According to a study by the Boston Consulting Group, the market for second-hand watches and jewelry, long ignored by luxury brands, should experience strong growth in the coming years. The strategic consulting firm publishes a survey on this “new reality of luxury” which, according to it, offers numerous opportunities.
The market for second-hand watches and jewelry alone is worth approximately 22.5 billion Swiss francs per year and continues to grow in size. The global market for second-hand luxury goods, long neglected by the luxury houses, which saw it only as a channel for the grey market, can no longer be set aside.
A rapidly growing market
In a survey published at the end of September and carried out by the Boston Consulting Group on the watch and jewelry sectors, the international strategic consulting firm forecasts an average annual growth of 8% by 2025 for second-hand items. This figure is higher than for the luxury goods industry as a whole, which is expected to grow by only 2-3% over the same period, according to analyses by another international firm, Bain & Company.
The movement, already observed for some years by specialists, is only in its infancy and is part of “the new reality of luxury“, again according to BCG. Luxury brands and retailers therefore have the opportunity to “take proactive steps to shape demand and defend their interests“. The survey of 12,000 consumers from Europe, Asia, the United States, Brazil and Russia reveals that “second-hand sales do not reduce the purchase of new products, but with the right approach, they can be complementary and enhance brand value“. Indeed, second-hand sales open the doors of luxury to a new clientele.
A propitious period for the second-hand market
This trend in the secondary market has been accelerated by the economic crisis related to COVID-19. Indeed, the Boston Consulting Group notes that “financial uncertainty is leading buyers of all ages to consider used luxury as a promising investment sector“, seduced by the many qualities that used luxury possesses, losing little value and even gaining for a few flagship items. There is also a growing focus on durability, especially among a younger clientele, given that 55% of buyers are men, often born after the mid-1980s.
Less concern about product authenticity
The study also found that consumers have “clear expectations regarding safety, convenience and service in shopping“. Certification of authenticity is more in demand, and some major luxury brands have already taken some steps in this regard.
This is the case for luxury watchmaker Breitling, which announced last Tuesday that all its new watches will now benefit from a digital passport based on the blockchain to ensure their authenticity and traceability throughout their life. Similar measures had already been announced by Kering in January. Vacheron Constantin already offers this service on certain watches since June 2019, and Czapek & Cie will launch its solution, which is currently being implemented in early December. Concerns about the authenticity of the products available on the aftermarket will soon be over.
The alliance of luxury and second-hand market
For the companies concerned, this is the right time to develop solutions that will enable them to establish themselves on the second-hand luxury market. This may involve acquisitions, as was the case in 2018 for the Geneva-based luxury group Richemont and the Swiss retailer Bucherer, with the takeover of the British sales site Watchfinder and the American retailer Tourneau. This is the perfect time to nurture partnerships, joint ventures or new platforms that can better defend a brand image, as BCG
Featured photo: © imaxtree
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