“The rise in high-value purchases that we saw after COVID began has accelerated this year, suggesting a lasting change in how luxury is viewed,” The RealReal’s Senior Director of Merchandising Mayank Hajela said this week in connection with the release of the company’s annual resale report. “Younger generations have embraced newer forms of investment, such as crypto and NFTs, and they are now looking to luxury goods, which can yield significant returns even after a piece has been worn.” The San Francisco-headquartered reseller’s president Rati Sahi Levesque, echoed this trend, stating that “the most dramatic growth” in the luxury resale movement – which saw The RealReal welcome 6 million new members over the trailing 12 months – is coming by way of Gen-Z and millennial consumers, who have driven up prices for things like vintage Gucci and Chanel handbags “at a rate well above more recent versions.”
Highlighting trends that it has seen so far in 2021, The RealReal (“TRR”) pointed a rise in demand for Gucci, which topped the list of the most bought – and sold – brands of the year, with purchases of Gucci goods up by 63 percent, and consignments of Gucci products similarly increasing by 61 percent year-over-year. And while millennials and Gen-Zs may be driving a lot of trends and growth in the resale space, including for Gucci (the Milan-based brand is the overarching favorite of Gen-Z buyers, according to the report), TRR notes that it is actually Gen X consumers (those born between the early-to-mid-1960s and the late 1970s to early 1980s) that are the top buyers and consignors of Gucci products.
Another interesting takeaway from TRR’s recently-released report centers on demand for vintage handbags, for which “average selling prices (“ASP”) grew significantly faster than for their modern counterparts” from the first half of 2019 through the first half of 2021. Gucci’s original Jackie bag, for instance, “led the pack,” per TRR, with growth in terms of the ASP of the brand’s iconic handbag amounting to 2.2 times the ASP of more recently-released Gucci bags.
The spike coincides with Gucci’s relatively recent release of the Jackie 1961, a new bag that references the original Jackie Kennedy-favored bag that was created in the early 1960s. The retail debut of the brand new Jackie 1961 last summer comes in furtherance of a strong market for staple, season-to-season handbags for Gucci and similarly situated brands, with Gucci owner Kering revealing earlier this year that “leather goods carry-over lines [for its cash-cow brand] make up 70-75 percent of [the brand’s total] sales,” pointing to Gucci’s relaunch of the Jackie 1961 for Fall/Winter 2020, and the recent reintroduction of the Bamboo style, which was favored by the likes of Princess Diana. (Hardly a novel phenomenon, carry-over or heritage products have long accounted for a large portion of brands’ revenues; back in 2001, LVMH chairman Bernard Arnault revealed that “in any given year, in fact, only 15 percent of our business comes from the new; the rest comes from traditional, proven products—the classics.”)
Also on the list of vintage bags, whose prices are inching up faster than their newer counterparts: Chanel’s Flap bags (potentially spurred by enduring reports about the growing resale value of this style, in particular, paired with enduring price hikes by the brand), Louis Vuitton’s Speedy 30s, and Hermès’ Constance bags.
In terms of both modern and vintage bags, taken together, TRR named Hermès’ Mini Kelly II 20 bag, Hermès’ Birkin 30, and Louis Vuitton’s Multi Pouchette accessories as its “Steady Resale Value Stars” for 2021, with the average resale value of these items increasing by 162 percent, 157 percent, and 137 percent, respectively.
On the watch front, TRR reveals that collectors are spending almost $1,650 more on watches than they were last year, further add steam to the notion that in the wake of the pandemic, consumers are spending more on bigger-ticket items, likely in lieu of spending on social activities, vacations, and apparel. In a nod to what appears to be a trend of consumers not only upping the ante in terms of the spend on single watches, but also bolstering demand for more, TRR found consumers purchased 1.4x more watches than they sold during the reporting period. Cartier, Franck Muller, and Rolex topped the list of the most-purchased watches, and in terms of watches that are being off-loaded, Gucci, Michele, and Tiffany & Co. watches were among the most sold by consumers via TRR.
And not to be overlooked: streetwear and sneakers, the latter of which TRR found to deliver the greatest return in investment for consignors, and the market for selling them grew by a whopping 383 percent year-over-year, “with millennials and women in particular cashing in, as savvy sellers saw rising returns even for pairs not kept on ice.”
On the streetwear front, TRR uncovered a trend of consumers shying away from formerly red-hot names like Supreme (YoY demand for which was down by 6 percent), Vetements (down 24 percent), Yeezy (down 25 percent) and Off-White x Nike (down 29 percent) in favor of a mix of “preppy” and “outdoors” brands, such as Casablanca (demand for which was up by 358 percent), Polo Ralph Laurent, Salomon, Stussy, Arc’teryx, and Aimé Leon Dore.
Finally, when it comes to jewelry, Chanel took the top spot as the “highest-value” brand of the year, followed – quite interestingly – by demand for unbranded offerings. Decoding the boost in sales for brand-less jewelry goods, TRR says the trend has been “popularized by shoppers looking for one-of-a-kind pieces that express their personal style,” and seemingly, focusing on the style of jewelry (cocktail rings, link bracelets, pendant necklaces, and drop earrings were among the most purchased unbranded high-value jewelry) instead of on the brand names