Can the sale of secondhand luxury products transform the market?

The rules of the game in the luxury industry are changing, and this adaptation to the new market criteria being imposed as a result of the unprecedented shift in the expectations of a younger generation of consumers is leading to the emergence of new business models for which most brands are not fully prepared.

And Asia, once again, is setting the pace for a symphony that is difficult to interpret and that demands greater cultural and spiritual integration, typical of a market accustomed to identifying relationship models where the product takes a backseat, giving rise to other possibilities such as the one I will describe in this article.

The new luxury consumers: Demand and value

Younger, increasingly affluent customers have significantly higher expectations than previous generations. They are willing to explore new experiences and demand much more from brands, even when they have the resources to purchase the most exclusive products. Today, even for luxury consumers, “value for money” is a decisive factor when choosing which brand to buy.

Therefore, perceived value is no longer limited to the product itself, but also includes a series of intangible aspects that shape the psychology of luxury purchases. From sustainability, culture, art, to brand narrative, these elements are essential to winning over next-generation buyers.

The revolution represented by secondhand sales in luxury

The secondhand market, which was only a marginal niche a short time ago, has become a global phenomenon that is redefining the way we consume high-end goods. While the prices of new products are skyrocketing, the value of used items is also increasing, although not at the same pace. This has attracted not only individual sellers but also major players such as Sotheby’s and Christie’s, which traditionally focused on fine art and antiques and are now immersed in luxury resale. Even companies like Walmart have begun partnering with platforms like Rebag to offer authentic luxury goods.

And this leads me to conclude that this is not simply a passing fad, but rather an entire structural transformation of the market.

This revolution is being driven by three main factors:

• Digital convenience: Younger, digitally native consumers are comfortable shopping online and value easy access to exclusive products.
• Changing values: Recent studies show that more than 60% of Gen Z and millennial consumers have purchased pre-owned luxury items, compared to less than 45% of baby boomers.
• Sustainability: For these consumers, luxury is no longer exclusively linked to the purchase of new products, but also to more conscious and responsible purchasing decisions.

The disconnect between price and value

In recent years, luxury brands have pursued a strategy of almost relentless price increases. We’ve already seen brands like Hermès, Chanel, and Louis Vuitton increase their prices by between 5% and 20% in the last year, and some have even doubled their rates over three years. While some of these adjustments can be justified by inflation and rising costs, the gap between prices and the perceived value proposition has grown significantly.

And what has been the result? Many consumers are looking for alternatives in the secondhand market, a space where they can find models from previous seasons at significant discounts and, sometimes, with even higher quality.

Challenges and opportunities for luxury brands

The rise of resale presents a strategic dilemma for luxury brands. On the one hand, this growth threatens to dilute exclusivity and control over distribution. On the other, it represents a unique opportunity to connect with new customers and respond to growing consumer demand.

The strategic questions brands must ask are:

Should they actively participate in the secondhand market?

How can they integrate their resale platforms to maintain relevance?

What pricing strategies can they adopt to reduce the disconnect between perceived value and cost?

Furthermore, brands must evaluate how to meet the expectations of Generation Z and millennials. It is surprising how many companies still underestimate the dramatic changes in the behavior and priorities of these new consumers.

Reshaping luxury in the 21st Century

New generations are transforming the meaning of luxury. For an industry traditionally built on exclusivity, this shift represents a profound challenge, but also an exciting opportunity for reinvention. The question is no longer whether brands will adapt to this new reality, but how quickly and effectively they will do so.

In recent conversations with executives from various brands, I’ve sensed a growing interest in reevaluating strategies. The time to act is now, and the decisions made during this period will shape the course of the luxury industry for decades to come.