Consumer reports predict that second-hand fashion will overtake fast-fashion retailers by 2030, growing 11x faster over the next five years. This trend has also been observed in the luxury sector. How is the market evolving? How can the logistics services adapt?
In this interview, Stephanie Crespin, Founder, and CEO of the start-up Reflaunt shares her vision of the second-hand luxury fashion market and supply chain & logistics implications.
What evolution do you see in luxury fashion consumers’ behaviour and in luxury brands’ interests in joining this movement?
Stephanie Crespin: Consumers are starting to be more interested in usage, rather than ownership. They crave change, but to afford it, they need to find new ways of financing. This is what allowed for the creation of resale infrastructures, such as Vestiaire Collective or ThredUp. Consequently, the second-hand fashion market is now a business opportunity of 30+ billion dollars. For brands, this can be a chance to better understand how their customers interact with their merchandise and when and to whom they resell it. Such data would allow brands to better craft their products, reach the right audience, and retain and convert second-hand buyers into first-hand buyers. In my opinion, those who are not embracing circular models today will be left on the side-line, just like some were with digitalization.
Can you explain the Resale-as-a-Service (RaaS) model and how it fits into the second-hand luxury fashion ecosystem?
Stephanie Crespin: RaaS helps brands and retailers enter the second-hand market and offer a resale service to their customers. At Reflaunt, we based our approach on one simple observation: to deliver a successful resale service, you need to be able to sell products fast. Established brands have of course existing client bases, but they are limited compared to the second-hand marketplaces, which already have significant databases of potential buyers. With our technology, brands could sell their second-hand products through their own platforms and multi-brand marketplaces. In that respect, brands take back ownership over their product, while satisfying clients.
What opportunity do you see for the supply chain stakeholders in the development of luxury second-hand retail?
Stephanie Crespin: From the production point of view, we need to develop product identification, by creating RFIDs, QR codes, and integrating digital IDs directly on the merchandise. As the second-hand luxury fashion market grows, this will help us map the product journey, and facilitate the authentication and integration into secondary digital commerce.
In the logistics sector, traditional businesses have a unique opportunity to grow by processing, managing, and digitalizing single SKU. In terms of freight and shipping, there will be more and more demand for reverse logistics partners, as brands continue to develop second-hand offers.
What are the main challenges for supply chain operations in this specific market?
Stephanie Crespin: There is a challenge of authentication with regards to the provenance of the product. But with brands coming into this area, we will have much more data about the product journey. As innovative solutions continue to develop, the resale process will become easier. Of course, logistics can be a difficult aspect of a second-hand service. In our case, our direct relationship with brands allows us to use their existing networks, so for example their stores can become drop-off points, which facilitates the process greatly.
What are some of the lessons you have learned so far from this sector?
Stephanie Crespin: It is very difficult to create a whole resale service on your own. Having an ecosystem approach can unlock much more value. We also see a difference in performance between brands that are driving real change in their business model and those that are only looking for publicity. Finally, I think second-hand is a huge opportunity for our logistics partners. This is the future, and they can get a step ahead. We believe in a collaborative approach to our business and mutual learning.