Luxury Resale and the Preservation of Prestige

Scrolling through popular fashion resale sites such as Poshmark, Depop, the Vestiaire Collective, or the RealReal, it’s easy to see the grip that classic luxury brands have on the secondhand marketplace. Gucci and Ralph Lauren are constantly trending on Poshmark, and Chanel is one of the most-searched brands on Depop. In recent years, luxury resale, or the sale of pre-owned luxury items, has become increasingly popular online. The secondhand market offers consumers a way to purchase coveted brands at a discounted price while also providing a more sustainable pathway to consumption. The resulting demand is tremendous — the global market for luxury resale was valued at $32.6 billion in 2021. Luxury brands are unsure of how to react to this growing market, but they are increasingly revealing what they’ll do to preserve their prestigious names.

Second-hand and consignment stores have long been a place to find cheap, quality goods. Yet recently, the idea of “thrifting” has been co-opted by online influencers who promote an eco-friendly and stylish image. They “greenwash” their purchases by advertising their sustainability and ignoring the acceleration of shifting style trends and worship of luxury goods. These new buyers with high-end tastes have dominated not only luxury-specific stores but also general thrifting marketplaces like Depop, eBay, and Poshmark. Expensive new products in the marketplace have piled onto rapidly rising prices, so that the people most in need of low prices suffer the most.

The enormous resale market has also posed a question: How do historically exclusive brands maintain an air of prestige when products are more affordable on the resale marketplace? It’s a concern that’s been difficult to address. Third-party sellers give luxury brands very little control over who is buying their products. Additionally, authenticating resold items has long been a challenging process. Companies are worried about resale sites because they both change the client base and they allow inauthentic products to circulate and sow public distrust in the brand.

The prevalence of falsely labeled goods was such an alarming concern that in 2020, Chanel sued the popular site The RealReal for selling counterfeit pieces falsely bearing the brand’s label. The luxury giant claimed that The RealReal was guilty of counterfeit, trademark infringement, and false advertising, amongst other charges. The RealReal maintained that its authentication process was rigorous, yet Chanel explicitly mentioned in its complaint that it wanted not only to end counterfeits but also “to maintain the prestige of its brand.” The RealReal tried to counter the suit, but ultimately the company doled out $11.5 million in a settlement. Chanel might have directly gone after the RealReal’s authentication process, but the details of the case reveal the suit’s larger purpose: keeping the brand away from a non-luxurious second-hand marketplace which could damage its prestigious reputation.

Although Chanel showed its apparent distrust for the authenticity of resale markets, it invested in another consignment site called FarFetch while pursuing its lawsuit against The RealReal. The brand chose this site since it has higher prices and creates a barrier of exclusivity that The RealReal aims to eliminate. Since it's clear that luxury resale sites won’t disappear, classic brands have started to work with them on their own terms. This new strategy allows famous companies to maintain control over their credibility and prestige and also project a false image of sustainability to the public.

The real problem in this circular marketplace isn’t the resale sites, which attempt to pair sustainability with the demands of the market, but instead the brands that are trying to maintain their exclusive names. The fervor that these companies generate around their work is what causes thrift store prices to rise, luxury resale sites to fake their labels, and consumers to spend exorbitant amounts of money on overpriced goods.

Despite brands’ concern about the reliability of luxury resale sites, it seems like their popularity will only grow — the industry is projected to hit $51 billion by 2023. The scandals surrounding resale sites have not deterred most consumers, and if anything the partnerships resulting from some brands’ concerns have encouraged the continued adoration of luxury products. Consumers continue to clamor for the goods of giant corporations, unable to see that companies would strongly prefer to make their goods exclusive and unsustainable. It is only if people abandon the worship of these brands, which are more interested in their prestige than sustainability, that the luxury resale market will lose its immense popularity. Unfortunately, a decrease in demand does not appear to be anywhere in sight.