Inflation and a looming recession aside, people still want to have nice things.
For luxury resale platform the RealReal, this demand is evident through recent consumer trends. According to the platform’s 2023 Luxury Consignment Report, people are trading down to more affordable brands — even within resale — to find more value within luxury to mitigate the impacts of inflation. At the same time, more shoppers are leaning towards items in “fair” — or imperfect — condition as another way to cut costs while enjoying high-quality goods.
“A potential recession, the climate crisis, and global unrest are all reasons that, going into 2023, consumers are making shopping decisions based on value — with 66% saying they shop resale primarily to get a good deal – as well as personal values,” said Rait Sahi Levesque, co-CEO and president of the RealReal, in a statement.
As of Q3 in 2022, the RealReal has more than 30 million members and say a 29% growth in buyers compared to the previous year.
Within handbags, The RealReal found that consumers are opting for more affordable brands like Bottega Veneta, Prada, Miu Miu, Dior, Burberry and Valentino going into 2023 as opposed to “ultra-luxury classics.”
Demand for bags in fair condition — which might include scratches or signs of wear — has doubled since early 2022. The average price for an item in this category is 33% percent less on average than items in better condition, which makes purchasing more accessible for those looking to spend less.
The data from the report highlights the way consumers are adapting to macro-economic challenges to keep buying luxury. At the National Retail Federation’s Big Show this week, executives and analysts were optimistic about the luxury sector, even as signs point to a recession and the consumer feels the weight of inflation.
Macy’s, Inc. chairman and CEO Jeff Gennette, LVMH Inc. chairman and CEO Anish Melwani and Neiman Marcus Group CEO Geoffroy van Raemdonck all spoke at the event and were bullish on the future of the luxury sector in 2023.
At the same time, retailers know consumers are still looking for value, even when it comes to luxury.