RealReal’s report indicates a 5% decrease in the resale value of these high-end bags in the last six months. This shift signals a growing consumer interest in more affordable, yet trendy options from brands like Bottega Veneta, Prada, Miu Miu, Dior, Burberry, and Valentino.
Rising Stars: Lower-Priced Luxury Brands
The report highlights a steady increase in sales for lower-priced luxury brands over the past 90 days. While the average selling price (ASP) for stalwarts like Hermès, Chanel, Gucci, and Louis Vuitton is still up by an average of 17% since 2019, the growing consumer interest in more accessible luxury brands is undeniable.
Gucci: A Brand to Watch in 2023
The departure of a creative director often marks a pivotal moment for fashion brands. According to The RealReal, Gucci could experience a surge in demand following the announcement of Alessandro Michele’s replacement. Historical trends suggest that such leadership changes make older pieces more collectible, while generating excitement about the brand’s future direction.
Consumer Behavior: Value and Values in Shopping
The potential recession, climate crisis, and global unrest are influencing consumer shopping decisions, pushing them towards value-based choices. The report reveals that 66% of consumers are turning to resale shopping primarily for better deals. Furthermore, consumers are increasingly opting for ‘fair condition’ items and expressing themselves through fashion while adhering to sustainable shopping practices. As Rati Sahi Levesque, Co-CEO and President of The RealReal, points out, the value of resale is unique to each individual, reflecting the diverse motivations and personal values of shoppers.
The luxury resale market is undergoing a transformation, driven by economic factors, environmental concerns, and shifts in consumer preferences. The report offers valuable insights into these trends, highlighting the dynamic nature of the luxury fashion industry. As we move further into 2023, it will be interesting to observe how these trends evolve and shape the future of luxury fashion resale.